Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. The Project Owner: Hero… or Heel? By E. Dale Buob, President, MTB Project Management Professionals, Inc. INTRODUCTION N.M. Rothchild & Sons, one of North America’s largest investment banking companies, pointed out at last December’s Northwest Mining Association annual meeting that the mining industry, in general, has performed poorly in developing capital projects. In their presentation, Capital Cost Overruns: Increasing a Lender’s Exposure, Rothschild gave examples of this poor record and discussed the impacts on the banking industry. There are obvious and not-so- obvious consequences for our performance. In addition to bank and loan related consequences, there are adverse impacts to share value, loss of shareholder and market confidence, and company profits are reduced, or perhaps even lost altogether. The Chairman of Newmont put it into proper perspective some years ago at a regularly scheduled production meeting when, referring to a recent project overrun in excess of $100 million, he pointed out that the overrun had just wiped out an entire year’s profit. Poof! Gone for good! It takes a lot of production improvements and operating cost reductions to replace that kind of money! And that statement acknowledged only the direct capital cost overrun – not any peripheral impacts caused by delayed completion. Before I get into ways in which we can hopefully avoid such unpleasantries, I would like to share a couple of personal anecdotes to demonstrate how I learned some professional performance altering lessons – the hard way. Learning Experiences Lesson One In 1985, Newmont Gold Corporation sent me to Australia to triple the throughput of the Telfer mill and to change the process from CCD/Merrill Crowe to CIL/Electrowinning. At a management committee meeting several months before scheduled completion, I gave the Newmont and BHP Management Committee members what I was convinced would be the first and final bad news regarding cost and schedule. To my surprise, they accepted it well. Two months later I gave them worse cost and schedule information, which they did not appear to believe. And I had to do the same thing again two months later. Any of you who have had this unpleasant experience know that trying to forecast an out-of-control project is like trying to stop a large snowball rolling down a hill – it just gets bigger as it rolls. I had lost my credibility. I was a heel. To add insult to injury, when the project was finally over, Newmont’s vice president of operations asked me, “where did we go wrong?” Of course, what was abundantly clear to me was that he was really asking, “where did YOU go wrong?” And just to drive that point home, he had me analyze the project for the next three months to find an answer to that question. Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. Believe me when I tell you that I know the answer. Any of you who have ever had to do this can appreciate the lengths I will go to in order to avoid doing this ever again. Thus, Lesson One is: Unless you are able to blame someone else (engineering firms, consultants, and contractors have been the most frequent and successful targets over the years) it is you who will most likely shoulder the blame if you are responsible for a project and you overrun the budget or do not complete it on time. You will be a heel. You may be an unemployed heel. Lesson Two My second lesson was delivered by my boss, a very wise man who served as Vice President of Engineering at Newmont until 1988. I do not recall the incident that precipitated his question, but he asked me: “Did you do absolutely everything in your power to prevent this <something bad> from happening?” I immediately replied, “Yes I did.” he didn’t respond for probably 15-20 seconds and then asked me exactly the same question again. Again I replied, “Yes.” And I began to wonder if he was hard of hearing or becoming senile. (I was in my early thirties at the time, thought I knew a lot more than I did, and was frequently impatient regarding my predominantly older, more senior colleagues’ reluctance to make what I considered to be obvious decisions.) This time it was probably more like 30 seconds before he looked at me and again asked the same exact question. Uh Oh! Alarm bells were going off in my head as I began to suspect he wasn’t hard of hearing or senile and started fearing for my job. Then, bingo, I got it and Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. answered, “No. I guess I wasn’t smart enough to think of the actions that would have prevented this from happening.” Thus, Lesson Two is: The Owner’s Project Manager (and by extension the Owner’s management organization) is ultimately responsible for every aspect of a completed capital project. It is a daunting responsibility. If results do not match or exceed expectations, the Owner has no place else to look but in the mirror. Failed projects mean the Owner failed to fulfill one or more of its critical responsibilities. Wheel of Misfortune Lesson Two, above, brings us to a key observation: Many Owners are incredibly adept at finding someone to blame. I jokingly refer to it as the “Wheel of Misfortune.” Frequently, a particular consultant, vendor, or contractor receives the blame for a disappointing project. This consultant, vendor, or contractor is then barred from participation on future projects. This is a repetitive process that moves along in a kind of circle until all of the prospective providers have been blamed. Finally, the circle moves far enough along to a point where the sins of the initial “villain” have been forgiven or forgotten and that company or individual is again selected to provide services. Enough reminiscing. What do you need to do to develop a profitable project? DEVELOPING PROFITABLE PROJECTS We will determine how to develop a profitable project by examining the following topics: 1. Understanding Project Failure 2. Appreciating the Importance of the Project Development Cycle 3. Confirming the Owner’s Critical Role: Organization and Responsibilities 4. Summary: Suggestions Understanding Project Failure First, let’s define what is meant by failure. The title of our session does not mention failure; instead it refers to “profitable projects,” which implies success. Perhaps we more correctly should have used the term “successful projects.” Ending up with a profitable project is a lot less arduous than avoiding a project failure. Failure stems from a perceived or real variance between results and expectations. While a project might still be profitable (albeit not as profitable as desired), Owner’s upper management, the lender(s), shareholders, regulators, the public, or the investment community may judge the project a failure because it: a) cost more than promised; b) was not completed on time, thereby delaying cash flow for debt repayment or dividend payment; c) was not completed as promised regarding environmental, safety, or community issues; d) was perceived to have been out of control at any time; or e) does not perform or produce as planned. Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. Project failure occurs for many reasons. In analyzing any one failed project, a number of factors will likely be present in varying degrees, and any two analysts would likely disagree about the relative extent of each factor’s contribution to the end result. Nonetheless, some factors occur so frequently and have such huge impacts that they are easily identified. They are: 1. Inadequate planning 2. Excessive changes 3. Inadequate resources 4. Funding shortfalls 5. Poor Owner management practices You will see from the following discussion of each of these that they are actually interwoven and interdependent. Inadequate Planning Planning is the foundation upon which the entire project, and the relationships within the project, are built. The measure of planning success is how well it anticipates problems and provides for them. In the planning phase, project management looks ahead at all times to the long-range consequences of current decisions. In general, planning is not applied rigorously enough, consistently enough, or early enough in many projects. Frequent pitfalls of inadequate planning are: 1. Being forced into unrealistic deadlines. 2. Not defining the scope of the project clearly at the beginning of the project. 3. Not establishing an adequate control mechanism to track and monitor the project. 4. Deserting control mechanisms and managing the project by crisis. 5. Committing to arbitrary dates with no real basis for setting those dates. 6. Developing information out of sequence or executing the project without adequate information. The two pyramids on the next page represent two styles and levels of developing project information. The pyramid on the left results from developing complete information in a logical sequence: each information block is dependent on the information developed during the preceding step. The predictable result of action in accordance with plan and projections is the product of a firm foundation. The inverted pyramid on the right (or perhaps it should be more correctly identified as a golf tee) is the product of taking shortcuts to save time, choosing not to develop the required amount of information, or not recognizing the information required. As there is no stable foundation, there can be no predictable result, and problems are inevitable. Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. Project Trouble-free/profitable Development operation in accordance Building Out of Sequence Development, or with plans and projections Blocks Activities Omitted to Save Time Construction Procurement Engineering/Design Mine Design/Mine Planning Environmental Metallurgy Operation built on Geology and Mineralogy inadequate foundation - problems are inevitable. Excessive Changes Change is a major cause of project failure. In addition to the obvious cost and schedule impacts, large or numerous changes can result in a project losing its direction or its participants’ morale. Unnecessary and harmful change can occur because: 1. Initial project planning was not complete or thorough enough. 2. The Owner’s management fails to involve other areas of the Owner’s organization (i.e. operations and maintenance) during scope definition, and then fails to contain these “Owner’s preference or wish list” changes later in the project. Changes can be constructive by reducing the cost or schedule; or by improving the performance of a process facility. However, the timing of these changes is critical as shown in the chart on the following page. This chart points out that opportunities for constructive, value- added change occur early in the project life cycle, and that the cost to change is relatively low. The opportunity to add value drops sharply during the execution stage, however, as the cost to make changes rises sharply. Clearly, it is best to minimize the need to make changes later in any project. Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. Impact of Change Total Project Life Cycle Planning Phases Execution Phase Conceptual, Prefeasibility & Feasibility Engineering Construction O P P C O O Opportunity Intervention S R T T (Constructive) (Destructive) U N I I N TD C E R YC HIGH E R Opportunity to Add Value RISK A E S A I S N I G N G Cost to Change ADDING VALUE vs COST TO CHANGE TIME Inadequate Resources Although the need for proper project management is generally recognized to some extent during engineering and construction, it is frequently underutilized during the most important periods of a project: the planning and scoping phases. Generally speaking, experienced resources are often not applied early enough or consistently enough throughout the project development cycle. Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. Funding Shortfalls Overly optimistic funding projections can be deadly. Frequently, the original funding projections might have been adequate had cost and schedule been managed properly by the Owner from initial planning through project completion. Funding shortfalls result in: 1. Uncompleted projects. 2. Projects that are “cheapened up” at the back end and look and perform accordingly. 3. Accounting “slights-of-hand” that shift money between capital and expense budgets. 4. Surprise equity contributions required from shareholders. 5. Additional funding on highly unfavorable terms. Poor Owner Management Practices The Owner’s management and project management team are the most critical components of a project. The project management team is responsible for controlling the project, maintaining discipline and focus, and providing sound and inspiring leadership at all times. Some of the major ways Owners fail to do this are: 1. Assigning a project manager or project team lacking the relevant experience. 2. Failing to have a person in charge of the project who has the required responsibility, accountability, and authority. 3. Assigning project team members who are not dedicated to the project, or borrowing team members to complete other company tasks. 4. Lack of constructive support and involvement by upper management. 5. Over control or involvement of upper management that undermines the role of the project manager, his authority and effectiveness; trying to be the project manager instead of the sponsor or facilitator. 6. Allowing changes of scope to occur without first determining their impact to the schedule, budget, and resources of the project. 7. Establishment by upper-level management of arbitrary schedules or budgets that have no real basis. It is not a coincidence that I ended the discussion of “Understanding Project Failure” with “Poor Owner Management Practices.” At the start of the discussion about major reasons for project failure, I stated that you would likely see that these factors are interwoven and interdependent. I will go one step further from that now: I strongly believe that each and every one of these factors is well within the Owner’s control. From my experience, particularly my “professional performance altering lesson number two” that I offered earlier, I have come to see clearly that this responsibility rests squarely with the project Owner. What can an Owner do to execute this awesome responsibility in a manner likely to ensure success? Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. APPRECIATING THE IMPORTANCE OF THE PROJECT DEVELOPMENT CYCLE As an Owner, when you find yourself with encouraging results from a number of coreholes, getting from where you are to a financed, constructed, and profitably operated facility can seem overwhelming. For many Owners who rarely develop new properties, it could easily be compared to driving from one location to another, distant location without a roadmap, directions, or any helpful signs. Whenever I become involved in a new project, whether at the beginning or at some later date, I have always found it helpful to determine where the project is in the Project Development Cycle. Doing so helps me rationalize what has been done to date, as well as determine what needs to be done to advance the project. A typical Project Development Cycle consists of the four development phases, interrupted by requisite decision points regarding whether or not to proceed to the next phase.The four development phases are: 1. Conceptual 2. Prefeasibility 3. Feasibility 4. Project Execution Project Development Cycle for a Medium-Sized Mining Project (Months) Development Phase 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Conceptual Prefeasibility Feasibility Project Financing Execution Notes: 1. = Decision Point 2. Duration of each phase is largely dependent on the amount of drilling to be conducted during that phase and environmental permitting activities. 3. Durations of phases can also be impacted by location and size of the project. Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. Anything as challenging as developing a new project is best handled by approaching it systematically. This isn't to say that all four development phases must be completed as shown; in some cases, it is perfectly acceptable to combine, for instance, the prefeasibility and feasibility phases. In doing so, an Owner must be extremely careful to still satisfy the objectives of each phase. To help understand the phased progression of development activities, each phase of the cycle will be described below in terms of who completes the work, relative cost, duration, and purpose. Conceptual The Conceptual Phase of a project is almost exclusively handled by the Owner's in-house staff. Cost is minimal, and the work could last from several days to several weeks. The purposes of this phase are generally to: 1. Evaluate whether or not it is beneficial to conduct additional drilling; 2. Develop a program and budget to complete additional drilling; and 3. Obtain management approval/funding to conduct the drilling program. Prefeasibility The Prefeasibility Phase is often executed by the Owner's in-house staff, but the Owner's efforts are frequently supplemented by specialty consultants for ore-reserve estimates, metallurgical testing, or environmental studies. Occasionally, depending on an Owner's resources, the Prefeasibility Phase is executed entirely by one or more third parties with the Owner's input and coordination. The cost to complete this phase of development ranges from tens of thousands of dollars to several hundred thousand dollars, depending on the extent of drilling required. Three to four months to complete this phase of evaluation is often all that is needed, but as with the cost, the duration is dependent on the amount of drilling required. The purposes of this development phase generally include: 1. Identify site-specific issues; 2. Examine the project for fatal flaws, including, in part, whether the ore body is likely to contain enough tonnage and grade to support economic development and whether it is metallurgically recoverable; 3. Provide the basis for initiating long-lead activities, such as environmental baseline studies, permitting, land acquisition, community relations, financing, and agreements with host governments; 4. Determine the scope and estimated cost to complete a feasibility study; 5. Obtain management approval and funding to proceed with the next phase of development, a Feasibility Study. Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. Feasibility The Feasibility Study is almost always completed by third-party consulting firms with input from the Owner. If the Owner will be seeking project financing, lenders prefer this "arms- length" independent evaluation of the project. Of course, exceptions do occur. Some large Owners have extensive in-house capability and choose to complete a Feasibility Study entirely with their own staffs. Lenders submit a document prepared exclusively by an Owner to a higher level of review. The other exception is if the Owner intends to finance the project from equity and has the resources to evaluate the project's feasibility internally. Feasibility Studies can range in cost from several hundred thousand to several million dollars. Durations to complete this phase can typically range from four to eight months. Cost and duration are significantly impacted by the amount of drilling required, project location, size, and complexity. The objectives of the feasibility development phase are to: 1. Define the scope of the project; 2. Estimate the project cost, typically to an accuracy level of plus or minus 15 percent; 3. Develop the execution plan and project schedule; 4. Complete a risk assessment; 5. Project the revenue stream; 6. Determine the overall economic viability of the project; 7. Provide final details for permitting; 8. Provide information for obtaining project financing; 9. Develop the organization and staffing requirements for the operating company; 10. Provide information for government and community relations; 11. Obtain management and shareholder approval to proceed with execution. Project Execution After all of the hard work and cautious evaluation, this is the phase we have all been waiting for. Designing, constructing, and commissioning a project requires tremendous effort and teamwork by the selected engineering firm, suppliers, construction contractors, specialty consultants, and the Owner. Depending on the size, location, and complexity of the project, cost can range from a few million to hundreds of millions of dollars and take from 12 to 24 months to complete. While the objectives of this phase would appear to be obvious, they are listed below nevertheless: 1. Ready the mine for production; 2. Establish and prepare the Owner's operating organization to operate the mine and process facilities; 3. Construct and commission the mine, process and ancillary facilities; complete all necessary infrastructure; 4. Obtain all permits and approvals required for operation; 5. Satisfy the lender's reporting requirements and completion criteria. Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. Why the Project Development Cycle is Critical I have spent so much time discussing The Project Development Cycle because it truly is extremely important. I believe that recognizing and properly working within this cycle framework is the number-one key to project success. Why is it so crucial to systematically advance a prospective project through several distinct phases, to use all of the discipline you can muster to faithfully satisfy the objectives associated with each phase, and to honor the decision points separating each phase from the next? Risk Reduction Simply put, we advance a prospective project through a risk-reduction exercise. At any particular decision point, an Owner can conclude that the risk level either justifies the expenditure required to complete the next phase or it does not. The following chart illustrates this point. Project Risk Reduction as a Function of Project Development Activities Project Development Phases Start Prefeasibility Study (3 Mos.) Feasibility Study (5 mos.) Engineering/Procurement Construction 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 30% 30% Risk Level 20% Expenditure Level 20% 15% 10% 10% 10% 7% 2% 0% 0% Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. The risk is greatest at the beginning of a project when very little is known. The only way to reduce risk and uncertainty is by developing information. Fortunately, as you can see from this graph, the largest amount of risk reduction occurs early in the project, during the planning and evaluation phases, for relatively low levels of expenditure. Several absolutely critical points must be made here: 1. Opportunities for cost savings and reducing risk are greatest during the planning and evaluation steps of a project; the opportunities decrease as the project advances to completion. The Owner should involve planning and project management personnel who have extensive experience in the type of project proposed (technical and location- related experience) during this early, critical period. 2. The Owner must be disciplined and force itself to honestly and completely evaluate the project at each decision point. The Owner must avoid the tendency to rush to conclusions; the evaluation/investigation process must be allowed to generate the answers. 3. The Owner must not become emotionally attached to a project and lose its objectivity. In other words, the Owner must not need or want a particular project too much. 4. The Owner must recognize and honor the need to develop information in the proper sequence and to the proper level to form valid conclusions. This last point about information is so important that we will refer again to the stable pyramid that we discussed earlier. You cannot put a roof on a house until you first have walls, which require a floor, which must be set on a stable foundation, etc. In our business, this means that first we have to do the geology, then the mineralogy, then the metallurgy, then the mine design, and finally the plant design. Shortcuts or omissions result in an unstable foundation, false conclusions, and disappointing results. Project Trouble-free/profitable Development operation in accordance with plans and projections Building Blocks Construction Procurement Engineering/Design Mine Design/Mine Planning Environmental Metallurgy Geology and Mineralogy Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. CONFIRMING THE OWNER'S CRITICAL ROLE I have stated before that the Owner's management and project management team are the most critical components of a project. My reasons for this are: 1. The Owner is usually the only project participant that is involved from the early evaluation phases through project completion. 2. The Owner selects and oversees the remaining project participants. 3. The Owner determines the project scope and has final approval responsibility for the budget and schedule. 4. The Owner often has established relationships and knowledge of local conditions in the project area. 5. The Owner has responsibility for the complete scope of the project, often retaining sole responsibility for items under "Owner's Costs." 6. The Owner has a vested interest in completing the project successfully and, as such, is more purely motivated than other project participants. Responsibilities Having stated the above, just what are the Owner's responsibilities? They are: 1. Providing sound and inspiring leadership. 2. Scoping the project and maintaining control of scope. 3. Making timely decisions. 4. Showing discipline and focusing on the original project plan. 5. Organizing and staffing the project with personnel who have extensive experience in the type of project proposed. Specifically, the Owner's project manager should have a broad knowledge of design and construction and a comprehensive perspective. The project manager will receive input from diverse sources, will be involved with large numbers of people, and will need to make a multitude of decisions. 6. Ensuring that decisions are based on adequate, correct information and that consequences of actions/decisions are understood beforehand. This frequently means questioning information or recommendations that are presented by engineers or consultants to ensure options have been identified and a sound decision can be made. Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. Project Development Team A representative project development team is shown below: Representative Project Development Team Owner's Corporate Management Owner's Project Management Team Specialty Consultants Vendors, Contractors Engineering, Procurement Feasibility Study • Environmental and Consultants for and Construction Contractor • Training Owner's Direct Management Contractor • Other Scope-of-Work Items Equipment and Construction Materials Vendors Contractors A Representative Owner's project management organization is shown below: Representative Owner's Project Management Organization Owner's Management Corporate Project Procurement Operations and Engineering Finance and Accounting and Logistics Manager Maintenance Support Services Project Construction Project Accountant Manager Engineer Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. Although the Owner’s project management team only consists of several dedicated individuals, the entire Owner's organization contributes specialized expertise and support at appropriate times throughout the project. Some Owners believe that the Owner's project management responsibilities can be fulfilled by: A. A project manager seconded from an engineering firm; B. Someone from the Owner's operation who does not have substantive, prior, relevant project management experience; C. One person, rather than a team. In reality, however, the correct answer is “D. None of the above," because project management is a unique profession requiring particular expertise and experience, as well as an understanding for and ability to apply specific management methodologies and techniques. If an Owner truly wants to take its responsibilities seriously and control the outcome of its project, it requires hard work and the efforts of more than a single individual. Successful projects result from knowledge and use of details. In order to make the correct decisions and get the best results from other project participants, you often must know as much as, or more than, they do. This takes time on a day-in, day-out basis. Cost Proper project management by the Owner usually costs from .75 percent to 2 percent of the total constructed cost of the project, depending on the size and complexity of the project. For example, Owner project management on a $200 million project might cost $1.5 million. The same management on a $20 million project might cost $400,000. The relationship between cost and size of the project is not linear because all projects, however small, require a certain level of management that is not dependent on the size of the project. Benefits In addition to properly planning and controlling the project, and increasing the chances of avoiding the unpleasantness associated with a project failure, cost savings ranging from 5 to 15 percent of the total project cost are possible through aggressive, competent management by the Owner. This is especially true when the proper level of management and planning are introduced early in the planning and evaluation phases and then continued consistently throughout the project's development. Northwest Mining Association, 1999 Annual Meeting Technical Session: Developing Profitable Projects: The Owner’s Critical Role Chaired by MTB Project Management Professionals, Inc. SUMMARY Suggestions for Success Some suggestions to help the Owner in this role are: 1. Approach project development systematically. Recognize the objectives of each phase, develop information completely and in the order required to permit valid decisions before proceeding to the next phase. 2. Apply qualified and adequate resources during the planning and evaluation phases of the project. Remember that the greatest opportunity for cost savings and positive project impacts occurs here. 3. Involve staff from other areas of the company, such as operations and maintenance, during early project scoping activities. Once the scope has been defined in detail, do not change the scope. 4. Understand and view the project as a whole; do not get mired in the parts. The Owner must be able to anticipate problems and identify the long-term consequences of its current actions or decisions. Developing a project is like driving on an unfamiliar, winding road in the Andes at night and in a driving rainstorm. If you want to arrive at your destination safely and at the appropriate time, it will help to have driven the road before, preferably multiple times. There is no substitute for knowing what is around the next bend. 5. Upper management must fulfill its role as a project sponsor or facilitator, not a project manager. Select a project manager and project management team that have extensive experience in developing the type of project considered. Give the project manager the responsibility, authority, and accountability required to complete the job, and provide whatever support is needed. 6. Allow the information development process to generate the proper answers. Do not rush to conclusions or arbitrarily dictate criteria or conditions. 7. Be objective. Do not become so attached to a project that you want it at any cost. Be prepared to walk away from it if it does not pass the test. 8. Assign the project manager at the beginning of the planning and evaluation phase. Doing so allows at least one person to understand what has already been done and why decisions have been made. Consistency, clarity, and steadiness of purpose, so essential to success, will be enhanced by the project manager’s familiarity with the project. 9. Details can make the difference between success and failure. Pay attention to details at all times. Unfortunately, a lot of information and/or recommendations provided by third parties are superficial. Treat information provided by others like an onion: question what you are given by peeling away a few layers to see if it is any good. The Bottom Line – Ultimate Responsibility Rests with the Owner Responsibility for every aspect of a completed project rests ultimately with the Owner. The Owner must understand its responsibilities and be accountable for its performance. The bottom line is that there is no one else to blame for project failure.
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