Ukraine crisis makes managing the bottlenecks in infrastructure sector highly urgent
The starting point of this blog series is that the bottleneck for societal challenges such as the energy transition, climate adaptation and the Dutch Replacement & Renovation Task (V&R) lies in the infrastructure sector. Our objective is that effective solutions become better known and will be adopted on a broader basis. The war in Ukraine and Europe’s dependence on Russian oil and gas make this objective highly urgent! Europe must be able to meet its own energy needs. The energy transition, climate adaptation and the V&R task compete for the limited capacity of the infrastructure sector. In previous blogs we described how projects can be carried out >20% faster. And that´s just a start.
In practice, clients, contractors and installation companies do not run just one project of course, but portfolios of projects or project programs. There, a second bottleneck shows up. This can be well managed and so you can further increase the output of your project organisation.
Maxims from the prevailing paradigm have had their day
To manage the bottleneck right is like a system intervention that requires a paradigm shift or change of perspective. If you happen to play management bullshit bingo, you were able to write down four bullshit words in the preceding sentence. We agree with management bullshit bingo players that consultants use too many hollow phrases and empty words without meaning.
In response, you could stop thinking and do whatever you like. We however address those who choose to think things through. Management is not a trivial activity. Management bullshit comes at the expense of results and trust. The decisive criterion of whether management concepts have meaning is: does it work in practice? (Which is something else as whether managers work like this in practice.) We therefore always refer to practical cases that show that applications of the FLOW-approach work *.
Back to the change of perspective and the paradigm shift. Some maxims from the prevailing paradigm that we, from a FLOW perspective, see critically are the following:
- If all employees are busy, the organisation achieves its highest possible level of productivity (employee level);
- If we run as many projects as possible in parallel, the organisation achieves its highest possible level of productivity (project level).
These rules sound like eternal truths, but are they? Below we show that if it were up to us, these “eternal truths” have had their day because they do not work in practice.
Well-thought-out maxims increase FLOW
When you go by the maxim that all people should be productive, then you will tend to run more projects than the organisation can handle. Also, you probably won’t waste too much time figuring out which task has priority. You just trust your intuition. As long as everyone is busy, everything is okay. And you run strategic projects in the fast lane so that at least these are delivered on time.
In reality, a lot of time is wasted by multitasking and reworking as a result of faults people make when they work on too many projects at the same time. It’s also amazing how much time is lost when tasks and priorities aren’t aligned. You can imagine that if someone is working on a low-priority task while his/her task on the critical chain * has priority, the delivery of the project will inevitably delay. A delay on the critical chain, by necessity, cannot be undone. If you like to learn more about this, please request a simulation with which we will demonstrate how this works. This by the way provides you with an interesting topic for a Strategy Day or strategy team meeting.
From the above, it follows that the productivity of a project organisation is not a function of the productivity of individual employees, but of the lead time (speed) of projects. Maxim 1 in the FLOW paradigm therefore reads:
- The productivity of a project organisation is a function of the speed at which projects are executed.
You can take a certain overcapacity for granted. This is even necessary, to make sure that the lead times are as short as possible.
Talking about capacity, by necessity one function group is the limiting factor or the bottleneck in the number of projects an organisation can run at the same time. Often key experts. In installation companies for example the system architects often are the bottleneck. They translate functional requirements into system requirements and design the architecture of a system. Engineers do all the detailed design. The expertise of the system architects is asked for again in the integration phase at the end where systems are tied together.
You can identify the bottleneck or limiting factor in your project portfolio by identifying where projects are slowing down in execution.
In the city of Amsterdam, the bottleneck seems to be what is called “conditioning”. In the Herstelprogramma Bruggen en Kademuren (the bridges and quays repair program), various experts need to find out which trees can be saved, where houseboats can be temporarily located, where bodies of water can be moved during the period that a bridge or quay wall is being replaced, and also which traffic closures the city can absorb. (We’ll come back to this in a future blog.)
The question always is how to manage the bottleneck in the best possible way. The assumptions of the old paradigm lead to things you do not want. When the bottleneck-function-group has to divide its attention over too many projects, it will lose time switching between projects, trying to come to grips, making faults as its attention is diverted too much, doing rework and making ad hoc decisions that have to be revised later. This slows down the flow of projects very significantly. Sometimes even until everything is at a standstill. Managing the bottleneck well means that, by analogy with the straw in the bottleneck (see previous blogs), you make the bottleneck function group as effective as possible. You achieve this, for example, by freeing the bottleneck-function-group from work that can be done by others and also by staggering their tasks in projects in such a way that they have to switch between projects as little as possible. Maxim 2 in the FLOW paradigm therefore reads:
- Start work on new projects only when the capacity of the bottleneck function group allows for it.
Maxims 1 and 2 in the FLOW paradigm reinforce each other. The faster projects are completed, the sooner people from the bottleneck function group are available for new projects. We are making progress.
A FLOW project organisation with only fast lanes
The practice of projects is a bit like commuting in urban areas. Often everything seems to stand still.
You sometimes encounter traffic lights at a motorway driveway that limits the influx of new cars. This solution does not work well because there are far too many ramps to our highways that cannot be managed in conjunction with each other. If that would be possible, our highways would look like this.
Fortunately, the comparison between commuting and your project organisation is not 100% true, as your project organisation only has one driveway. You or a colleague determines when the light for a new project goes green. If in the old paradigm you are in the habit of managing strategic projects in the fast lane, the FLOW approach offers you the chance to abolish all slow lanes and manage all projects in a fast lane.
You can simulate the effects of the FLOW rules via a simulation or serious game. Via a tactics call or an e-mail you can inform us about your question. We have a solution.
If you are working on a new strategy and do not want to change the existing organisation yet, we can create a digital twin of your project organisation. This will increase your understanding of why delays and other risks exist in your project organisation and of course what measures you can take to mitigate risks and to speed up project execution.
This is the fourth blog in our series in which we have described so far how projects can be carried out much faster. Infrastructure managers tell us that they endorse our problem analysis, but are still looking for their part of the solution. We will address that in our next blogs: the question of how projects can be brought to the market faster. This solution also works for companies, inside and outside the infrastructure sector, which want to manage innovation portfolios more effectively as well as efficiently.
If you have any questions or feedback on this and previous blogs, we look forward to receiving them. Questions and problems about how projects can be brought to market faster are particularly welcome.
Willem de Wit, Menno Graaf, Ian Heptinstall and Emmo Meijer
17 maart 2022
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