The Death of Projects: Corporate Culture and “Tunnel Vision” by Kay Sever

By Kay Sever, Mining Improvement Specialist and Change Leader, CMC

Kay Sever
Kay Sever

Companies use projects to solve problems, reduce costs, replace outdated facilities and equipment, expand production capacity and grow strategically. Projects come from an idea or recognition that something needs to change to make more money, work safer, meet regulatory requirements or respond to growing market demand. Examples of projects found in mine/plant operations include:

  1. Shift-to-Shift communications ($600,000 value)
  2. Warehouse process for maintenance ($300,000 value)
  3. Permitting delays ($350,000 value)
  4. Maintenance PM process – haul trucks ($500,000 value)
  5. Spillage in the plant ($1,000,000 value)

 

Projects like these run parallel to normal day to day operations, but are dramatically different in nature:
  1. Project work streams are finite (i.e., have a start and end date)… operations are ongoing.
  2. Projects require a unique subset of data/information that establishes a baseline, quantifies the size of the opportunity, justifies the investment and measures the impact after completion.
  3. Projects require knowledgeable resources that often involve multiple departments.
  4. Project team members come from multiple organizational levels… managers, superintendents, supervisors, operators/technicians/analysts, etc.

 

This list of project characteristics contains objective and subjective project elements.
  1. Items 1 and 2 involve numbers… objective information, activities and management decision criteria linked to equipment/process performance and financial results. Examples include timelines, completion dates, baselines, trends, ROIs, etc. Money is spent on projects to achieve a numerical result, so it is natural for management to focus on the numbers and depend on the numbers to measure their success.
  2. Items 3 and 4 involve people… subjective factors linked to the corporate culture (how people think and work together). People must have an attitude of cooperation and collaboration BEFORE they are named to a project team. The culture (not the equipment) is often the invisible source of slow progress, most project delays and most of the cost overruns. It is also causes some projects to lose priority and eventually be moved to a back page of the project report titled “Projects On Hold”, “Suspended/Postponed”, etc.

Here’s a case study about projects that “died” or never delivered the value because the corporate culture prevented their successful completion:

At XYZ Company, project teams were frequently formed and regular team meetings were held. Data was collected and analyzed to confirm the impact of each problem. Several of these projects were valued from $1,000,000-$10,000,000. Most of the high-dollar projects required the cooperation of other departments to bring the savings/profit dollars to the bottom line.

Management’s incentive plan and communication strategies helped create “silos” within a culture that hindered project success. Without a culture of cooperation and collaboration, projects came in over budget, had extended completion timelines, or were never completed.

There was no effort to change the culture because the silos were accepted as “normal”. The site’s managers found silos at every company they had worked at previously. They did not know how to remove them and felt no urgency to do so because they did not understand how silos negative impact ROI and financial results. These managers also believed that slow progress and rework were “expected” as part of project work, so they accepted slow progress as normal.

As a result of management beliefs and actions, the CULTURE CONNECTION TO PROJECTS reared its ugly head:
  1. Project commitments were made by departments that were not kept.
  2. High priority project meetings became low priority as time passed.
  3. People were not going to start working together because they sat on a project team.
  4. Completion dates for high-value projects “slipped” by several months.
  5. Sustainability project steps were never addressed.
  6. Some large projects were marked “inactive” and work on them stopped.

After millions were lost year after year, corporate executives decided to fix the problem by replacing the GM and superintendents. New people coming in were expected to manage projects differently, but did not understand the relationship between project failures and the site’s culture. Their biggest problem was the culture, not project management.

Important questions to ask:
  1. Have you ever considered that your corporate culture could be impacting the success of your projects, especially those high-dollar projects for construction or expansions?
  2. Have you even considered that your culture was one of the reasons that you add a 20% contingency to every project?
  3. What if you could cut your contingency in half by changing your culture?

Thought for the month: When more than one department is involved in anything, culture plays a role in its success and sustainability. When culture is ignored, unmeasured/unreported losses occur, (including project losses) that can run into the millions of dollars.
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Kay Sever is an industry leader in performance optimization, culture transformation and change acceleration. She helps companies experience “break-through change” by removing the organizational barriers that prevent greater profits and collaboration in day to day activities, problem solving and project management, as well as post-merger culture transformation. Kay created the world’s first management training and tactics program about the impact of perspectives on profit, culture and change. Management teams gain a new awareness about their power to shape the culture they desire, remove the invisible barriers that hold them back, and create a culture capable of maximizing profit without compromising safety or regulatory compliance. See MiningOpportunity.com for details on her contact information.

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Kay Sever
Kay Sever Author
P.O. Box 337 Gilbert, AZ USA 85299-0337

Kay has worked side by side with corporate and production sites in a management/leadership/consulting role for 35+ years. She helps management teams improve performance, profit, culture and change, but does it in a way that connects people and the corporate culture to their hidden potential. Kay helps companies move “beyond improvement” to a state of “sustained optimization”. With her guidance and the MiningOpportunity system, management teams can measure the losses caused by weaknesses in their current culture, shift to a Loss Reduction Culture to reduce the losses, and “manage” the gains from the new culture as a second income stream.