FROM CAPITAL PROJECT CRISIS TO AUSSIE ALLIANCE SUCCESS!

What To Do When a Project’s “No-Blame”, “Win-Win” Culture Fails

THE CHALLENGE

A multinational energy company set out to establish Australia’s first-ever multi-stakeholder Alliance for designing and building a new offshore oil platform.

Unlike prior major platform projects, this Alliance had a highly ambitious plan to construct the platform base and support columns from concrete to accommodate oil storage.
It was a cutting-edge design that would require towing the structure from the construction facility to an oil field site thousands of kilometers at sea.

Taking a highly collaborative approach to the capital project, Alliance leaders carefully followed the lead of other Alliances around the world.

They held partnering sessions where they agreed to share the risks and rewards. They also committed to conducting themselves with full transparency as they worked side-by-side to address every obstacle in a no-blame, “win-win” culture.

And with millions of dollars at stake every day, this no-blame, “win-win” culture was critical for building confidence throughout the Alliance–a confidence that worked like a charm until three months into the project when the Alliance ran into something much worse than an obstacle.

During its historic move across the sea, the platform suffered a catastrophic breach in the casting basin retaining wall, resulting in the loss of the existing casting work.

In an instant, the project went from on track to three months behind schedule. And with millions of dollars at stake every day of the delay, to call this a catastrophic setback is not hyperbole.

In fact, the magnitude of the potential fallout prompted reactions from Alliance partners that flew in face of the principles they’d agreed on. And as Partners started blaming other Partners for the disaster, their lawyers furiously reviewed contracts, preparing to seek damages.

With the entire future of this historic project in jeopardy, a senior executive from the energy company made it his mission to salvage the operation by convincing the Partners to rely on their Alliance principles instead of reverting to traditional behaviors under such dire circumstances.

There are three constants in life...
change, choice, and principles.

- Stephen Covey

THE WORK

JMW was engaged by the Alliance to support the delivery of the project. Facing an Alliance at what seemed to be an irreversible impasse, JMW quickly realized a powerful intervention was needed to prevent the Alliance from disintegrating.

Through a series of facilitated discussions and leadership development sessions, the Alliance leaders came around to a collective agreement that they would set contracts aside and return to the “win-win” culture they had agreed to at the outset.

With this all-important commitment in place, the work with JMW began in earnest, expanding to include development sessions with middle- and lower-level managers as well as one-on-one coaching of leaders integral to the effort.

Then, with the deadline for delivery still in jeopardy, Partners on the construction side of the project began to advocate for innovations that could accelerate progress.

For example, one construction manager introduced the notion of commissioning the concrete base of the structure one floor at a time, the way it is typically done with structures on land.

Such ideas were initially rejected by the oil and gas Alliance partners, who cited the manager’s inexperience with offshore oil and gas projects. But after facilitated conversations adhering to their Alliance principles, Partners who initially resisted innovations like these and others, were able to look beyond industry bias and agree that the proposals had merit.

THE RESULTS

In spite of the challenges presented in the wake of such a catastrophic event, the Alliance not only recovered from a daunting setback early on, but proceeded to innovate and accelerate their progress, saving both time and money in ways that could not have been predicted at the start of the work.

Ultimately, the Alliance was able to deliver the project three months ahead of schedule and $50 million under budget. By coming together through a joint decision, the Alliance Partners not only overcame a major setback, they turned it into a watershed moment that fostered collaboration and increased productivity beyond what was thought possible.

In the words of the energy company’s senior executive who took a stand for the alliance and its principles:

“The alliance didn’t start when we signed all the contracts and made the agreements. The alliance actually started when we made the decision to really work together to overcome that initial setback. From that point forward, the culture of the project changed completely—to truly match up with our aspirations to work collaboratively—and JMW really guided us through that defining moment.”

In addition to the immediate rewards for project completion by the Alliance Partners, the project’s success established a standard for the industry, offering a proven example of an Australian alliance succeeding beyond all expectations.

Forty Years of Transforming Major Capital Project Performance

JMW is a global transformation consultancy that empowers leaders to shape the future through time-tested methodologies that have accelerated the performance of more than 75 major projects around the world.

And while the majority of major projects run over budget, have significant delays, or both…it doesn’t have to be that way.

Research shows that 65% of missed targets on major projects originate from people, organization, and governance issues that can easily be avoided through JMW’s proprietary approach to performance.

That approach has enabled JMW to provide over 40 years of high-value support for major project leaders confronting human capital issues that can hinder the reliable delivery of on-target performance.

For example, JMW has had the privilege to help leaders of major projects…

Beat all reasonable expectations: The project teams for a $600M offshore oil platform with a 20-year history of failed development attempts aligned on results to commit to, and delivered the project six months ahead of schedule at 80% of their agreed budget
Build integrated project teams that perform: Owners and contractors came together and worked collaboratively toward a common vision to deliver a $800M major intercity road four months ahead of schedule, with nearly $40M in savings
Turn around underperforming projects: Two misaligned contractors on a $5B processing facility project that was nearly three months behind came together with shared commitments to overcome obstacles, and were able to meet all key deliverable deadlines and fully recover the timeline
Advance key stakeholder support: After an upgrade to a major metropolitan water system was threatened by community resistance, the project teams worked collaboratively with key stakeholders to gain support and deliver on time, 22% under budget

These are just a small sample of the results JMW has delivered on over 75 major projects over the last 40 years. And with...

A Proven Team Unparalleled in its Energy, Authenticity and Listening, Our Stance for Our Clients’ Success Drives Everything We Do…

JMW is Committed to Transforming Major Project Performance and Empowering Leaders to Shape the Future for Many Years to Come.

A member of our team will be in touch to set up an introductory meeting to discuss our proven process for transforming major projects. We look forward to speaking with you as schedules permit.