A systems-based approach is required to complete capital projects. There’s a relationship between the commissioning phases and handover model at the end of projects and the outcome assurance governance structure that’s required to align a systems-based approach right from the start of projects to ensure the end can be successfully completed. Listen to this conversation to understand the relationship between commissioning at the end of projects and outcome assurance at the beginning so you can deliver successful projects as well.
Hello everyone, welcome to today’s presentation. Today we’re presenting on systems-based thinking for the built environment, the critical aspects of how to complete projects for a systems-based approach to not only complete projects, but lead that systems-based approach to completing projects right from the beginning of projects for successful delivery.
So, my name is Paul Turner. I’m the founder of the Institute of Commissioning and Assurance. My background is I’m an electrical engineer. I’ve worked in the aerospace industry, delivering satellites and rockets for the Canadian Space Agency, working on power projects, delivering hydroelectric generation facilities, HVDC transmission facilities, worked in the wastewater treatment plant industry, and currently, I’m supporting the largest power project in North America at the Institute of Commissioning and Assurance.
We’re a worldwide organization of over 4,200 members supporting projects all over the world. We have 27 local chapters, and we’ve recently published two international commissioning and outcome assurance standards. And I’ll tell you more about these two published standards a bit later in the presentation.
So, we’re here to talk about the systems-based approach to projects and why projects are failing. Projects don’t fail at the end; projects really fail at the start. And it’s that lack of systems-based thinking that causes a lot of projects to run into trouble later. We just don’t see a lot of these problems that are occurring upfront until it’s too late in the project to address any of these fundamental problems for a systems-based approach.
So, this is Professor Bent Flyvbjerg; he’s from the University of Oxford, and he’s written a book, How Big Things Get Done. You may have seen it online. He’s very active posting and publishing online, and if you haven’t had a chance to read it, it’s an excellent book because it describes a lot of the fundamental upfront problems, the mistakes that are done at the beginning of projects that lead to failure at the end.
He’s got a database of over 16,000 projects, and all the data is in there showing the poor performance of the construction industry over the last several decades and the breakdown of percentage of cost overruns by various industries and various types of projects. So, the problems are well understood. It’s not a secret that the construction industry has lagged behind and has poor performance.
But why is this? What is the cause of this? What are the mistakes that are being made that are leading to these poor outcomes? There are three very particular mistakes that, if you fix only these three mistakes, you’ll be leaps and bounds ahead on your projects to deliver successful outcomes.
So, mistake number one is that there’s no clear vision of what the successful outcome actually looks like. Everybody’s focused on their individual task, but nobody’s necessarily focused on the entire project outcome. And when the goal of the project isn’t clearly understood, then it’s pretty tough to achieve that goal when everybody’s working on their own outcomes.
It’s exactly like Stephen Covey says in his book, Seven Habits of Highly Successful People. His habit number two is to begin with the end in mind, and that is absolutely the case on projects. To have that systems-based approach, that systems-based mindset right at the beginning of projects in order to have that clear vision of what success looks like to achieve the project outcome.
Mistake number two is that there’s no systems-based thinking. Everybody’s focused on their individual task, and they’re all doing good work. We have the engineers doing design, and the construction folks are installing items, and they’re very focused on their tasks, and they’re completing their individual work assignments. But there’s no systems-based thinking and how this is all going to connect together and how a successful project is going to be integrated at the end of the project.
The classic problem you’ve heard many times before is that everybody’s working in silos. Everybody’s working on their own individual tasks, but there’s no systems-based thought process to pull this all together in the end. And when everybody’s working on their own individual task and not looking at the whole project, it’s pretty easy to get lost along the way. Everybody’s going and meandering down their own little path, but there’s no clear path of what the project needs to achieve at the end to achieve that outcome. And it can take a lot of extra time and a lot of extra work because the project has no clear path to that outcome. Instead of having a systems-based approach that makes it much easier to focus on the goal and achieve the end of the project.
Mistake number three, of course, is that nobody owns that project outcome. Everybody owns their own individual task. But there’s no clear owner on the project that owns that systems-based approach to lead projects to a successful outcome. And when this is the case, projects are just gambling. There’s no way to determine how the project will turn out at the end. It’s always a crapshoot and always a mystery how the project is going to end up because nobody owns that outcome of the project right from the beginning.
So, these are the three common mistakes that exist on projects. There’s no clear vision of a successful outcome and what that systems-based approach looks like at the end of projects. There’s no systems-based thinking to pull this all together and integrate a successful project and systems, and nobody owns the outcome. Nobody’s responsible for pulling this all together, not only at the end of the project, but right from the beginning to guide projects to a successful finish.
But if these mistakes are known, what is actually missing? What needs to take place on projects? And what can project leaders do to encourage or foster this system’s based approach that’s so fundamental to project success? How do project leaders assure that they can achieve their project outcomes?
So, let’s look at the typical phases of a project. Every project goes through each of these phases to get to the end. At the beginning, during FEED, we need to define what the project is and what we want to build and what we’re trying to achieve. Here, we need to do some detailed engineering to define the specifics of what needs to be built and how the system is to operate. We need to buy some stuff, we need to install some stuff, we need to make some stuff work. We need to get these systems started up so that we can achieve operation of the successful project.
What we need to do is achieve an intended outcome at the end of this project, right? And the outcome is not just installation of a bunch of equipment. The outcome is successful operation that meets cost and schedule objectives right from the beginning. But too often on projects, as Professor Bent Flyvbjerg’s data shows, the outcome does not align with the initial expectations that were set out at the beginning of the project.There’s a disconnect along the way of these stages of the project. The outcome meanders into a different pathway, and the outcome does not achieve the initial expectations. There is a function at the end of projects that definitely requires the systems-based thinking approach to pull this all together.
In the end, the commissioning, startup, and operation phase is that systems-based approach to pull all of this together and generate a successful project. And I would say that this commissioning process at the end of projects is not well understood generally in the industry and is the challenge that projects often fall apart at the end because there was no thought process at the beginning or systems-based approach right from the beginning and how these projects are going to be pulled together.So, the process at the end of the projects is the commissioning and startup process, and this is defined in the ICA Global Commissioning Standard issued by the Institute of Commissioning and Assurance. What complements the commissioning process at the end of the project is the upfront project process, which we call outcome assurance.
So, this is the ICA Global Outcome Assurance Standard that has recently been issued. And this is the standard that connects the end of projects to the beginning of projects to ensure a systems-based approach right from the beginning to allow projects to successfully be completed during integration, commissioning, and startup at the end of the projects.These two standards essentially connect the end of the project with the beginning of the project. That’s, of course, the goal, right, is at the end of the project, we’ve met and aligned with what was required at the beginning of the project. And these two standards bridge the beginning and the end of the project to tie everything together and to set things up for success right from the beginning.
The goal, of course, is the outcomes of projects must align with initial expectations. So, where we’ve defined the commissioning process in the ICA Global Commissioning Standard, the outcome assurance standard defines the governance and policy structure required to manage the project right from the beginning to align with a successful systems-based thinking approach at the end of projects.
So, let’s look a little bit further at both of these processes here, the commissioning phases and handover model and the outcome assurance model. As I mentioned, the commissioning phases and handover model, these last three functions of a project, are defined in the ICA Global Commissioning Standard. This is a figure directly out of the standard, and this defines the systems-based approach to complete capital projects.
The commissioning phases and handover model starts right at the beginning of projects and spans all phases to enable that systems-based approach and that systems-based mindset for a successful completion of projects. So, in early planning stages, defining our systems strategy and completion strategy through procurement, through all of our construction phases to transition from area-based installation to systems-based completion.
The most complex part of projects is this transition from construction to commissioning. And this is defined in the ICA Global Commissioning Standard to encourage the systems-based approach for successful completion of projects. So, then through all the phases of commissioning for pre-commissioning, commissioning, and startup in how to achieve a successful startup to achieve your project outcome.
This definitely requires a systems-based approach. And this is defined in the standard in what this staged systems-based approach looks like to successfully complete projects. Now, I would say this isn’t well understood on projects, and this is why a lot of projects struggle to complete in the end is because they’re lacking this systems-based approach to complete capital projects.
But our standard defines this very clearly when applied to projects in the systems-based approach to complete capital projects. So, now if we look at the beginning of projects and outcome assurance, this is the governance structure that’s required to be established at the beginning of your projects so that the end of your project is successful.
And this is often missing. Commissioning is often an afterthought and why it’s a scramble at the end of projects. But with the right outcome assurance and governance structure set up at the beginning that encourages and fosters a systems-based approach to allow a successful completion at the end.
What outcome assurance does is essentially enable the end of your project to be successful. And outcome assurance is critically important because all of the decisions that determine the successful end of your project are made right at the beginning of your project. And you need an outcome authority at the beginning of your project to guide all groups working on projects towards that successful outcome.
So, let’s look at outcome assurance in a little bit more detail. Outcome assurance is made up of five pillars that enable your project to be successful. The first pillar is your vision and strategy. It’s like that for everything, and projects are no different. You need to understand the clear goal of what you’re trying to achieve on the project, and too often on projects, the goal is seen by some groups as building it and installing the equipment.
But that’s only one part of the project, right? When you set the vision and strategy as the true outcome to achieve successful operations and reliable systems that can be used for decades of operation, that’s the true outcome that’s trying to be achieved on projects. And that’s the vision and strategy that must be set at the beginning of projects.
And that’s the role of the outcome authority to lead that vision right from the beginning and ensure all groups are working towards that same common goal. So, vision and strategy is the first pillar of outcome assurance.
The second is information outcome. Projects generate a ton of useful information through all different stages, and we need to ensure that this information is all connected through all stages of the project to deliver a solid information outcome at the end of the projects that can be used to operate and maintain facilities for decades.
Making decisions on projects is critical to have the most accurate and up-to-date information, and we need to set the information outcome and knowledge outcome at the beginning of projects to ensure that everything is connected, everything is in real time, and we generate a strong information package at the end of the project demonstrating compliance at each stage of the project.
The next pillar is the installation outcome. Now, when you think of installation, it would seem straightforward, right, is to install equipment as they’re on drawings. But an installation outcome needs to align with the intended outcome of the project, which is not just installed systems, but systems that are ready for testing. And focusing on this installation outcome at the beginning of your projects is what’s required to align construction with commissioning and the outcome of the project. If that’s missed, which is often the case, equipment is installed, but it doesn’t necessarily align with what’s required to achieve the project outcome.
And the project can become quite a mess trying to sort this out because there was no outcome assurance at the beginning of projects to align with your intended outcome. The next pillar is integration outcome. And this is important as well because we’re not just installing equipment, we’re integrating systems that can be used for decades of reliable operation.
And focusing on integration outcome during your outcome assurance processes right at the beginning of projects, is key to delivering successful projects. Without a focus or without an objective at the beginning of projects to focus on your integration of all these systems coming together, then it’s always a mad scramble at the end of projects to try and pick up the pieces and fill in the gaps and try and get these systems to work together because there was no upfront outcome assurance to allow that to take place smoothly.
And then the last fifth pillar here is the operation outcome. There’s an entire operational readiness strategy that needs to take place here that needs to be planned for early in projects to make sure that systems are being delivered that can be operated and that people are prepared and ready to operate as well.
And with an upfront focus on operation outcome during your outcome assurance processes at the beginning of projects, this is what assures that takes place. So, these are the five key pillars of outcome assurance that your outcome authority at the beginning of projects must focus on during all stages of projects to ensure successful alignment and successful completion of projects.
So, let’s look at a case study. Some of you have maybe heard of this case study before if you’ve joined one of my presentations in the past, but it was very interesting. I was working on HVDC projects in Canada, and there was another project on the East Coast that was taking place at the same time.
I was the commissioning manager of our project here in Manitoba, and the project went relatively well. I was involved in the project right at the beginning with a systems-based approach to complete projects in the end. So, I was working, helping to define contracts, working with the design groups, working with the construction groups to assure a systems-based approach through all phases of projects, and the project went really well.
We were able to deliver that project on time and on budget, and it’s been in successful operation every day since. At the same time, there was a project on the East Coast of Canada, a very similar project, an HVDC project as well. They were missing some of the systems-based thinking approaches on projects, and this project didn’t end in a similar manner.
In fact, it was years late and millions or billions of dollars over budget because it actually resulted in a public inquiry to find out what went so wrong. You can read the public report; it’s at muskratfalls.ca. When you read that report, it shows that a systems-based approach was missing on the project, which is why it was so difficult to complete the project in the end.
So, it was very interesting to see these two projects taking place at the same time: one was with a systems-based approach, the other one that was clearly missing that systems-based approach, and the difference in the two outcomes between these two projects. These projects are complex, and there’s definitely a lot of pieces of the puzzle that need to come together here in the end.
And you need an outcome assurance process at the beginning of projects to ensure that you can deliver a successful finish. Without that, then these pieces will just be scattered to the wind at the end of projects. There definitely needs to be that upfront outcome assurance systems-based thinking process to ensure that projects can be completed, and your outcome assurance authority is your conductor and your grand master to orchestrate all aspects of the projects and all systems to ensure a successful finish at the end.
So, both functions are critically important: the systems-based thinking approach required and defined in the ICA Global Commissioning Standard, and an outcome assurance framework right at the beginning of your project to define a systems-based approach right from the start.
These two standards that we’ve issued complement each other, and they ensure a successful systems-based approach through all aspects of the project. And you need to be applying these two standards to your projects if you want to achieve a successful outcome, which I assume is the case for most projects.
The conductor of your project is really the owner and the orchestrator to manage all groups that are working on projects and enforce that systems-based thinking to not only coordinate but also own the outcome and ensure a successful finish of projects.
So, what’s next? How do we make this simple? How do we make these two standards applicable, and how do we move away from the theory and how do we put this into practice to make it easy for project groups to succeed in delivering their projects? So, at the Institute of Commissioning and Assurance, this is exactly what we’ve done by releasing these two sets of standards. The first, the ICA Global Commissioning Standard, this is publicly available to anyone who wants to apply the systems-based thinking approaches on their projects for a successful finish. The standards ICA 001 to 009, this defines the ICA Global Commissioning Standard and the steps to be taken to ensure a systems-based thinking approach on all projects.
We’ve recently issued the Outcome Assurance Standard ICA 010, and this is the governance and policy structure that needs to be set up right at the beginning of projects to ensure a systems-based thinking approach and a successful completion at the end. And all of these standards are publicly available.
You can log into the ICXA members’ area, get your copy of the standard, and start applying this on projects right away. While the Global Commissioning Standard really provides the structure and the methodology for delivering the commissioning and operational readiness aspects of projects, what the Outcome Assurance Standard does is it establishes the governance conditions that enable those activities to succeed, and without outcome assurance at the beginning of your project, then your later processes for commissioning and startup won’t go well, and you’ll run into lots of problems later.
So, definitely go to www.icxa.net. Right at the top, you can click Become a Member, and you can get access to all of those standards and start applying them to your projects right away. We also offer the ICXA career development and certification framework.
So, this is the career development pathway to develop the current and future leaders to lead the systems-based thinking approach on projects and guide projects to a successful finish. So, there are four different levels. Individuals can go through the program and earn each of these levels as their career progresses, starting at the CXP.
This is your Certified Commissioning Practitioner. These are individuals who are doing the commissioning and are ready to move up and start leading and managing commissioning and managing the systems-based thinking approach to complete capital projects.
The second level, then, is CXL. This is your Commissioning Lead. These are the individuals, the people who are responsible for leading teams, planning the work, planning schedules, and making that transition from area-based construction to systems-based completion.
Moving to the third level, this is your CXPM. These are your commissioning managers, your project managers, your certified commissioning project managers that can start right at the beginning of projects and lead a successful outcome and lead an integrated systems-based approach through all phases of projects.
And then the final, the highest level here is your CXOA. These are your seasoned professionals with decades of experience. These are the individuals who then become the outcome authorities. These are the individuals right at the beginning of projects during FEED that are setting the direction and setting the strategy for successful project completions. These are your outcome authorities that guide all aspects of projects to a successful finish.
So, this is the career development pathway that the Institute of Commissioning and Assurance offers, and you can go to our website and check out the various certification levels that exist there. So, I definitely encourage you to join the ICXA systems thinking movement. This is fundamental to transforming the construction industry and leading to only outcome rather than just the tasks.
This is the methodology that we’ve defined in these two standards for how to improve the construction industry and how to deliver projects successfully with a systems-based approach, and this approach is fundamental to project success. If projects choose not to do this, as a lot of projects currently do, they will continue to fail. But the leaders in the industry, the project management groups, the construction groups, the commissioning groups that are the ones that are successful, this is what they’re doing. This is the systems-based approach that they’re following to achieve project success.
So, I definitely encourage you to contact us at the Institute of Commissioning and Assurance and see how we can help your projects, how we can help your project group succeed. You can go to the website at icxa.net. You can email us at info@icxa.net. We can give you any information that you’re missing. Or if you prefer to reach out to me directly, you can find me on LinkedIn. If you go to icxa.net/linkedin, that’ll take you to my personal LinkedIn page, and feel free to connect and reach out to me there. I’d be happy to answer any questions that you have, get you in touch with some of our board members, send you the standard documents, whatever you need to help make this transition and transform the construction industry.
So, that’s the end of the presentation.
Q&A Session
Question: How about outcome assurance implemented at the end of each phase of the seven phases?
Answer: Implemented at the end of each of the seven phases is a good way to think about it. It really needs to be implemented from end to end at the beginning, middle, and end of each of the seven phases. Outcome assurance is that mindset that’s required to pull all of the seven stages together and ensure a successful project completion. So, it’s not like you can pick and choose and say you want to have a systems-based approach here but not there. It spans the entire duration of projects and is required at all points in the project for projects to be successful. So, yeah, I agree it’s implemented at the end of each phase, but it’s also implemented in the middle, at the beginning, at every point in the project to assure alignment of all the groups working on projects for a successful finish.
Comment: Yeah, he’s saying that it must be at every stage of the project life cycle. So every thought process needs to be ingrained with the systems-based thinking approach. So yeah, Peter is absolutely right as well. And Peter is one of our board members on the Institute of Commissioning and Assurance. Peter is responsible for government policy and alignment. I definitely encourage you to reach out to Peter, have a discussion with him, and he’ll help you understand some of the things that we’re working on at the Institute of Commissioning and Assurance to transform the construction industry.
Question: What do you see as the most direct path forward in getting the five outcome assurance pillars integrated into projects?
Answer: That is the fundamental question here. So, in my mind, I think there are two approaches: voluntarily, projects don’t seem to want to implement these types of processes. So, there’s a fork in the road and two paths that we need to pursue here in parallel: either to create an environment to incentivize people to want to pursue outcome assurance and project success. A similar model to like, LEED did for the sustainability of projects. That could be incentives, that could be recognition, some sort of framework to incentivize project leaders to want to do this.
It’s in their best outcome to do it, but they need to be encouraged or incentivized to do it in some way. And that could be one path that we follow here. The second path is possibly to mandate it. And that’s something that Peter and I are working on, is reaching out to government agencies, reaching out to policymakers. If groups aren’t going to willingly impose or have outcome assurance on their projects, and if an incentivized environment doesn’t look like a reasonable approach, then what do we need to do to mandate this to actually help projects understand this is in their best interest to succeed? So, I’d be interested to hear your thoughts, Darren, on what you think on a mandated approach versus an incentivized approach to enforce these standards.
Comment: We need to sustain the vision by meticulously tracking the objectives end to end.
Answer: Yep, absolutely. That’s that vision and strategy to focus on the actual outcome of the project rather than just the individual tasks. And it’s, it’s not necessarily an easy thing to do, right? Projects spend many years, and there’s lots of people involved. But it does take that strong leader at the beginning of projects, that strong outcome authority that understands a systems-based thinking approach to guide projects to success. Then, with that strong leader that’s going to lead and guide all of the groups to ensure that that systems-based thinking approach is instilled in project execution.
Question: What is the focus of outcome assurance? From FEED till operation or each stage? FEED to stage the operation has the outcome assurance.
Answer: Outcome assurance isn’t by phase. Outcome assurance is the global governing umbrella of all aspects of the project. Outcome assurance starts right at the beginning, before any financial investment decisions are made and is that outcome authority leadership that leads all phases of projects to that successful outcome. Definitely encourage you to get a copy of the Outcome Assurance Standard and have a read through it. It is a fantastic and excellent document.
And when you read it, you’ll probably, I won’t say blow your mind, actually it might. It’s the missing piece of project. It’s the leadership that is missing to ensure that a systems-based thinking approach on projects. And I wouldn’t say it’s discrete or specific to any of the project phases. It is the global governing umbrella to ensure all phases of projects come together. Everybody’s aligned, everything is integrated, and we can successfully complete projects. So, the outcome assurance standard goes through all of the process of how outcome assurance works. It defines the career pathway of where these current and future leaders are going to come from to step into these outcome authority roles and lead projects successfully. It is the missing piece of project. So, I definitely encourage you to get a copy and check it out.
Question: At which percentage of construction is the systems-based approach to be followed?
Answer: Very good question. Yep. So, typically at about 60 or 70% of construction is where the transition needs to take place from area-based construction to systems-based completion. The ICA Global Commissioning Standard defines this transition and when it needs to take place and what it looks like. So, definitely get a copy of that standard, and that will walk you through all the specific details of exactly how this transition to a systems-based approach must be followed and the key critical aspect. Is that transition doesn’t necessarily only take place at 60 or 70% construction. That transition is defined in contracts before they’re even signed. So, when contracts are awarded to EPC groups, what this systems-based approach looks like and how this transition must take place is fully defined upfront so there’s no surprises. This helps construction groups immensely because they know exactly what they need to plan for, they know exactly how to sequence their work and how to make these transitions, and they know exactly the sequence of how to hand over these systems for alignment with commissioning. Now, I would say when we look in most contracts, it’s pretty light on details, and I rarely see this written into contracts properly to define what this transition to systems-based completions looks like. And it’s the reason that things rarely work at the end of construction because it was never defined upfront. If you’re only having those discussions and trying to define with construction groups after the contract is awarded, well, as you know, if it’s not in the contract, it’s not going to happen, right? And it results in disputes and claims and delays because it was not properly planned for upfront in contracts. So, this systems-based approach is paramount and fundamental to define upfront because it must be in construction contracts before they’re even awarded. If there’s any ability for contractor or construction groups to plan their work to align with this system-based thinking approach.
Question: Is there a textbook to read more about commissioning?
Answer: Maybe, maybe not, but your best approach is to get the two standards, get the ICA Global Commissioning Standard, get the Outcome Assurance Standard; everything you need to understand this commissioning process and how to make this systems-based application mindset to your projects is defined in those two standards. That’s your best source of information. If you get those two standards, you’ll have everything that you need there, and you’ll be setting yourself up for success if you’d like to move through the career pathway development program there to move up into these more leadership roles of commissioning and eventually become an outcome authority on your projects.
Comment: Hey Brad, good to see you. This is the problem. It should be right from the beginning, as the goal is the turnover as systems.
Answer: You’re absolutely right, Brad. And what’s the biggest problem on projects is that people are working in silos, and there’s no alignment. Well, how do you fix that is you determine that alignment and integration right at the beginning of projects. Even if you ignore the complexity of testing detailed complex systems, you, of course, need alignment by all project groups at the beginning of projects. If we were doing anything else, if it even wasn’t of a project, if we were baking a cake or coaching a soccer team, you need alignment by everybody working on the team. The only way to do that is to define that at the beginning, to define your systems-based thinking approach and define alignment of all project groups to ensure they’re aligned on achieving this project outcome. It’s fundamental to project leadership and is why this outcome authority role is so fundamental because it’s the leadership role that guides projects and leads projects to success, keeps everyone aligned, and keeps the project headed towards the actual intended outcome.
Comment: So, Peter’s got another good point here. It originates pre-FEED and aligns everyone throughout each stage of the project and operational life cycle.
Answer: Yeah. So, even if you know nothing about commissioning and are not interested at all in any of the testing details, the concept of project leadership is fundamental and paramount. And I would hope well understood is you need a strong leader at the beginning of projects to lead to the outcome, to keep all groups aligned and working to the same project objectives and goals. And that outcome isn’t well understood. The outcome is often misunderstood as construction, right? It’s called the construction industry. And everybody would have in their mindset that we need to build some things, and we’re done. But that’s not the outcome or that’s not the objective of projects. Having a pump bolted to the floor is great, but that pump is useless if it doesn’t actually do something. The objective and outcome on projects is to achieve operational excellence and highly reliable systems that can be used for many years of operation. And the definition, the standards that we’ve outlined here are the bridge to define the end of project objectives and the beginning of project initiatives to make sure those are aligned and that we can align outcomes to objectives with strong project leadership to achieve project outcomes.
Comment: You are right, but it is highly challenging to make construction to think on system approach. KPI is different from commissioning. It’s really a challenging part of the project, in particular, transition from priority-based systems.
Answer: I agree completely. And to be fair to the construction groups, they will do their installation and construction by discipline and by area, right? And that makes sense for optimizing their work. If they have welders, they’re going to have the welder come through and do all of their welding activities by area and complete activities in there, and that’s fine. They need to be allowed to plan their work that way, and they need to optimize their procurement deliveries, their workforces, and all of the means and methods that they have to complete that work. At some point though, when they’re getting closer to the end of that, then at that 60 or 70% transition, the work does need to transition into systems-based completion. And the only way construction groups know how to do that is if it’s defined upfront in contracts. You cannot give that to a construction group after the contract is already awarded. You will never get them on board with that because these are large workforces. These are long-lead procurement material items being delivered to site, and these plans just don’t move on a dime. It does take planning and foresight to plan some of these construction activities, and you need to be giving this information upfront in contracts to construction groups if you want them to be able to successfully plan for a systems-based completion. The challenge is when that’s not in contracts, and you try and have that discussion after the fact, well, it’s too late. Construction plans have already been made, and workforces have already been aligned, and plans are already in place to complete the work. And trying to move that big moving machine of construction after the fact, it’s just not going to happen, and you’re not going to get construction groups on board with that. It needs to be defined upfront in contracts. It’s only fair to be giving construction groups all of the upfront information for a systems-based completion so they can plan work around that. So, I agree it’s challenging. It’s often the case because it wasn’t defined upfront in contracts. If it’s not in the contract, you’re not going to get them on board with it, and it needs to be defined by the outcome authority at the beginning of projects in how contracts are going to be planned and strategized for a systems-based completion.
Comment: Great answer. You’re too fast to integrate seem right. The key from my experience seems to be getting this in front of the developer as they hold the money and will drive the outcome. Mandating might be the most efficient way to driving this.
Answer: You’re absolutely right. Follow the money, and you’ll follow the decisions, right? It’s a money decision, and we perfectly understand that, and that is the right decision, right? Not here to waste money or achieve bogus outcomes. We need to make this efficient from a time and a cost perspective. And that’s the key point is when you follow the money and you have these discussions with efficient completions and systems-based thinking, this is what saves money on projects. It’s still going to be challenging for sure. And there’s going to be some differences between a developer environment or, say, a government-funded project environment. We need to think about those different aspects and see what’s the right way from an incentive standpoint or from a mandate standpoint to enable developers or enable government-funded projects to enforce these outcomes on projects so that they can achieve better results. Lots of work to do for sure, but the pathway is clear on what we need to do to achieve that.
Comment: Not sure mandating via government or regulators is the right way to go. Need to get the project owners and investors to drive it. Have to show them the money. Unfortunately, commissioning resources are challenged at showing how money is saved or made by following this process. Have tried this ISP and at CI. This approach impacts most EPC models because it reduces man-hours and changes change orders which can occur revenue. Bottom line, this begins with contract. That is the nut we need to crack.
Answer: I agree for sure. Yeah, and that’s the debate: is mandating something might be a little bit challenging. LEED has been very successful in creating that incentives environment, right? When there’s the right incentives put in place, and that could be a government mandate, right? With government incentives, tax breaks, things like that. When people are incentivized to want to do this, then they’re going to be a more willing partner to want to apply outcome assurance on their projects. Mandating somebody to do it, then it’s a little bit of begrudgingly kicking and screaming going along because they’re forced to, not because they want to. So, I definitely understand your point, David, and that’s the balance we need to strike as we’re having, as Peter is having some of these discussions with government groups and policymakers is what’s the right environment to create here to either mandate or incentivize people to want to do this. But your point is completely valid. I agree.
Comment: Extraordinary presentation, Paul, especially the emphasis on beginning with an end-in-mind mindset with an integrated view that only systems thinking can provide and that will be translated into operational readiness for the success of the asset to be brought alive. Thank you again for the great presentation.
Answer: Yep, appreciate your feedback, David. This, I agree, is this is the only model in how projects are successful, right? It’s just, it’s fundamental leadership, right? We need to have all people working on projects aligned and working towards the same outcome. And it’s not like there’s a secondary competing model that you could do it another way, and it will be successful. This is the way. This is how projects are successful. It stems from strong leadership right from the beginning and an outcome authority right at the beginning that can drive that systems-based approach. So, lots of work to do for sure here to show people the way and show people how projects are successful. But we’ve got a great team that’s working hard to make the contacts, reach out to the groups, and make sure that this mindset is instilled on projects because this is what the construction industry so badly needs in a transformation to improve projects, project outcomes, and everything is right here to be able to do that. We just need to spread the word, share the message, and anything people can do to spread the word and get us in contact with the right people is certainly encouraged.
Question: It is interesting for certification commissioning personnel. Is this based on disciplines? Because the completion system is not part of any traditional discipline. Can you give the details?
Answer: So, it will certainly start with discipline. But what this is, is not so much by discipline. This is a leadership function, right? When you start out, maybe in the commissioning world, you’re focused on discipline, but this is leadership through the different levels that I went through there, the four different levels. These are people who are rising up through the leadership ranks to essentially become that global outcome authority, that industry expert that not only has expertise on the technical aspects and the disciplines but also the leadership aspects to lead large, complex teams. The contract disciplines, the commercial aspects, the project management aspects. These are very well-rounded individuals with lots of experience, demonstrated experience on projects to move up through the different ranks of certification to achieve the greatest of all time level at the top to become an outcome assurance authority, therefore, certified to be able to start right at the beginning of projects and lead projects, be that umbrella governance organization to lead projects to success. So, I wouldn’t think of this so much based on discipline. This is a leadership function that’s based on a systems-based thinking approach to lead projects to success.
Comment (Attendee): Quite correct, leadership must come from the project owner. My experience shows that when the mandate approach approved by the corporate project leadership as a system, no project, irrespective of urgency and size, allowed to progress unless examined and passed the assurance requirements at each project phase.
Answer: Absolutely. Yeah. This is the only way that projects are successful is when this approach is applied, and projects that do succeed, this is what they’re doing. This is the systems-based approach that they’re taking. The problem is that nine out of ten projects are late and over budget, and it’s because nine out of ten projects are not taking the systems-based approach right from the beginning. The ten percent of projects, that one out of ten that are succeeding, this is what they’re doing. This is proven methodology. This isn’t some pie-in-the-sky idea that we’ve come up with that’s going to somehow be miraculous. This is proven. This is what projects do to succeed. We’ve just given it a name, and we’ve defined it in a standard to help others understand what a successful project looks like and what systems-based thinking is required to deliver successful projects. So, yep, good comment.
Question: Now, there is a tendency to consolidate or fuse the construction team with the commissioning team or to fuse the quality team with the commissioning team. What do you think about that? Is there any risk or disadvantages, or pros?
Answer: No, that’s not the approach at all. I know that’s common because commissioning is an afterthought or not thought of at all. But that’s not how projects succeed because it is a very different mindset required for a systems-based approach. And like we talked about, the construction folks don’t start their work like that. They will start their work from a task-based approach and an area-based approach, and they need to be able to do that, right? But the mindset does need to shift into a systems-based thinking approach, and that is a different group. It’s just the way it is. It’s just a different group that has that systems-based thinking approach to complete projects. So, if you try and tuck that under an existing group, it doesn’t work because it’s a different mentality and it’s a different leadership function. And what we’re talking about here, being the outcome assurance authority, the outcome assurance authority isn’t part of a group. It’s not like it’s tucked under project management or tucked under construction. The outcome authority is the global project leader who’s leading project management, that is leading construction, that is leading commissioning, and leading design. The outcome authority is responsible for the outcome, and the only way that occurs is when that outcome authority is responsible for all aspects of the project. They essentially own the outcome, and all of these groups take their direction from that outcome authority to lead to the project outcome at the end. The outcome authority spans all aspects of the project from zero-day start, a blank sheet of paper, right through to the end and handover to operations; the outcome authority owns it all and ensures all groups are aligned and working towards a successful completion.
Comment: Well summarized. And this can be achieved with authentic leadership and the right experience and skill set workforce across the client and EPC contracts, absolutely.
Answer: And that’s the key. Some people might look at these standards and say, oh yeah, this is great, but where are we going to get these expert individuals to be able to fulfill these roles? And that’s why at the Institute of Commissioning and Assurance, we’ve developed that career pathway and certification levels to develop the current and future leaders that are going to step into these roles and lead projects to success. These are the leaders that are going to deliver successful projects through the career development pathway. So, the ambitious individuals that are ready to rise up from the technical aspects and move into these leadership roles, that is the career development pathway that we’ve outlined here for those ambitious individuals that really want to step up and own their project and own the project outcome and ensure that projects are successful.
That is the only way; it’s either got to be mandated or incentivized because it’s available now, and people can, on their own intuition or own initiative, enact some of these things, but they’re not; nine out of ten projects are still failing. Project leaders still view an outcome-focused approach as something silly. It makes no sense. Everything we’ve talked about today is common sense, right? You need a leader, you need to align all your groups on projects. You need to work towards an outcome. But project leaders aren’t doing that on their own. We’re not sure what they’re doing, but it’s chaos, and it’s not delivering successful projects. So, we need something further to get project leaders to do this, either incentivized or mandated. Peter’s working on some good things to see what’s the best approach, talking to government leaders and policymakers to determine what is the environment that we need to create here to make this transformation because people just aren’t willingly doing it on their own. They need something more. They need a nudge; they need a push to get on this because it’s only about time.
Question: Is it possible to share a document, each one of your presentations?
Answer: Yeah, if you want a copy of the slides, no problem. Yeah, we can send you a copy of the slides. Just shoot us an email at info@icxa.net, and we can get you a copy of the slides. If you want access to the standards, we can help you out. Reach out to me on LinkedIn. If you want icxa.net/linkedin, that’ll take you to my LinkedIn page. We can reach out there, and I can get you anything that you need. Any information that you’re looking for, we’ll help you get the information that you need to help transform your projects. So, yeah, definitely reach out, and we’ll be in touch.
Comment: Yes, human predictability. And that’s really the fundamental issue here, right, is that projects can be successful, but the complex piece is the human element, right?
Answer: It’s clear what we need to do here. But people and the way the industry is, is just so ingrained, and it’s been just done that way for so long. So, even new people into the industry, they’re indoctrinated into this old outdated way that does not deliver projects. And we need to break that mentality. We need to transform that and push that human element in a different direction and help the human element understand this systems-based thinking approach that’s required to project. And that’s why we’ve developed this career development pathway to help with exactly that is to install these systems-based thinkers on projects that can help us lead and guide projects to success.
Comment: A way to link area and discipline-based construction with systems-based CSU is to define a proper work breakdown structure of the project at the early stages. If WBS is structured closely to systematization, then it is not so difficult.
Answer: That is, I would say that’s largely true, except that WBS is a project management function, and we’re really trying to get away from that. The project management function at the beginning would be WBS, the construction function at the middle would be AWP. And neither of those are taught or based on a systems-based thinking approach. WBS is based on a work package breakdown, so that would be how it’s going to be designed. What’s the design work packages that need to be delivered? OK, great. But that doesn’t necessarily align with a systems-based completion approach. AWP talks about advanced work packaging, and that’s work packaging for installation of construction by area or by task. Now, there are some sub-bullets, some points of SWP system work packages that are outlined in AWP, but I haven’t seen anywhere where they’re widely used or widely understood. So, what’s really needed is that outcome authority right at the beginning to have a systems-based approach that then aligns project management, WBS, and the construction AWP with a systems-based approach. So, project management groups, engineering groups, construction groups, they still need to be allowed to do what they need to do to optimize their work. But however they do that, it does need to come together and align with a systems-based approach. And that’s the outcome authority’s responsibility is to define that upfront in projects, define that in contracts so that those groups know how to manage and transition their existing work strategies into a systems-based approach. Not to force everybody to do something they don’t want to do, but give that clear pathway to achieve that outcome so that the existing processes that are out there for WBS and AWP can then transition into a systems-based approach so that it’s not disruptive, it’s a natural process, and helps everybody achieve the outcomes on projects.
Awesome. We’re basically at our time limit here. So, lots of great questions. I do appreciate everybody coming out and watching this presentation. Help spread the word. So, get people in touch with the standards for outcome assurance. Definitely reach out, check out our website, icxa.net. Get in touch with us info@icxa.net or reach out to me on LinkedIn. Go to icxa.net/linkedin. And I’m looking forward to reaching out and contacting and have further discussions with you on anyone that’s interested in making this transformation happen because it’s so fundamentally badly needed on projects. So, thanks for joining and have a great day, everyone.
To become a member of the Institute of Commissioning and Assurance, visit icxa.net. Members get access to commissioning standards, procurement specifications, commissioning, training and certification, plus many more specialized resources to help you with commissioning of your industrial plant, process, and energy systems. Visit icxa.net for more information.
Recent Comments