The mastery of alliancing in a project environment

a true success story

Introduction

This paper offers practical insights into the creation, development, and dissemination of project management “best practices” within both strategic and project alliances. It is based on the actual case reviews of 10 facilities alliances. It will provide you with a greater understanding of the benefits and costs of capturing and using the knowledge and experience gained in a specialized working environment.

The paper is broken into four main sections. The first section provides you with background information on the situation that lead to the birth and development of a mechanism for creating, capturing, and disseminating knowledge on alliancing—the Alliance Excellence Matrix. The second section describes the Alliance Excellence Matrix itself. In the third section the paper presents the intentions and progress of an alliance between Colt Engineering Corporation and the University of Calgary's Faculty of Continuing Education. The fourth section describes the benefits received to date by those involved, as well as further expected benefits. This section also looks at what benefits you and others may potentially reap by following a similar path. A summary, with closing thoughts, concludes the paper.

Exhibit 1

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What Was the Situation?

Colt Engineering Corporation (hereinafter referred to as “Colt”) is a mid-sized engineering, procurement, and construction company that has successfully worked in alliances with oil, gas, and refinery clients in Canada for over 10 years. (Colt is headquartered in Calgary, Alberta, Canada.) Each of Colt's alliances were created uniquely to service the clients needs. Furthermore, most of these alliances have evolved and changed over time so that they could address the direct key issues they confronted and the changing market conditions.

Exhibit 2

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Colt has found that the stresses of setting up and maintaining progress within an alliance can be severe. However, the prize for doing such is also very worthwhile. Colt has also found that in alliancing there are expectations of rapid wins and immediate value. When these expectations are not met, patience within the alliance is sorely tested. Any such period in an alliance may be referred to as the “suffering period.” Thus, Colt has concluded there is the need to approach alliancing wisely, clearly recognizing the challenge and the prize from day one.

Because Colt has been down the alliancing path many times, it has a wealth of knowledge regarding alliancing. However, Colt also recognized that the knowledge and experience it had resided in only a relatively small number of its company staff and that an opportunity existed to consolidate and leverage such knowledge and experience in alliancing. Colt also made the assessment that the secret of leveraging was in the realms of transferring knowledge between its various alliances and the sharing the learnings and experiences amongst staff (up to this point any alliancing learnings had been well documented but typically remained within each alliance). Consequently, Colt saw the need and value of creating a vehicle to gather the learnings, technical, organizational, cultural and process and disseminate them to other Alliances to enhance the overall performance. The vehicle was christened the “Alliance Excellence Matrix.”

The Alliance Excellence Matrix

The Alliance Excellence Matrix is a database containing the knowledge and learnings from the various Colt alliances across Canada. It is currently under development as an intranet database.

Colt's initial attempt to gather and consolidate their alliancing knowledge resulted in many binders of rather unmanageable data. The challenge became to clearly make this data easily and succinctly available to Alliance leaders and staff. Thus, the idea of an intranet became extremely attractive to Colt, and the focus then shifted to how best to present the gathered data in a manner conducive to learning. With this focus in mind, Colt opened dialogues with the University of Calgary, Faculty of Continuing Education and with Novokowsky Consulting Group Inc. The result of these dialogues was the development of the Alliance Excellence Matrix intranet framework, as shown in Exhibit 1.

As shown in Exhibit 1, the Alliance Excellence Matrix uses two critical arrays of business fundamentals to organize its alliancing knowledge. On the “y” axis are the six components critical to the success of any business, whether in an alliance or not. On the “x” axis are the five layers of work that each of the business components be part of. The result of the intersection of each axis element is a matrix of 30 cells, within which all the alliancing knowledge and experience is categorized into. To help in your understanding of the matrix, each axis is described in more detail below.

Exhibit 3

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“Y” Axis: The Business Components

The six critical business components, around which the Alliance Excellence matrix knowledge is organized, are as follows:

Aim: Focuses on the necessary visioning and evidence of success at a high level.

Markets and Customers: Focuses on tending to the market and clients needs.

Systems and Processes: Captures the processes, tools, and systems used to organize and execute work within an alliance, to achieve the Aim and satisfy customers.

Structuring: Focuses on the divisions of labor (organization structure) and the coordinating mechanisms for work execution and goal achievement.

Staffing: Looks at all the people requirements to do the work, e.g., the educating, empowering, assigning, and rotation of staff.

Culture: Focuses on the cultural alignment of management and staff necessary for success.

“X” Axis: The Five Layers of Work

All organizational work in alliancing is seen to exist in five enabling flows as follows:

Operate Work: Encompasses all the work done as part of the alliance's Core Processes. In production, it is the physical movement and transformation of material from input to output. In service, it is all the steps in the value transformation of direct input and resources to produce the service.

Coordinate Work: This layer includes all the work done that:

• Monitors the actual occurrence of the Operate Work

• Anticipates and predicts/forecasts the need for more or less Operate Work, and the timing

• Synchronizes the Operate Work such that all Operate Work arises or happens precisely at the right time to maintain the ideal.

Sustain Work: This is all the work that manages the external and internal environments to ensure the Operate and Coordinate Work get what they need to sustain their vitality and viability.

Improve Work: This is all the work done that is focused on improving the effectiveness (doing the right things) and efficiency (doing things right) of the business (Operate, Coordinate, and Sustain Work).

Regenerate Work: This is all the work focused on considering and implementing changes to the business in light of the changing environment. It leads to the next adaptive evolutionary step.

To help get a better sense of the Five Layers of Work, they are depicted in Exhibit 2.

By summarizing its learnings, knowledge and experience into the cells of the matrix created by the Business Components and Five Layers of Work, Colt has created the opportunity to go swiftly to any area of knowledge that an individual has a concern about. As a further enhancement to this capability, the Alliance Excellence Matrix database is invaluable for two different major user groups:

1. Pre Alliance and Start Up: Users in this group have access to the knowledge that focuses on the conceptualizing through to start up of an alliance.

Exhibit 4

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2. Alliance Regeneration: Users in this group have access to the knowledge that focuses in on maintaining and improving an existing alliance.

The issues covered in each of these user group categories, although related, are quite uniquely different. In Colt's study of alliancing, they have found many alliances fail in their infancy due to non-aligned expectations, cultural differences and inadequate planning. These issues are addressed in the first user group's category, along with the business development issues preceding an alliance. The issues addressed in the second user group's category focuses on the issues of sustained operation and periodic regeneration of the alliance. Within both users group, the Alliance Excellence Matrix is equally beneficial to project alliances and strategic alliances.

Common to both user group categories is the process. It works through an intranet-style framework enabling the user to search and select topics. The user, in start up mode, works his or her way through the matrix, viewing data and learnings to select models most appropriate for the concern. To make this search easier, an “executive summary” is developed for each topic or element in a cell of the matrix. The executive summary enables the user, at a glance, to establish value of the topic relative to their concerns.

The executive summary answers the following questions in a clear, complete, and concise form for the benefit of the user:

• What purpose(s) and value(s) does this topic serve?

• Where does it fit in (in relation to other elements of the Alliance Excellence Matrix)?

• What are the key elements of this topic?

• Who are the key alliance staff who are the experts in this topic?

The executive summary also provides hypertext links to enable the user to move horizontally as well as laterally through the matrix.

Beneath the executive summary lies the core material of the Alliance Excellence Matrix—the data, learnings, and knowledge in both text and graphic form. All this core information is accessible to the user “on screen,” as well as giving them the capability to download or print the information, subject to their appropriate security clearances. Beyond this core information, supplemental reference material is provided both onscreen and as recommended reading.

To get a better sense of the working of the Alliance Excellence Matrix, an example will be given. Imagine an Alliance Manager who is looking to improve the alliance structure. On viewing the Alliance Excellence Matrix, he/she would find “Organization Options” within the cell that coordinates “Structuring” and “Operate work,” i.e., Cell “P.” Clicking on “Organization Options” he or she would be taken to the executive summary page, which would list the various alliancing structuring options for operate work. These options would include for example a “strong functional structure,” a “strong project structure,” a “blended project structure,” and so on. Selecting on one of these options he or she would be taken to a detailed review of the option. This review would describe the strengths and weaknesses of the option, what you need to consider in selecting it, in which context it works best, where this option has succeeded (or failed) and why, and so on.

Exhibit 5

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Although this example may appear trite, allowing a manager or supervisor to “surf” this alliancing knowledge can have a major impact on their decision-making, problem solving, and actions.

In the construction of the matrix, the raw material submitted for inclusion was filtered to incorporate only that which was considered “added value” knowledge to alliancing. The data was then entered into the intranet with electronic links and search parameters built in for ease of use and maneuverability. By reviewing this history of learnings, the intent has been to create a faster, smoother “start up,” thus allowing success to be achieved earlier in the alliance, while minimizing the ongoing risk of failure due to frustration and lack of clear guidelines.

But capturing the knowledge into an Alliance Excellence Matrix is only part of the challenge. Making it “fit” with all the potential users needs and learning styles was another. Colt's acknowledgement of this second challenge led them to the Faculty of Continuing Education, at the University of Calgary.

“The Alliance” for the Alliance Excellence Matrix

Colt quickly recognized its area of expertise lies in alliancing, not in adult learning in the workplace. Thus, the Faculty of Continuing Education, University of Calgary was approached and an “agreement in principle” was struck between both parties for an alliance around the Alliance Excellence Matrix.

At the time of writing this paper, this alliance is in its formative stages (at the presentation of this paper at the PMI Conference in Houston, TX, in September, 2000, we intend to report more of its substantive nature). A conceptual overview of this alliance is shown in Exhibit 3.

The Faculty of Continuing Education (CE) serves as the “front door” of the University of Calgary to many business and professional communities, as well as the general public. It is primarily responsible for programs that do not form part of the regular academic offerings of the University. The Faculty has a long history of partnership, working closely with Calgary's resource and engineering companies to develop and deliver highly relevant education, often on the company's premises and in flexible formats. The Faculty has over 20 years experience in delivering courses through technology ranging from audio conferencing to CD-ROM and two-way interactive video.

There are significant advantages to both parties for such an alliance around the Alliance Excellence Matrix. Colt looks to gain from the adult learning in the workplace expertise that the faculty brings. Further, because the Faculty of Continuing Education has created a leading-edge, prototype, interactive CD for self-directed leadership development, many of its concepts and features can be adapted to Colt's needs. Additionally, Colt may gain access to the leading edge of information technology expertise within the Faculty of Continuing Education.

The Partnership with Colt Engineering represents a new level of involvement where the University of Calgary can help meet Colt's education and training needs where appropriate and also advise them on other resources, be they courses, webpages, or books, that will meet their “just in time” learning needs. In return, Colt can provide a “living laboratory” for the research of the Faculty in improving workplace learning in a demanding and bottom line oriented setting.

Both parties stand to have a gain in both capability and identity by being in such an alliance. This notion leads to the final section of this paper—what value has come about as a result of the Alliance Excellence Matrix and what further value is expected?

The Value of the Alliance Excellence Matrix

Realized Value to Date

Although the Alliance Excellence Matrix is still a “work in progress” at the time of writing, it is still considered a success at this time because of the value it has generated so far—and it can only get better. Key value realized by Colt so far has included:

• Focused Effort. The Alliance Excellence Matrix has demanded a planned, proactive, approach be taken on common issues during alliance start up, operation, and regeneration.

• Increased Understanding. The Alliance Excellence Matrix has raised consciousness levels amongst staff of why alliances succeed (and conversely, why they fail—and how to avoid such pitfalls).

• Common Aims and Identity. The Alliance Excellence Matrix process has helped provide insights into the achievement of common alliance goals and strategies.

• Energizing Staff. The Alliance Excellence Matrix has created excitement around its potential and possibilities for the future betterment of Colt's alliances. Greater “discretionary effort” is being realized.

There have been additional, more subtle gains, from the Alliance Excellence Matrix. However, its real power is yet to be realized.

Expected Future Value

Through the Alliance Excellence Matrix, and Colt's alliance with the Faculty of Continuing Education, Colt has an opportunity to reach a wider audience of potential clients and employees. The main reason for this opportunity arises from the many potential uses for the Alliance Excellence Matrix. In other words, greater future value is expected from the Alliance Excellence Matrix from its use for:

• Marketing—attracting companies with the idea, and having it as a unique offering.

• Business Development—showing prospective and new clients the values of alliancing.

• Implementation—assisting existing alliances in their operational execution and in resolving any concerns that may arise along the way.

• Development—educating and upskilling alliance leaders, staff, and clients.

• Benchmarking—helping clients achieve “best in class” in relation to others.

• Auditing—doing stocktaking of where an existing alliances strengths and opportunities exist.

• Regeneration—provoking thought as to where the alliances might go in the future.

• Enculturation—helping alliances achieve higher performance through the strengthening of the alliance's culture.

In short, the Alliance Excellence Matrix is about accelerating and improving the alignment of the partners in doing the alliance work. In doing so, the traditional value curve (with its significant “learning” dip) is transformed to a positive value added curve in the minimum time possible. (See Exhibits 4 and 5.)

By association, the Faculty of Continuing Education hopes to also gain benefits by the recognition received by Colt as the industry leader in alliancing. Such recognition will add to the Faculty's “workplace learning” offering, making it more attractive to students who want the best possible combination of university-level education and pragmatic, real-world work experience.

Reading about the value received from the Alliance Excellence Matrix, and its expected future value should provoke a question in your mind—What value could I get from such an initiative?

Value You Could Expect

If you are pursuing a greater capability from alliancing, or an Alliance Excellence Matrix equivalent, you potentially could reap many of the same benefits mentioned earlier. A key benefit is that the development of the information in the Alliance Excellence Matrix or equivalent demands a proactive, thoughtful planned approach to all alliance activities. The reward from this approach alone justifies the costs of the pursuit. Furthermore, additional value to that already stated earlier may be realized by adapting the Alliance Excellence Matrix or equivalent to other uses. For example:

• Client satisfaction evaluation

• Establishment and measurement of performance

• Criteria for organizational option evaluation and selection

• Approaches to strategic, tactical, and operational planning

• Leadership selection

• Procedural evaluation

• Issue Resolution

• And the list goes on.

In short, the value you could expect is only limited by your imagination. Hopefully, from having this quick overview of the Alliance Excellence Matrix, that has captured our imagination, you have a greater sense of the possibilities that exist, and the potential that has been (and still can be) realized.

Summary and Conclusion

This paper has presented a high level overview of a successful undertaking by a corporation and university alliance to capitalize on the company's knowledge and experience in alliancing. The paper presented an overview on the mechanism to do so—the Alliance Excellence Matrix. It also spoke briefly of the alliance for making it possible, and the value that has been gained to date, as well as the future expected value.

Success is not a chance event. It is the result of very hard work applied to a “fit-for-purpose” plan developed jointly by the committed partners of the alliance. The Alliance Excellence Matrix described in this paper has made the hard work easier, as well as helping make the partners work smarter. In this regard, its success has only just begun.

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 or any listed author.

Proceedings of the Project Management Institute Annual Seminars & Symposium
September 7–16, 2000 • Houston, Texas, USA

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