The Risk Management and Engineering (RBT) department of KIVI (Royal Institute of Engineers) studies high-profile events, analyses them and tries to find ways to better manage technical risks. Here is a description of a project where hidden agendas posed a serious risk to the project's success. How do you make hidden agendas visible?
By John van der Puil
At the recent KIVI-RBT symposium, Drewes Hielema presented his views on - as mentioned in the announcement - the influence of environmental factors on engineering projects. Drewes has had an eventful life. He worked in international contracting. Speciality: conversion of biomass and residual waste into environmentally friendly synthetic gases, heat and electricity. As a project manager, he built complex technical process plants worldwide in multicultural environments with people of diverse level, knowledge, character and experience. East Germany, Russia, Saudi Arabia, the Netherlands. Hielema is now doing doctoral research at the TUD.
Even with the first power point slide, the tone is set. "The project manager as Sole & Main Responsible throughout project realisation," it says. Note the use of capital letters. This immediately gives us pause for thought. Apparently, there are others who want to be co-responsible over the execution phase of a project, or at least influence the project manager's responsibility. The second slide makes it even more specific "The choice of which 'master' to choose, A Higher Loyalty". Soon it turns to ethics. The third slide concerns competing interests of all kinds of parties involved in a project. Interests are pursued in very different styles. But a project leader is surely not informed about the double agendas of those involved. Not every party's first objective is to realise the "iron triangle": to realise the project according to specification, including the agreed quality, within budget and within the agreed lead time. The corners of the triangle are: Specification, Budget, Lead time.
Building the flue gas cleaning plant at AVR ( N.V. Afvalverwerking Rijnmond). Drewes was the third project manager. Earlier, two colleagues had dropped out. They couldn't get to grips with the project, they couldn't manage it. Unexpected surprises popped up regularly, so that planned actions that should have taken place in the shorter term could not be carried out. Delays mounted. Insufficient leadership was attributed to the previous project managers. That was reason to bring in Drewes. Project management is like football. If things don't work out and the team keeps losing, you replace the coach expecting things to improve. Even if the club's leadership makes the fundamental mistakes themselves, they still resort to the remedy of another trainer. Strangely enough, it often works.
When Drewes took office, he encountered a situation where a system of flue gas cleaning had to be added to an existing waste incineration plant. Nobody at the AVR needed this RGR (Flue Gas Cleaning System), but the government had set the rules and so the system had to be there. At the time, the Incineration Directive '89 had just been adopted. The management had no need for it, while the management had no idea about it at all. That management at the time consisted of a group of ship's engineers with an adequate level of knowledge to make installations function flawlessly according to descriptions and procedures worked out beforehand by others. Punctual watch running, round the clock, faithful and disciplined.
But executing a project designed and funded by others, that is something else. The government provided 400 million guilders. The engineering firm designed, engineered, did procurement, project execution, construction supervision, commissioning and trial operation. But the client was basically not interested at all. It happens to you as a project manager, but changing is very difficult. Talking to those involved won't help.
It wasn't the only thing. There was something in the air that Drewes couldn't explain. The formal EPC contract was between the AVR and the Austrian main contractor with the engineering firm Tebodin, now Tebodin/Bilfinger, as the controlling technical entity. The Austrian main contractor often received objections about the design drawings and proposed changes. These sometimes had some merit, but Drewes noticed that it happened too often. And one day, one of the Austrians was not present at the site in the afternoon, nor was he to be found in the wooden offices. By five o'clock, Drewes asked the Austrians' project manager:
"Where were you?"
"I was with the management", was the reply.
"But what are you doing with the AVR management? You have nothing to do there. Only my boss and I report to the AVR".
"Well, that remains to be seen. The management is used to working well with my bosses," was the reply.
It could be an incident. But a month later, when Drewes does not approve an invoice of 12 million guilders from this Austrian firm, but first wants an explanation of the calculations of time spent, he gets a call that same afternoon from an authorised representative of ... the AVR management. Why did Drewes not have the confidence that this invoice would not be correct? Was the question.
When Drewes has told this story, you understand much better why he started with that opening slide: "The project manager as Sole & Main Responsible throughout project realisation". The project manager has the right to have invoices explained, no one - including the client - should interfere with that. If there is then later a threat to approve an invoice because otherwise "action would be taken against him", the suspicion has been raised. Then you understand the second slide. "The choice of which 'master' to choose. A Higher Loyalty". Giving in to pressure would mean resignation. Drewes would talk about environmental factors beyond the project manager's control. In this case, there is a double agenda "somewhere". Here, those "environmental factors" get in the project manager's way.
What do you do in such circumstances?
Drewes answers himself. Great managers serve two masters, one organisational and one moral. In any project, you can influence a lot. These are the factors close to the project, such as leadership, resources, project management systems and communication. It is much more difficult, if not often impossible, to deal with factors that are not evident from the documents. These are external factors, which have to be faced. But one has to recognise them and keep an eye on them. In Drewes' view, the project manager should also openly discuss both the internal, as well as those external uninfluenced factors in his team. Every organisation needs to be aware of which factors are driving to achieve great success and where the possibilities end. These will be different for every project under different circumstances. Difficult situations are never identical. A good project manager makes compromises. But hidden self-interest clouds deliberation. "Integrity in management means being responsible, communicating clearly, keeping promises, knowing oneself."
How do you deal with this?
It is difficult to be transparent when you are threatened as a project manager as happened to Drewes. Should you now discuss this with your team? Drewes presented his problem to the company lawyer he trusted. He acted further in good conscience by ignoring the threat. After that, he was not threatened further. The project was completed well within budget.
John van der Puil
Board Risk Management and Technology Department
Programme Committee member
In a personal capacity
