ISQA 410 Project Management

1
ISQA 410 Project Management

• Chapter 12 Partnering Managing
  Inter-organizational Relations

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Managing Inter-organizational Relations

• Introduction to project partnering
• Pre-project activities
• Project implementation activities
• Project completion activities
• Why project partnering succeeds or fails
• Negotiating
• Managing customer relations

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Intro. To Project Partnering

• Increasingly rare to have significant project
  completed in-house
  
• Examples
• 9 states did not have resources to unify
  accounting of state agencies project teams
  formed to outsource S/W, H/W and accounting to
  firms
• Contracting out project work is the norm in
  construction industry multiple subcontractors
  
• Chunnel project - 250 organizations involved
• Partnering working with people from other
  organizations (external internal managing
  intra-organizational relationships)

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Intro. To Project Partnering

• Partnering
• Process for transforming contractual
  relationships into cohesive, collaborative teams
  that resolve issues/problems encountered in
  projects in a timely manner
• Began in the 80s in construction industry due
  to delays, overruns, rising litigation, limited
  ability to compete overseas
  
• Long-term commitment by 2 or more firms to
  achieve business objectives by maximizing
  effectiveness of each partner focus on a
  shared culture without organizational
  boundaries relationship based on trust,
  dedication too common goals understanding of
  each others expectation/values improved
  effectiveness/efficiency, continuous improvement
• State of mind philosophy respect, trust,
  collaboration key ingredients commitment to
  continuous improvement
  

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Intro. To Project Partnering

• Drivers organizational downsizing,
  concentration on core competencies, use of
  virtual organizations
  
• Advantages of Partnering
• Reduced administrative costs bidding
  selection reduced contract administration costs
  
• More efficient utilization of resources - focus
  on core business, avoid swings in project support
  costs
  
• Improved communication develop common
  language/perspective which reduces
  misunderstanding
  
• Improved innovation risks/rewards identified
  more openly and share more freely
  
• Improved performance learn from each others
  practices standards apply lessons learned
  more efficiently
  

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Intro. To Project Partnering

• Traditional Practices
• Suspicion/distrust
• Mis-alignment of goals
• Independent project teams
• Structured/siloed communication
• Single project contracts
• Limited objectivity
• Focus on procedures self-preservation vs. total
  optimization
  
• Duplication of systems
• Risk transference is dominant

• Key Partnering Practices
• Mutual trust
• Shared goals/objectives
• Joint project teams
• Open communication
• Long-term commitment
• Objective critique
• Access to each others resources
• Total co. involvement
• Integration of systems
• Shared risks/rewards is dominant strategy

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Pre-Project Activities Setting the Stage

• Selecting a Partner
• Track record technically but also as a partner
  (culture must be present)
  
• Interest expertise
• Senior management commitment
• Shallow inducements, half-hearted commitments,
  intimidation or power-based approaches lead to
  failure

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Pre-Project Activities Setting the Stage

• Team Building The PMs
• PM structure alignment critical
• Clear understanding of roles responsibilities
• Implementation plan for the partnering process
• Review mutual/shared objectives
• Training needs? teaming, collaboration,
  communication

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Pre-Project Activities Setting the Stage

• Team Building The Stakeholders
• Team structure and staffing building the we
• Team building exercises for all members
  external facilitation may be required or PMs can
  design lead effort
  
• 3-Step approach sets stage for implementation
• Ice-breaking rationale core teamwork, synergy,
  win/win constructive feedback
  
• Examine problems barriers for us, for them,
  recommended improvements define common
  objectives/goals for the project typically the
  result of different cultures, habits, standards,
  priorities
• Create project charter include agreements,
  common goals, procedures for partnering
  

10
Project Implementation

• Sustaining Collaborative Relationships
• Co-location can be critical
• Emphasis on having mechanisms in place to deal
  with setbacks/problems
  
• Fanatical support of senior management
  obsession with the process vs. results
  
• Problem resolution
• Continuous improvement
• Joint evaluation
• Persistent visible leadership

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Project Implementation

• Sustaining Collaborative Relationships
• Problem resolution lowest level preferable
  24-hour resolution before escalation no
  delaying
  
• Continuous improvement eliminate waste, pursue
  joint cost savings, risk/reward sharing (50/50),
  fast-track reviews to avoid setbacks
  
• Joint Evaluation regular reviews to evaluate
  process, develop specific effectiveness criteria,
  set specific improvement activities (projectize)
  
• Communication between owner/contractor personnel
• Top management support of partnering process
• Dealing with problems, issues or concerns
• Cooperation between owner and contractor
  personnel
  
• Response to issues/problems becomes personnel
• Persistent leadership walk the talk,
  consistent emphasis on collaboration for problem
  solving, reward initial disagreements, reward
  adhering to principles of problem-solving,
  everyone celebrates in successes

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Partnering Success Factors

• Senior management (owner/contractor)
• Compelling business reasons must be present to
  make partnering work
  
• Good intentions not enough approach cant be ad
  hoc
  
• Commitment and ongoing oversight
• Focus on fixing problems, not on why it wont
  work
  
• Minor problems are escalated, not fixed at the
  lowest level
  
• Senior management does not return problem to
  first level
  
• Problems (whether escalate or not) are not fixed
  within time limits
  
• Must send consistent and unambiguous signals that
  people are empowered and encourage to make
  decisions at the lowest possible level

13
Partnering Success Factors

• Failure to deal with cultural differences
• Management style, operating procedure,
  terminology, perspectives culture shock
  frustrates development of rapport
  
• Must build a common culture based on successful
  project completion team-building is critical to
  getting off on the the right foot
  
• Selection/placement of key positions with savvy
  professionals who can forge relationships with
  personnel who do not necessarily share the same
  priorities, time orientation, work habits
• Example BPA and Duke/EDS

14
Partnering Success Factors

• Lack of a formal evaluation procedure
• Fewer that 20 of partnering projects have
  formal, effective procedure/criteria for
  evaluating the partnering process
  
• Consequences
• Problems/deterioration cant be recognized in
  time to correct
  
• Permit problems to snowball
• Lack of resolution becomes a standard practice
• Report card must measure team performance,
  encourage team accountability, identify problems
  at the operating level, and measure whether
  relationship is improving or degenerating (award
  fee contracts not the same as formal partnering
  evaluation)
• Lip service to continuous improvement
  expectations verbalized but no process,
  incentives or procedures established to enable CI

15
Negotiating

• Perhaps the critical success factor to
  partnering
  
• MUST be win/win cannot be a contest
• Partners must be allies at worst, a temporary
  alliance
  
• Success of project must bind both sides must be
  committed, cannot permit negotiations to
  breakdown
  
• Recognition that all parties must continue to
  work together cannot cut your nose off to
  spite your face (e.g., long-term relationship
  cannot be sacrificed for short-term advantages)
  approach to problems must be proactive,
  solution-based, the benefit both parties.

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Negotiating

• Critical Success Factors
• Separate people form the problem
• Be hard on the problem, soft on the people
• Seek first to understand, then be understood
  empathize first listen, ask question, reflect
  first
  
• Defining, re-direct re-framing avoid
  personalizing and approaching it as a contest
  
• Focus on shared interests (objectives), not
  positions
  
• What are you trying to achieve separate ego from
  objectives understand consequences (whys)
  
• Invent options for mutual gain (collaborative
  brainstorming separate inventing from deciding)
  requires listening open communication

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Negotiating

• Critical Success Factors
• Use objective criteria (when possible)
• External criteria/standards can be useful in
  finding common ground to address problems
  
• Dealing with unreasonable people
• Position focused neither accept/reject,
  consider it as one option (of many) and try to
  understand the interests behind it
  
• Invite suggestions, criticisms for your ideas
  ask why its a bad idea to understand interests
  
• Ask questions vs. making statements permit
  interests to surface
  
• Silence forces other person to answer the
  question or identify other alternatives
  
• BATNA (best alternative to a negotiated
  agreement) benchmark for determining whether to
  accept an agreement
  
• Reflects dependency upon other party (one vs.
  many vendors)

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Managing Customer Relations

• Bottom line customer satisfaction
• Reputation long-term success
• 81 ratio between customer satisfaction and
  dissatisfaction
  
• Met-Expectation Model
• Ratio between perceived performance and expected
  performance
  
• Ratio
• Ratio 1 satisfied
• Ratio 1 very satisfaction
• Given competing definitions of success, better to
  strive for ratio of 1.05 vs. 1.5
  
• Definitions of satisfied are multi-layered and
  include multiple variables
  
• Satisfaction begins at inception runs
  throughout
  
• Speak with one voice speak the customers
  language