photography by HA LAM
STEVE DOBBS, group president of Fluor Corp., is responsible for all aspects of project performance globally within the company's Industrial & Infrastructure group. Headquartered in Aliso Viejo, Calif., USA, Fluor is one of the world's largest publicly traded engineering, procurement, construction and maintenance services organizations.
BY STEVE DOBBS
At Fluor, we make our living with the successful engineering, procurement, construction and maintenance of complex projects. Project management absolutely has been a critical factor in sustaining our success. The risk management elements that are integrated into our project management practices are considered to be both a core competency and a competitive differentiator.
Recent project and financial failures by engineering and construction firms are generating tremendous interest and attention in both the project and business risks surrounding capital projects. Some describe risk management for capital projects as a “new” field, yet risk management has long been a part of fundamental project management.
Our project portfolio runs the gamut, from building a large mineral processing facility in remote Indonesia to a new communication system for the London Underground. Ultimately, it takes robust risk management for a company to do this. At Fluor, risk management is a continuous thought process and a cultural imperative that fundamentally is integrated into our project management processes. It's impossible to separate risk management from project management: They're fundamentally the same. We have a number of risk management specialists and reviewers, but we never want to find a project manager who thinks of risk as somebody else's responsibility.
When you look at the intersection of project management and risk management, many professionals focus on tools, technology or reporting requirements as being the “holy grail,” but I don't see these as ever being a substitute for basic project management talent and experience. We watch people's career paths and try to develop opportunities for them to learn and grow. Through formal training, we instill a fundamental understanding of project management tools and a common language in new hires. The most effective business development tool is the opportunity to work with a seasoned project manager on a difficult project—the lessons you never forget come from the decisions you make when the training wheels come off and you manage your first project.
I‘m proud that Fluor's senior management, up to and including our chairman and chief executive officer, is made up of individuals who have all been successful project managers. We apply many of the same risk management practices we learned running projects to our overall business risk management.
This rigor has held us in good stead in an industry with a history of disappointing business failures. In the capital project development business today, there are few companies with a long, successful history and strong balance sheet: The companies that have done well have projecta nagement practices that keep them from making catastrophic mistakes. We've continued to succeed and grow during a period in which many other companies’ earnings have declined, and we think this is a direct result of our project management skills and risk mitigation and review process.
The lessons you never forget come from the decisions you make when the training wheels come off and you manage your first project.
The success of our project management practices can be seen at the bottom line. Since 2000, Fluor's earnings have grown at a compounded annual rate of 14 percent. There is a direct correlation between these results and our attention to project execution, the maturity level of our people and the investment Fluor has made in both.
It's vital for a business to develop its project management competency. I‘m convinced Fluor's legacy will be measured by our success in this endeavor. PM
JANUARY 2005 | PM NETWORK 21