How Owners of Projects/Programs Will or Won’t Succeed Part II:
Are you and your organization ready to deliver?
Is your organization drowning in questions on how best to manage and support the substantial increase in capital spend? Do you feel ready?
Recent legislation is an alphabet soup of huge new funding sources for public and private organizations alike, and a great opportunity for organizations to embrace long-awaited transformation. Owners of infrastructure have the opportunity to offer improved and new services to passengers, residents, students, patients, and communities.
Securing the funding, balancing that funding against existing resources, refreshing your strategy, and prioritizing which transformation project comes first are all challenges, but challenges that your organization and leadership are likely excited about and ready to tackle head-on.
Yet, you and your organization are likely less ready and less excited to ask yourselves the tough question: whether you are organizationally prepared to manage and support substantial increases in capital spend.
By asking yourself this tough question now, your organization can be ahead of the curve and consider this challenge before it becomes a problem. You’re not alone in facing this question.
Even before the once in a generation Federal investment enabled by CARES, ARP and the IIJ Acts, organizations have asked us ‘How do I double my capital spend?’ and ‘How do I meet the existing demand for investment on infrastructure and real estate?’ and below we offer some of the insight we’ve gained from advising our clients across diverse industries how to best prepare their organizations to deliver major capital projects and programs.
WHERE TO BEGIN: Don’t Forget Governance
In helping airports, transit agencies, municipalities, and institutions consider these questions, we have identified that the organizational readiness question is best answered through working along two parallel workstreams. Many organizations attempt to tackle these workstreams independently or ignore the second workstream entirely. Organizations that understand that these two factors are linked prove to have the most successful projects.
The first and most often focused on workstream is increasing capacity and embedding best practices into the planning, design, engineering, and construction within your organization.
The second, and less obvious, is the absolutely critical step of reviewing your internal organization for the ability to support the successful delivery on the scale needed. The most critical consideration in reviewing the ability to support at scale is ensuring a governance structure for decision-making is in place.
Governance is best addressed by providing an organizational champion (person or committee) that is focused not just on what is needed for delivery, but also the outcome of new capital investment. Once an individual or committee is appointed, they should begin asking and answering the questions about how your organization will prioritize plans and make decisions, particularly around how changes will be handled, from changes in overall scope to unforeseen conditions that require immediate decisions in the field. Many organizations have governance that works well when all stakeholders are in agreement on a decision or direction, but find their governance is lacking when stakeholders disagree.
Pressure test your governance by asking:
Is it clear which individuals or departments have input vs which have final decision authority?
In helping airports, transit agencies, municipalities, and institutions consider these questions, we have identified that the organizational readiness question is best answered through working along two parallel workstreams. Many organizations attempt to tackle these workstreams independently or ignore the second workstream entirely. Organizations that understand that these two factors are linked prove to have the most successful projects.
The first and most often focused on workstream is increasing capacity and embedding best practices into the planning, design, engineering, and construction within your organization.
The second, and less obvious, is the absolutely critical step of reviewing your internal organization for the ability to support the successful delivery on the scale needed. The most critical consideration in reviewing the ability to support at scale is ensuring a governance structure for decision-making is in place.
Governance is best addressed by providing an organizational champion (person or committee) that is focused not just on what is needed for delivery, but also the outcome of new capital investment. Once an individual or committee is appointed, they should begin asking and answering the questions about how your organization will prioritize plans and make decisions, particularly around how changes will be handled, from changes in overall scope to unforeseen conditions that require immediate decisions in the field. Many organizations have governance that works well when all stakeholders are in agreement on a decision or direction, but find their governance is lacking when stakeholders disagree.
Pressure test your governance by asking:
HOW TO CONTINUE: Look beyond the obvious
Additional key questions we often see overlooked but are essential to setting up successful governance are:
- Should/can we outsource vs building internal capacity?
- What external stakeholder engagement is necessary?
- How do we ensure that Federal money isn’t clawed back?
The organization champion can also be helpful in review of all the other internal organization functions that will be impacted. Functions that are often impacted when scaling up capital investment include the obvious departments such as: finance, procurement, legal, and facilities/maintenance, but also include less obvious impacts to functions like HR, IT, and public relations. Additional considerations such as ensuring adequate office and support space have been identified on-site for project teams is yet another factor that is all too often overlooked.
Whether you choose to explore best practices and fully re-engineer internal functions or simply ask various departments to come up with their own plans, consideration of the broader scale impacts before you ‘begin’ your project or program will ensure that you are best prepared, positioned to receive new funding and successfully deliver the promised outcomes.
Organizations faced with meeting the challenges above typically feel a sense of urgency. However, more often than not it is best to slow down, plan and prepare, before moving fast. The reality is it takes owners months of significant preparation and effort to position their organization for the impacts that come with substantial increases in capital development.
In the current opportunity-rich environment, the demand for ‘shovel ready’ projects is significant, but so is the need for organizational readiness. Success means that we all benefit from the once in a generation investment, failure means at best, a lost opportunity, and at worst failed projects, misuse, and claw-back of funds. So, in tackling the tough question Is our organization ready to deliver? think beyond just the planning, design, engineering, construction department to what else it takes to get the best outcomes.