Project Management Institute

All Systems Go

Henkels & Mccoy's PMO Ensures Its Infrastructure Projects Will Support Communities For Years To Come

2017

PMO
of the
Year
Award

FINALIST

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From left, Bob Moore, Rebecca Moodie, PMP, and Bob Kearns, PMP

BY TEGAN JONES

PORTRAITS BY GENE SMIRNOV

Electricity. Gas. The internet. If energy and communication technologies are the lifeblood of modern societies, then infrastructure—vast networks of pipes and wires—is the backbone, ensuring steady supplies and services. Engineering and construction companies like Henkels & McCoy (H&M) build that backbone.

PMO PROFILE

Established: 2004

Location: Blue Bell, Pennsylvania, USA

Size: 61 full-time employees

Annual PMO budget: US$1.5 billion

Average project value: US$2 million

H&M’s project portfolio, worth nearly US$3 billion, spans the power, energy and communications sectors. The company’s project management office (PMO), created in 2004, helps keep all of its initiatives on track. With a focus on operational excellence, the PMO drives growth, says Bob Moore, operations vice president, H&M, Blue Bell, Pennsylvania, USA. The company’s annual revenue has more than tripled since 2005.

“The success of the project drives customer satisfaction. Customer satisfaction then drives repeat business,” he says. “We also have the ability to find and garner new customers because of project successes we’ve had in the past.”

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“The success of the project drives customer satisfaction. Customer satisfaction then drives repeat business.”

—Bob Moore, Henkels & McCoy

The PMO maintains high performance by keeping its fingers on the industry’s pulse. Continually assessing the marketplace allows the team to anticipate customer needs, says Eric Egelhoff, PMP, director, project management and operational excellence, HMI Services Inc., Blue Bell. (HMI Services is a subsidiary of H&M; the PMO supports projects across the entire organization.)

“We know what our story is, and we know how we’re adding value to the customer and the marketplace,” he says. “We’re ahead of that game.”

TARGET PRACTICE

Learning about projects long before they launch helps H&M’s PMO identify potential risks before the organization starts spending money in the field. It plays a major role in identifying project risks and opportunities from the beginning. Knowing the lay of the land allows teams to approach the work with a fresh perspective—and start honest conversations about how customers will measure success once the project closes.

“By establishing the goals at the kickoff meeting, we’re able to know what our customers’ key performance indicators are right out of the gate,” Mr. Egelhoff says.

The PMO also sets internal goals for its projects to drive profitability. One of the metrics it tracks on an annual basis is the cost of rework. By homing in on areas where project teams are spinning their wheels, the PMO can offer training and tools that help ensure work is done right the first time.

But H&M doesn’t just look back after a project is over. The PMO tracks performance throughout the life cycle, which means it can react quickly if a project team identifies deviation in cost, safety, schedule or quality, says Bob Kearns, PMP, senior director, PMO, H&M Shared Services Inc., Blue Bell. (H&M Shared Services, which houses the PMO, is another subsidiary.)

“The PMO gives H&M a strategic advantage by allowing us to spot trends that may be adverse early on in a project,” Mr. Kearns says. “With that, we can take corrective actions and get things back on track sooner rather than later and deliver a successful outcome.”

Greater visibility already has led to better financial outcomes. From 2008 to 2017, the PMO helped H&M increase profitability by 110 percent and cut losses (negative gross margin) on jobs by 32 percent. And the nearly century-old organization continues to grow.

“In 2016, the company had one of its strongest financial years in its history,” Mr. Kearns says.

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A UNIFIED FRONT

Finding the most efficient routes to complete projects successfully starts with creating clear rules of the road. That’s why the PMO’s project delivery processes are based on PMI’s A Guide to the Project Management Body of Knowledge (PMBOK® Guide). Its tools and standards prevent teams from taking the wrong track when they start something new.

Teams draw on their shared knowledge base to improve project performance every day, says Rebecca Moodie, PMP, project manager, H&M, Blue Bell. And with everyone across the organization working from the same playbook, H&M can easily staff project teams up and down as conditions change.

“It allows any project manager to jump in where somebody else left off or whenever he or she is needed,” she says. To build its bench, H&M invests in project management training and certifications. In addition to driving efficiencies, having project managers with PMI’s Project Management Professional (PMP)® certification boosts client confidence, says Mr. Egelhoff.

From Good to Gold

H&M’s talent development program fills the company’s project leadership pipeline.

There are plenty of future project managers out there. But not all of them know it yet.

Henkels & McCoy’s project management office (PMO) gets the word out. Its talent program helps the company identify and develop recent college graduates who have the makings of great project managers but lack the formal education needed to run projects.

“They may have a construction degree. They may have an engineering degree. They may come from biology,” says Bob Moore, operations vice president, H&M. “The PMO has been instrumental in making sure they’re trained correctly.”

The company’s Growth Opportunity Leadership Development (GOLD) program signs recruits for a two-year rotation where they learn about and take ownership of deliverables related to safety, quality, project controls, estimating, business development and more. Once they complete the program, these employees are ready to become project managers.

“The training makes sure people are level set in terms of the organization’s expectations,” says Eric Egelhoff, PMP, director, project management and operational excellence, HMI Services Inc. (a subsidiary of H&M). “They understand the terminology, the processes and the procedures that are part of our project management methodology.”

The GOLD program also helps H&M compete for the top next-gen talent. Ambitious young workers aren’t just looking for a job—they want a career, says Bob Kearns, PMP, senior director, PMO, H&M Shared Services Inc. (another subsidiary).

“By investing in project management training and credentialing, we can attract stronger talent and bring them into a career path,” he says.

“The PMO gives H&M a strategic advantage by allowing us to spot trends that may be adverse early on in a project.”

—Bob Kearns, PMP, H&M Shared Services Inc.

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Trickle-Down Buy-In

Steady executive support for Henkels & McCoy (H&M)’s project management office (PMO) was the starting point for taking the organization’s project management practices to the next level, says Bob Moore, operations vice president, H&M.

“The people down in the trenches want to see that buy-in at the top level,” he says. “Once it’s there and it’s consistent, then the rest of the organization will follow.”

The combination of senior management backing and quantifiable results has gone a long way toward winning over construction managers in the field. Many of these people had run projects for decades before the PMO started rolling out new processes, tools and techniques—many designed to help manage increasingly large and complex projects. Industry vets had to change their ways.

While some initially saw the PMO as unnecessary overhead, the results soon changed opinions. Ultimately, teams found the new processes made their jobs simpler and their lives easier.

“In the early years of our project management implementation, construction managers would sometimes keep us at arm’s length. But nowadays, they come to us asking for support,” says Bob Kearns, PMP, senior director, PMO, H&M Shared Services Inc., a subsidiary of H&M. “They draw on our PMO’s expertise because they know that they’ll have a better project outcome as a result of it.”

“[A shared knowledge base] allows any project manager to jump in where somebody else left off or whenever he or she is needed.”

—Rebecca Moodie, PMP, Henkels & McCoy

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“The PMO gives us a competitive edge by establishing set processes and procedures across the organization.”

—Eric Egelhoff, PMP, HMI Services Inc.

“When we sit down with customers and talk about a key leader having a PMP® certification, it establishes a lot of credibility,” he says. “Our customers know what that stands for and know what kind of person we’re talking about.”

Developing deep project management knowledge across the organization also has helped H&M manage rapid growth over the last decade. The PMO’s training on processes, procedures and controls has helped the company take on larger and more complex projects as they arise, Mr. Kearns says.

“By investing in training and development, we build project managers into stronger leaders,” he says. “We can drive greater success for our projects and make the company more successful—from a financial and a safety perspective.”

Safety-focused processes, such as coaching observations and daily job briefs, keep team members continually attuned to H&M’s safety requirements. For instance, if a project experiences a safety incident early on, team members escalate the information to the PMO, which is prepared to act fast to prevent additional problems. By marrying safety initiatives to its project management methodology, H&M cut its recordable injury and illness rate by more than 60 percent between 2008 and 2016. (The rate is gauged by the U.S. Department of Labor’s Occupational Safety and Health Administration.)

“If you look at the processes that we’ve used from project management to help achieve our safety goals, we’ve prevented over 1,000 injuries just since 2008,” Mr. Egelhoff says.

FEEDBACK LOOP

H&M also sees every job as a new opportunity to learn. After a project closes, the team looks back to see where it performed well—and where things went off the rails. Everyone who was involved at every stage meets to discuss risks, opportunities and lessons learned, and brainstorm ways to do things better the next time.

“Once we’re finished with that meeting, we formalize and document lessons learned and then share them with the entire organization so everybody can use this information moving forward,” Ms. Moodie says.

H&M conducts similar debriefs with its clients. It uses surveys to get pointed feedback about where its teams can improve. For example, one client had concerns about how H&M was monitoring subcontractors working on-site.

“So we did a lot of work on our site-specific plan to make sure that everybody out there knows that the subcontractors are part of Henkels when they’re out there working for us,” Mr. Egelhoff says.

The PMO’s procedures, processes and control points have helped the organization maintain a customer satisfaction rate of above 98 percent since 2005.

“The PMO gives us a competitive edge by establishing set processes and procedures across the organization,” Mr. Egelhoff says. “It allows us to make sure we have a repeatable product that we’re able to deliver to our customers.” PM

Lights, Camera, Action!

Check out behind-the-scenes videos of this year’s PMO of the Year winner and finalists on PMI’s YouTube channel.

Calling All PMOs

Honor PMO excellence in 2018. Visit PMI.org/Awards.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

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