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6 DOE Project Management Culture INTRODUCTION An organization's culture is not the list of values developed at an offsite meeting those are ideals. Culture is how the organization operates. It is the core values and norms of behavior that drive the organization's actions and guide how employees think, act, and feel. The degree to which a large organization integrates its subcultures into a dominant overarching culture can vary widely. It is probably undesirable and unrealistic to try to homogenize the culture of an organization as large and diverse as DOE. However, to be successful in managing large projects, an organization must have a core set of values, principles, systems, and procedures that cut across subcultures (Hagberg and Heifetz, 2000~. (cultural strength refers to the dominance or preeminence of certain aspects of the culture in affecting everything that happens in an organization. It also reflects the intensity with which cultural values are held and clung to.... Cultural congruence refers to the extent to which the culture reflected in one part of the organization is similar to and consistent with the culture reflected in another part of the organization.... [O]ther things being equal, the greater the total degree of congruence or fit between the various components [of an organi- zation], the more effective will be organizational behavior at multiple levels. (NRC, 1997, p. 74) 33

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34 PROGRESS IN IMPROVING PROJECT MANAGEMENT AT THE DOE LEADERSHIP DOE leaders have implemented several policies to help define its project management culture over the past 12 years e.g., O 4700 Project Management System, O 430.1A Life Cycle Asset Management (LCAM), and O 413.3 Program and Project Management for the Acquisition of Capital Assets. DOE Order O 413.3 defines current policies and procedures; however, the committee has witnessed several variations of project management procedures some strictly following O 413.3 and others utilizing some but not all of the procedures mandated by O 413.3. Full-time, experienced project managers manage some projects, while line personnel who function as part-time project managers are managing others. Some projects utilize strict project cost controls, while others use less rigorous cost control programs. DOE has been trying to standardize its project management procedures (viz., its draft PPM for implementing O 413.3) in recent years; however, it will not achieve this goal unless senior management conveys a unified vision that effective project management is all-important, worth doing, and actively supported and expected by all senior managers throughout the department. The directives issued by the deputy secretary in 2001 and the chief financial officer in 2001 and 2002 have conveyed DOE's intent and the impor- tance of project management policies and procedures. The committee believes that there is now greater involvement of the under secretary and assistant secre- taries in project approvals. Implementation Key to achieving consistent implementation of policies and procedures is the existence of a DOE senior management group that is involved in the implemen- tation. Senior managers should believe that oversight of project management is their first and most important responsibility. They should understand the processes as well as be able to articulate why such processes are important. This does not mean that senior managers need to be expert in all phases of project management, but they should be able to easily discuss the elements of the program. Personnel in the field need to be shown how and why implementation of new project management procedures make it more likely that their project will be success- fully completed. Developing detailed reports and preparing answers to questions posed by senior managers improves project planning. Each time a project is rejected and resubmitted it should be better prepared to achieve success. The committee believes that reviews by the Office of Management and Budget Evalu- ation (OMBE) prior to Energy System Acquisition Advisory Board (ESAAB) reviews and critical decisions have helped with this process. Communication across the levels of an organization is not easy to accom- plish. Senior management needs to take advantage of each and every opportunity to explain and promote its policies, procedures, vision, and expectation of desired

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DOE PROJECT MANAGEMENT CULTURE 35 outcomes. Field organizations need to be convinced that DOE's senior manage- ment is united and that its course is unwavering. Uniformity of the message, as well as its repetition, is essential for the entire organization to accept the impor- tance of the message. Senior management is responsible for establishing a supervisory structure that has consistent views and values. If project management is important to senior managers, then it should be important throughout the organization. A senior manager who expresses views contrary to those of project management policy can partially paralyze efforts to institutionalize policies and procedures within DOE. The issuance of orders and memos from headquarters cannot by itself realign the thinking of the field offices. Senior management can accom- plish such realignment only by visiting the field offices repeatedly to deliver a consistent message. The committee recognizes that this requires the expenditure of a substantial share of the time of senior managers. To assure that this time is available, less pressing work must be delegated to others. Senior managers should avoid conveying mixed messages within the organization. If senior management has given top priority to implementing project management policies and procedures, then it should ensure that there are no competing priorities. Generally, some members of an organization are prone to comparing messages, looking for subtle differences from one day to the next. If such differences are identified they generate resistance within an organization to acceptance of any- thing new. While project management per se is not new, its current definitions and practices are different from previous definitions and practices, and these changes must be managed. Opportunities for Success One of the best opportunities for senior management to stress the importance of project management is during project review meetings. At these meetings senior managers should take an active role to demonstrate their interest. First, senior managers should be in attendance, indicating that these meetings are important and that they are willing to make time for them. Given the number of projects being managed within DOE, this in itself will be a major task for senior managers. Second, senior managers should demonstrate a commitment to project management professionalism by their own actions at DOE-wide strategic plan- ning levels. Third, senior management should take an active role in the meeting, asking questions and prompting the project managers to consider alternatives, possible risks, and actions that can be taken if the project exceeds its baseline schedule or cost. Fourth, senior managers should be prepared to give praise when appropriate, to show their personal interest in success. Accountability is an integral part of project management. Senior manage- ment should take an active role and share in accountability if project costs or schedules are threatened. They should help solve problems by first assessing

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36 PROGRESS IN IMPROVING PROJECT MANAGEMENT AT THE DOE alternatives and then selecting the best direction. To avoid the impression that management is not committed to the process, senior managers need to devote time to achieve this level of engagement. Project justifications, recommendations, project plans, and information reports should be well prepared and reviewed at each appropriate management level. Senior managers should determine if the documents are adequate and, if not, return them for correction and communicate to the authors that management expects better performance. Senior managers also need to judge whether project managers are prepared and able to answer probing questions. (See Appendix E for a list of questions for determining whether a project is ready to proceed.) If the project managers are not prepared, senior management must not permit the project to proceed but must send it back so that better answers can be developed. Another opportunity for senior management to demonstrate its commitment to project management excellence is to assure that adequate resources are pro- vided. Senior management can make a positive statement by bringing additional resources to bear where they are needed for project management and project managers. Senior management also has an important role in rewarding successful project managers. Praise and recognition are the most important motivators; however, monetary rewards are usually welcomed but need not be lavish. The committee believes that the annual awards program managed by OECM has been effective in recognizing project management achievements. What most success- ful project managers want from senior-level corporate management is not so much monetary rewards to motivate them (good project managers are already highly motivated) but consistent support by senior management in removing the obstacles to project success. Likewise, it is important for senior management to remove a person from a position of responsibility if he or she is proving to be a poor project manager. Usually, the field level organization is aware of poor project manager performance well before senior management. Remedial action by senior managers will reinforce the importance of good project management. ACCEPTANCE OF CHANGE WITHIN THE DOE CULTURE The committee has gathered input on DOE's project management culture and acceptance of efforts to improve project management practices and proce- dures requiring cultural change within DOE. Its observations are based on input at meetings with DOE personnel and DOE contractor personnel from both the headquarters and field locations and participation in DOE project management workshops. Change in Strategic Planning The committee notes that there is a positive change in DOE culture reflected by the effort to develop a department-wide strategic planning system. OMBE has

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DOE PROJECT MANAGEMENT CULTURE 37 created a draft planning, programming, and budgeting process for the first time in DOE history. NNSA is developing a future-years nuclear security plan, a major component of which is an integrated construction project plan (ICPP). The NNSA Program Integration Office will put the ICPP together from inputs by field activities based on their individual 10-year site plans. Using the ICPP as the basis for determining which projects are included in the annual budget submission is expected to gain broad support because managers will have a definite plan for future-year projects rather than relying on an annual scramble. Acceptance by DOE Personnel The committee has observed that, in general, DOE personnel agree with the need for a project management system. However, opinions differ on how the system should work. Comments from personnel raised concerns that the require- ments were similar to construction specifications, too prescriptive, and hard to follow. Opportunities for tailoring the requirements were seen as positive, but even with tailoring, there was continuing concern about the applicability of the requirements to environmental projects. Discussions during the OECM project management workshop in 2002 indicated concerns about the requirements for front-end planning prior to requesting critical decision 0 (CD-0) and CD-1, and delays were expected in obtaining approval to proceed from headquarters. Work- shop participants recommended raising the threshold for the value of projects required to comply with O 413.3. Their recommendations would exempt smaller projects and environmental projects and would shift approvals to lower levels in the organization. The committee found widespread acceptance of the need to improve project management throughout the DOE complex. Based on presentations and discus- sions during meetings, the committee believes that the requirements of O 413.3 are generally being incorporated into projects across the board. Although con- cerns were voiced over delays associated with headquarters reviews and the work associated with up-front planning, the committee found no evidence of a refusal to comply or of efforts to derail the project management system. However, the committee observed that the quality and completeness of the plans and reports required for compliance with O 413.3 are not consistent. The vigor displayed in implementing O 413.3 and related efforts to improve project management vary, but cultural change has been observed throughout DOE. One sign that change is being accepted is evident at the Richland Operations Office (RL) and the Office of River Protection (ORP). Senior managers expressed a positive view of the fundamental project management principles including those of environmental management contained in O 413.3 and the PPM. Fur- ther, the efforts and work products of federal employees should enhance the oversight of contracts for project management services.

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38 PROGRESS IN IMPROVING PROJECT MANAGEMENT AT THE DOE Acceptance by Contractors The committee observes that DOE contractors, perhaps even more than DOE personnel, agree that a project management system is needed, but the O 413.3 requirements and the PPM methods were not universally accepted. Nonetheless, contractors clearly intend to comply with and implement O 413.3. In several instances, even projects that had been initiated prior to the effective date of the Order are being brought into compliance. Contractors expressed concerned about possible delays resulting from headquarters reviews and the costs of implement- ing the requirements of O 413.3 and the PPM (e.g., independent reviews and additional documentation). While the contractor representatives who met with the committee were on cost-reimbursable contracts and presumably had the means to recover this type of additional cost, the issue was mentioned frequently. The varying degree to which project management reforms are accepted reflects the wide range of contractor cultures. Perhaps the broad range of reactions by different DOE components reflects the diversity of missions. The NNSA mission is driven by its Department of Defense customers, and pressures from external requirements for environmental cleanup drive the EM mission. The SC mission, on the other hand, is developed by scientists in the DOE national labora- tories, which are run by university contractors and are naturally resistant to direction from Washington. The committee observed a positive response to the project management process improvement initiatives incorporated in overall management contracts. BWX Technologies has established an ongoing education program for project managers at the Y-12 plant in Oak Ridge, Tennessee. The University of California (UC) Office of the President has responded vigorously to a contract initiative by establishing process improvement programs that apply to all facilities managed by the university. The UC program includes creating an external advisory panel to provide guidance and oversight, establishing senior management positions responsible for process improvement, identifying people across the UC sites with the requisite knowledge and experience, and conducting meetings and workshops to increase awareness of new DOE procedures. The committee believes the UC program exemplifies what is needed to implement a cultural change in project management. OVERCOMING RESISTANCE TO CULTURAL CHANGE The reaction of DOE field personnel and contractors to current initiatives to develop and align project management culture through O 413.3 and the PPM reflects a general desire to do their jobs without interference from others. This is not unusual when considering that resistance by scientists and other highly edu- cated people to oversight from managers is not uncommon. Acceptance of project management improvement initiatives by individuals and organizations within

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DOE PROJECT MANAGEMENT CULTURE 39 DOE ranges from enthusiastic to somewhat grudging. The key to effecting cultural change and an eventual payoff from a disciplined, comprehensive project management system is consistent, long-term application. Accordingly, maintain- ing a course with minor adjustments, rather than starting over in a new direction every few years is essential for improving the management of projects that span several years. The continued strong personal interest and involvement that has been shown by DOE senior managers appears to be the biggest single agent of cultural change related to project management within DOE. This type of front office involvement is crucial over the long term to establishing and maintaining an effective project management system. FINDINGS AND RECOMMENDATIONS Finding. DOE personnel and contractors generally support the need for a compre- hensive project management system but prefer a system with fewer requirements for upper management oversight. Recommendation. DOE should resist efforts to reduce up-front planning require- ments and to lower the level of authority at which critical decisions are approved. DOE should apply persistent pressure to ensure that the right projects are picked for execution and that they are planned and executed according to established policies and procedures. Procedures should continue to include a process for tailoring requirements to the size and complexity of projects. Recommendation. DOE should assess its culture and subcultures and develop strategies to bring about organization alignment on core project management principles at all levels of the organization. REFERENCES Hagberg, R., and J. Heifetz. 2000. Corporate Culture/Organizational Culture: Understanding and Assessment. Foster City, Calif.: HCG. Available online at . Accessed January 10, 2003. NRC (National Research Council). 1997. Enhancing Organizational Performance. Washington, D.C.: National Academy Press.