The project management business process implementation shortfall--or--what has derailed us and what we can learn
Stephen M. Lightner, Senior Project Manager, P.E., PMP
The Sacramento District Army Corps of Engineers (Corps), as have most of the other Districts in the Army Corps of Engineers, has been trying to reinvent itself in the Project Management image. The need was obvious. Our cost to customers was growing and customer satisfaction was decreasing. Clearly the Corps needed to find a better, faster, cheaper, way of doing business. Sacramento District Army Corps of Engineers, as a typical large functional government agency, provides an excellent example of some of hurdles these types of organizations face. Having been in the process of implementing project management formally since 1993, and with both strong Headquarters and District (local) leadership in the last year, the results have been disappointing. A recent survey of employees has indicated that less than one third believe that significant progress has been achieved (Brown and Associates, 1999. This paper attempts to identify the difficulty and pitfalls large functional government agencies face, and possibly indicate some of the lessons learned.
For those not familiar with the Army Corps of Engineers, the Corps is a large design and construction arm of the Federal Government. Although best known for its flood control work (dams, levees, and operation of locks and dams) and regulatory work (Wetlands), the Corps also manages parks, environmental cleanups, and design and construction of facilities for other federal agencies. These projects are generally grouped into five categories, Civil Works (flood control, dredging, dams, and levees), Military Construction (design and construction of military facilities), Hazard, Toxic, and Radioactive Waste (HTRW) cleanup, Support for Others (non-military customers), and finally, Operations and Regulatory (Parks and Lakes). The Sacramento District is a typical functional government organization, made up of Engineering, Construction, Planning, Contracting, and Real Estate Divisions. The Corps has traditionally operated these as functional independent operations with their own budgets, reporting requirements, and performance measures.
As the private sector has realized through a very competitive business environment, they must be able to react quickly to changing markets and be able to perform their core processes faster, cheaper, and better. It has becoming apparent over the years that this also applies to the Army Corps of Engineers. Federal customers are being given an opportunity to choose their provider of design and construction services or they are selecting to perform the work themselves. The pressure was on the Corps to reinvent itself, to become the agent of choice for our customers. This was embodied recently in the Chief of Engineers Vision Statement that in part stated that the Army Corps of Engineers would be “The Engineer team of choice—responding to our Nations needs in peace and war.” The goal associated with this was “Dramatic improvement in performance and customer satisfaction will be achieved through best business practices, bold process reengineering and innovative use of technology.” The response was a decision at the Headquarters level (Corporate Office) to embrace process management. Not to look at pieces but to look a process that added value to our customers and to find ways to increase that value. The result was the issuance of Headquarters guidance, known as ER 5-11-1, Program and Project Management. The document was a basic overview of the Project Management system familiar to most professionals experienced in PM or with the Project Management Institute's (PMI®) A Guide to the Project Management Body of Knowledge (PMBOK® Guide). The document left many of the details of PM to the individual Districts, but defined those elements that were mandatory. Customer requirements were defined in terms of projects, each project managed cradle to grave by a matrixed team of cross-functional resources, led by a PM. The PM was the single point of contact for the customer. The PM would be responsible for the management plan that would include those systems necessary to monitor and control performance. Finally, the PM (and his team) would be ultimately responsible for the success or failure of his project (accountability).
This then sets the stage for the implementation of PM and the necessary business processes within each District for achieving the goal of better-cheaper-faster. The model was to move from the focus on individual tasks, to a process model that integrated all of the various activities into a more streamlined value adding process that transcended functional boundaries. In order to give a framework for what did, did not, and should have happened I would offer the following model (Dimancescu, Hines, & Rick, 1997, pp. 26, 27):
Process-Based Lean System (New): Strategy drives Process, which drives Roles and Responsibilities, which finally drives Structure. They must be aligned.
Task-based Command and Control System (Old): Strategy drives Structure to Process tasks to Roles.
Strategy: A response to external forces in concert with an understanding of internal capabilities and resources. These result in a set of business goals and objectives.
Processes: Interconnected value-adding relationships design to meet business goals and objectives.
Roles and Responsibilities: Determined in such a way as to carry out key processes.
Structure: Reflects the intended strategy and process orientation of an organization.
The process-based system determines its strategy based upon customer needs and those processes, skills and abilities in the organization that add value to the product for the customer. Once these core processes have been determined, then roles and responsibilities are defined to efficiently carryout these process maximizing value to the customer and minimizing functional interface. Finally the structure is determined to support roles and responsibilities and ultimately the processes.
The path Sacramento District took to reinvent themselves as a process-based system began in about 1993. Several clarifications need to be made to fully understand the monumental changes required. The Corps had operated as a strong functional organization. To simplify, Design Division did design, with separate budgets, performance measures, and reporting systems. Construction, Real Estate, Contracting, Planning, and all the other divisions operated similarly. There was no such thing from the perspective of the functional organizations as a total customer delivered project, just pieces of projects perform by that division. Each of these pieces was seen as a project in itself and then handed off to the next division. There were “Project Managers” but generally they were facilitators, not leaders of cross-functional teams. In many cases they were the “five o'clock news.” They reported what happened but neither had the authority or the tools to really track and control cost, schedule, and technical requirements. The real power and authority was in the Division Chiefs and their subordinate managers.
Given this structure, there was a general lack of support for this transition from the Division Chiefs on down. First they didn't see a need for this change. The performance measurements in place measuring functional organization's success did not indicate real problems with customer satisfaction. The changing customer environment, that is his ability to choose his service provider, was not yet perceived as a threat to their existence. A cardinal rule of change was being violated. If you don't change what you measure, then the measurement will drive the process b (ESI International, 1998). In other words if the systems in place to measure progress and provide rewards are not changed, then old behavior (which gets rewarded) will rule out over new processes and behavior. The Division Chiefs and middle managers were threatened by this organizational change. It was going to put PMs who were not under their control in charge of processes and budgets that they, the Division Chiefs and their middle managers, were evaluated upon. This was unacceptable to them for obvious reasons. Be that as it may, they were overruled and a separate Project Management Division was established in the early spring of 1994.
This brings us to mistake number two, failure to let processes define roles and responsibilities that ultimately defines the structure that best supports these processes, roles, and responsibilities. In our model that we cited above (Dimancescu, Hines, & Rick, 1997), the Process-Based Lean System, strategy drives process, drives roles and responsibilities, which drives structure. In this case, strategy drove structure, a PM Division. This is right out of the old Task-Based Command and Control System. In other words we were simply reinforcing the old model of a functional organization. Engineering still did what Engineering did, Construction did what Construction did, but we introduced a new level of management with little to no thought about process. This became immediately apparent when it was recognized that there was a large duplication of effort and function. There was extreme reluctance for the division chiefs to relinquish any of the power and control over their internal processes. The PMs fell into a role of Program Managers in that they controlled and reported program budgets, but the details, except in some very isolated cases, were still managed and controlled in the functional divisions. Processes remained unchanged and we continued to manage in a task oriented command and control manner. In effect we had created a whole team of anchor reporters for the five o'clock news with very little control of their projects and very little value added for the customer.
Generally speaking things stayed about the same for next several years with no real progress to either looking at process innovation and design, or changing our focus to becoming a more project oriented organization. There was some effort toward TQM and process improvement teams were formed to look at processes and recommend changes, but the recommendations were nether radical nor well received by those who could effect change. Again some of the same inhibiting factors were at play. First there was not a strong leadership vision in the District driving the PM model, and in conjunction with this, the old measurement and reward system came was still in place (No strong driving leadership for this change and we did not change our reward or performance measurement systems to reward process change and innovation). Several things took place to change this situation. First, customer satisfaction, especially for the Sacramento District, reached an all time low and as a result of this and other factors, the Corps Headquarters Leadership promulgated and emphasized the vision and goals identified earlier in this paper to establish a Project Management based management system. Project Management was going to happen and District Commanders were going to be rated on their ability to implement it.
Events had made change an imperative. A recent survey with over 88% of the workforce participating indicating that 80% of these believed that the District had to change to survive (Brown and Associates, 1999). We now have some real forces coming into play working for this implementation. First at both the Corporate (Headquarters) and District level, there was strong leadership with a vision to implement PM and become a process-oriented organization. Additionally, the internal division level management recognized that improvements in performance were necessary. The first step taken by the District in implementing a real Project Management Business Process was to establish a “Corporate Board” to make the hard decision and direct the changes. The Corporate Board was made up of the Division Chiefs of most of the major divisions, Engineering, Construction, Real Estate, Planning, and Project Management. Two major mistakes were made here. First, it was management by consensus and second, those having the most invested in the existing systems were dictating the approach (Prichett & Pound, 1993, p. 2). These two factors worked in concert to slow down and bring decision-making and change to an almost virtual stop. Note that the same survey cited above recorded that less the one third of the workforce believed that significant progress had been made toward implementing Project Management Business Processes. The slow progress and power struggles within Corporate Board introduced major problems in communicating where the organization was headed. We will return to this subject later. The Corporate Board's first step was to establish a new PM structure. Sound familiar? Structure before process. Once again the task oriented command and control system was being established with a new title, PM. The real mistake here is that the value added processes (value added to the customer) were not identified and established first, roles and responsibilities defined, and then a structure established to reinforce the processes, roles and responsibilities. This is understandable. No one on the Corporate Board was either formally trained or truly familiar with a true PM organization. Nor was there any real attempt to get familiar with the current industry tends and best practices. From the old way of doing business, PM was simply a command and control system that reoriented the power structure in the District. The existing culture was dictating the approach and they were locked into their existing cultural view of how this process should work. The new structure established by the Corporate Board looked remarkably like the old structure with the names changed. The Corporate Board was creating structures in their own image because that is how they have been successful in the past. The old system of performance measurement and rewards were still in place and rewarding those organizations that conformed to this model.
The establishment of this new PM organization was a very painful task for the Corporate Board. They were asked to staff this organization with some of their best people (who had been doing a form of PM in their own organizations). Additionally, they were being asked to give up their control of processes (albeit inefficient processes) that were and are the basis of their performance measurement and reward systems. So to summarize we have three major mistakes here: First, we have put those who have the most invested in the old culture in charge of the change; Second we have failed to change the performance measurement and reward system; and finally we are asking those in control to take a different role in the organization, that of resource managers instead of owners of processes, one they are unprepared for. Then we are surprised when the organization that is created looks just like the old organization (structure before process) and nothing really changes. To add even more inhibition to process and process innovation, the organization has established an automated management system for project reporting and funding management, without addressing value added processes for the customer or what our new processes would look like. In other words, the structure of our management systems was and is driving the detail of our processes, instead of our processes defining the systems (structure) to support them. The Task-Based Command and Control is the model that is driving the reorganization. Thus, nothing is really being changed other than titles and where people sit. Again this is born out by the 1999 survey that indicated that less than one third of the workforce believe significant progress was being made on Sacramento Business Plan goals.
Now we return to the communications issue. A tremendous amount of high quality communications is necessary to sustain a cultural change (Prichett & Pound, 1993, p. 20). The 1999 employee survey indicated that there were a “large number of don't knows to many questions suggests problems with communications and the flow of information.” Additionally, the survey indicated that the biggest issues may be “I don't know, I don't understand, and/or I don't know how.” What this indicates is that we now have a work force, not to mention a whole division of Project Managers, whose understanding of what they are suppose to do is at best blurry. There has been no training in process or skills necessary to perform successfully as a PM organization because they have not been fully understood by the Corporate Board. The Corporate Board's cultural focus is on what they understand as the traditional PM role in the Corps. That role, from their point of view, is already well defined in terms of the old culture, and therefore this urgent need is not perceived as an a real urgent need. “If you are going to break the grip of the old culture, seize control of the schools” (Prichett & Pound, 1993, p. 41). Along with this, the Corporate Board is perceived as sending mixed messages about the true role and responsibilities of the PM. There is the conflicting vision of the PM as the single point of responsibility and the team leader, and the reality that the divisions maintain the command and control over the critical processes. No clear model has been established because the value-added detailed processes of PM have not been well defined in the organization. In fact the Corporate Board, after agreeing to and establishing the structure for PM, then began commissioning teams to look at process design, with full review and approval by the Corporate Board. Once again we have those with most invested in the old culture determining the process of the new one. Additionally these processes have to take into account the requirements of the current (old) management systems. The teams have worked very hard to develop processes within these constraints, but none of these teams were given any formal training in business process, evaluation, design, and innovation. Processes are designed to be consistent with current practices and reporting requirements and the question of what is the value added to the customer is usually not the driving force. Failure to clearly define or communicate the core value added processes (to the customer), and failure to clearly define the roles and responsibilities of PMs to carry out these processes has had the effect of forcing PMs to fall back on old ways of doing business, because the new way has not been defined and there are not processes or structures to support them. In effect we have created PMs who are neither empowered nor enabled. They are not empowered because the divisions still own the key processes, and they are not enabled because they have not been given the tools or training to perform the role that has been defined for them. The new process of team ownership and management is still undefined. Such subprocesses as how is a team formed, who provides the resources, what is the level of control, what are the limits of authority, how is cost and schedule reported and managed, what is an appropriate risk analysis, how are high performing teams trained and enabled, have not been defined. It is no wonder that we fall back upon old processes to get the work done.
Along with these cultural inhibitors there are also inhibitors specific to the government system. First and foremost is the personnel system. We have noted above that the old culture creates structure that is hierarchical in form. This is also driven by the fact that job classifications require this form in order to establish the higher pay grades (GS). Therefore when you are moving personnel around in an organization, in order to save their grades and pay structure, generally you have to put them in charge of something, hence the hierarchical structure developed. So instead of a flat PM organization, you get a pyramid of senior supervisors. Next you have the reporting systems established by other agencies or Headquarters that cannot be changed by the local agency and drive the organization structure to support the reporting. In some cases funding actually flows depending on this system and therefore the system takes priority over the customer's needs. Another inhibitor specific to the Corps is that the leadership is frequently changed. Military leaders who are the drivers in the change process are seen as temporary and sometimes there is a tendency to try to wait out the change. As noted above, cultural change requires consistent and persistent leadership and the perceived temporary nature of their tenure has a tendency to dilute the vision.
The Sacramento District has been involved in trying to implement the PM model for almost seven years with little success. Very little has changed in terms of more efficient and effective business processes. There is strong pressure for change. As already noted, over 80% of the workforce sees change as necessary to our survival. There is strong leadership both at the Headquarters and District level for this change. Yet there are inhibitors that have delayed or defeated the envisioned change. They may be summarized as follows:
1. Letting the old culture direct and control the change.
2. Inability to effect changes in the performance measurement and reward systems that resulted in the existing organizations and their span of control.
3. Lack of a clear vision of the business process being established.
4. Failure to use lessons learned in the industry (PM) to facilitate change management.
5. Letting structure define process, both organizationally and in terms of systems.
6. Failure to train the workforce to enable them in the new process.
7. Lack of flexibility in the personnel systems to allow reorganization other than in the hierarchical structure to save pay and grades.
8. Lack of flexibility in dealing with those who won't accept the new model.
9. Failure to prepare, plan for, and adequately understand the new roles and responsibilities required of the power centers in the old culture. Division Chiefs become resource managers and coaches, they establish priorities, but they no longer control processes.
So where do we go from here?
Lessons Learned and Recommendations
I believe it was Albert Einstein who said something to the effect of “Only an idiot would continue to do the same thing over and over again and expect a different outcome.” Yet as seen above, an organization with good intentions and strong leadership can easily fall into this trap. What does a large federal bureaucracy do at this point to continue to drive change and establish Project Management as the project delivery system of the Corps. Here are some short term recommendations. Note that none of these are very original and I have borrowed heavily from my references:
1. Establish a clear vision and understanding of the process model (Project Management) we are implementing must be developed and communicated clearly to the workforce. Another way of saying this is that process must come before structure. Process drives roles and responsibilities and these should be clear. Finally structure is determined and instituted to support the above. This is the Process Based Lean System.
2. Manage change as a project. Establish a road map (Work breakdown structure, schedule and budget). Put a Project Manager at a very high level in charge and establish measurements and rewards. Make sure this manager is here for the long term.
3. Do not allow ambiguity. Ambiguity is a foothold the old culture will use to protect and reinsert itself. If you want an organization that is flat, PM driven, with the PM as the leader, make it clear. State that the PM is in charge and those on his team report directly to him. Reward compliance and punish non-conformance.
4. Once the vision is clearly defined, change the performance and reward system to reflect the new process. This must be done at the highest level and is extremely hard to do in a government agency because agencies outside the organization's control determine these systems (such as Congress, Headquarters, DOD, etc.).
5. Don't let the existing structure dictate the approach. The existing culture is too tied to existing ways of doing business and is designed to protect itself.
6. Deliberately destabilize the old culture. Relocate groups and abolish old systems to force the hard journey to new ways of doing business.
7. Train people in the new systems so that they can be enabled when they are finally empowered. Too frequently we empower without enabling and then are surprised by the failure that results. Once the workforce sees the new system and understands its benefits, they become a major force in bringing about change.
8. Involve middle management. If they don't support the change remove them. They have the most to lose and are closest to affecting how the change is communicated to the working force.
9. Make value to the customer the primary motivation for change. Encourage abandoning processes that do not add to the value of the product. Again very difficult in the government culture where some processes are designed and controlled by the needs of other organizations and are not customer driven. Try to minimize the non-value-added processes by simplifying and moving away from customer driven processes.
10. Once the processes are established, then design the support systems to enable the processes. Once again, very hard when centralized management systems are directed from above. Make the test of a system does it support the PM process so that value (control of cost, schedule, and technical product) is increased for the customer in a way that enhances the total PM process.
11. Continually look at the process, either for incremental process improvement, or for radical process change to continue to add value to the product. Do not let structure define and freeze the process in time. Continually question process and structure.
12. Remove those who won't change. Hire those that can adapt to the new roles and responsibilities. This is extremely hard in a government agency. Lateral displacement is probably the only real option.
13. Restructure when the structure makes sense to the newly defined roles and responsibilities. Again in a federal organization where job classifications were established in the 1960 and have remained unchanged, hierarchical organization are driven by grade and job classifications and the attempt to remain within grades (pay). Survival of the organization may become more important that grade structure.
Ballard, Lieutenant General Joe N. (1998). Commander's Vision Statement, Goals and Objectives, US Army Corps of Engineers, http://www.usace.army.mil/essc/vision/introduc.htm
Dimancescu, Dan, Hines, Peter, & Rich, Nick. (1997). The Lean Enterprise, Designing and Managing Strategic Processes for Customer-Winning Performance, American Management Association.
Elliott Brown & Associates. (1999). USACE-Sacramento District Corps Plus Survey, Sacramento California.
ESI International. (1998). Business Process Analysis, Innovation, and Design. Washington D.C.
Pritchett, Price, & Pound, Ron. (1993). High Velocity Cultural Change, A Handbook for Managers. Pritchett Publishing Company.
US Army Corps of Engineers. (1998). ER 5-11-1, Program and Project Management, Washington D.C.
Proceedings of the Project Management Institute Annual Seminars & Symposium
September 7–16, 2000 • Houston, Texas, USA