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Owner’s Readiness Index

FEATURED PAPER

By Bob Prieto

Fluor Corporation

Princeton, New Jersey, USA
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Major projects today often succeed or fail based on the readiness of the owner’s organization to undertake those projects. In engaging with owners over the course of multiple large projects it becomes clear that there are certain elements of readiness which must be in place in order to promote project success. In this paper I will briefly touch upon some of these elements and suggest that a formal evaluation and scoring by owners may prove to be a useful tool to assess their progress in moving toward project execution.

The considerations described in this paper are to some degree separate and distinct from an assessment of the readiness of the project itself. This project development readiness assessment should be similarly conducted utilizing tools such as the Construction Industry Institute’s Project Development Readiness Index or PDRI. The Owner’s Readiness Index (ORI) described in this paper is designed to more specifically look at issues within the owner’s organization, its processes and level of shared understanding.

The Owner Readiness Index described in this paper is structured to consider major questions in the following areas:

  • Owner readiness with respect to an individual program and associated decision frameworks and processes
  • Program objectives and criteria
  • Program planning and execution approach 

We will look at each of these aspects in turn and conclude with a suggested instrument for use in assessing an owner’s readiness to undertake a major project.

Owner readiness with respect to program and associated frameworks 

The number one source of program underperformance, particularly at the earliest stages is the owner’s failure to articulate and clearly communicate the so called strategic business objectives of the program. There are several dimensions to this shortcoming including:

  • Poorly defined or articulated vision, mission and top level objectives and, importantly, associated metrics of the owner’s organization.  As fundamental as it may seem, the assumption that “everyone knows”, is just that, an assumption. 
  • Strategic Business Objectives of the program must be clearly spelled out and importantly mapped to the owner’s top level objectives. This mapping is important since it establishes a program’s relevancy and importance in the owner’s organization. Sometimes these SBOs may be referred to as program or project business objectives. Experience has shown that even clearly articulating these SBOs is not enough; they must also be continuously communicated. 
  • SBO Key Performance Indicators (KPIs) must be established and linked clearly and tightly to the owner’s top level objectives. This notion of cascading objectives is essential to program success and owner organizations which have not clearly thought this through run the risk of competing, or even worse, contradictory objectives. 

If clearly defined strategic business objectives and clear and continuous communication are the first element of owner’s readiness, then a well thought out, supported and tracked strategy is second. The owner’s strategy for program implementation must demonstrate strong linkage to SBOs and be directly focused on their achievement.

Strategy must be supported by transparent and substantiated top level business assumptions. In organizations which are not sufficiently ready to undertake a major project it is not unusual to see a lack of a shared understanding of the program’s context. Specific assumptions and context defining factors that the owner’s organization must be cognizant and comfortable with include those with respect to:

More (including footnotes & references) …

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About the Author

flag-usabob prietoBob Prieto 

Senior Vice President

Fluor 

Princeton, NJ, USA 

Bob Prieto is a senior vice president of Fluor, one of the largest, publicly traded engineering and construction companies in the world. He is responsible for strategy for the firm’s Industrial & Infrastructure group which focuses on the development and delivery of large, complex projects worldwide. The group encompasses three major business lines including Infrastructure, with an emphasis on Public Private Partnerships; Mining; and Industrial Services. Bob consults with owners of large engineering & construction capital construction programs across all market sectors in the development of programmatic delivery strategies encompassing planning, engineering, procurement, construction and financing. He is author of “Strategic Program Management”, “The Giga Factor: Program Management in the Engineering and Construction Industry” and “Application of Life Cycle Analysis in the Capital Assets Industry” published by the Construction Management Association of America (CMAA) and “Topics in Strategic Program Management” as well as over 450 other papers and presentations.

Bob is a member of the ASCE Industry Leaders Council, National Academy of Construction and a Fellow of the Construction Management Association of America. Bob served until 2006 as one of three U.S. presidential appointees to the Asia Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC), working with U.S. and Asia-Pacific business leaders to shape the framework for trade and economic growth and had previously served as both as Chairman of the Engineering and Construction Governors of the World Economic Forum and co-chair of the infrastructure task force formed after September 11th by the New York City Chamber of Commerce.  Previously, he served as Chairman at Parsons Brinckerhoff (PB), one of the world’s leading engineering companies.  Bob Prieto can be contacted at [email protected].