7 Management Traps to Avoid

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e-Builder.net 800.580.9322 info@e-builder.net v02/08 WHITE PAPER 2 A project can be successful in budget, schedule, and quality, yet fail to align with an organization's strategic plans. A project that piles up budget overruns AND fails to support strategic plans is a failure with a lasting impact. We have identified seven management traps that often catch up with project teams on failed capital projects. These traps can be substantially mitigated early in the development process. 7 Management Traps to Avoid Trap 2 : Program Budgets A lack of "risk-informed" program budgets leads to project staff overlooking conditions that are not intrinsic to a specific project or project type, causing unwelcome surprises during the design stage or during construction. All too often, owners fail to include adequate funds to cover risk or the cost of risk mitigation. Scope creep and cost overruns occur late in the program, when "missed" items arise. Risk conditions are not difficult to detect during a risk assessment, and a risk analysis should include more than just design and construction operations. It should include a review of an organization's bureaucratic nature, the complexity of required permits and approvals, the reputation of authorities having jurisdiction (AHJ's), the owner's history of making quick decisions (or not), and the availability of local contractors, subcontractors, and trades, etc. Accounting for those risks during the strategic-planning phase allows for proper budgeting and management. A cost-tracking mechanism should be implemented to track "risk" dollars day-to-day. Trap 1 : Project Scope The full scope of the project is not clearly defined and documented, including the expected financial impact on business operations and strategic goals. Design teams are forced to develop their own parameters, and with no formal guidance, they may or may not align with the organization's financial and strategic business plans. Design becomes a hit-or-miss proposition. When design teams aren't provided with clearly defined goals and supporting data, it causes them to ask stakeholders what they want vs. designing to what the data indicate they need. Operations staff often provide their "wish list," mixed in with the data, and this approach almost always leads to an over-designed, out-of-scope project. When and if it's recognized by leadership that the project's scope is out of bounds, the process of readjusting the scope can be painful. 1 2

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