Taking Advantage of Opportunity – National Expansion

A NSW centric construction company approached Living Dynamics to assist in preventing a major Design and Construction project that they had recently won in Canberra heading into distress.

What we found was that crucial [localised] management actions were not being taken at the appropriate time, and as a result the project was eroding opportunity and heading towards disaster.

We introduced standard Project Management disciplines – with an emphasis on identifying, managing and tracking residual float in the Project.

Through tight management of the residual float we were able to demonstrate to both our customer and their client that the clients continuing procrastination and constant change was eroding float and our clients’ commercial opportunity.

The outcome was a renegotiated completion time and cost compensation that not only restored our client’s original margin but provided surplus.

Applying 4 Steps To Business Growth

Understanding Opportunity

In the project "exit meeting" that we facilitated we agreed that well established NSW cultural processes and “gut feel” were not enough to manage Major Projects in more remote or regional locations.  If the company wished to continue to expand – it needed to rely much more heavily on systems, processes and recruited competence than its original core people.

Creating Opportunity

Living Dynamics then assisted the company in a National Change Management Program and developed the following initiatives:

• A National Integrated Management System covering guidelines for all aspects of their Commercial Operations.
• A State based Commercial Management philosophy, solidified by seeking and hiring in Commercial Managers, driven by a National Commercial Manager.
• Create a new focus for bid and delivery teams on Risk and Opportunity awareness and improvement programs.
• National Project Auditing and State Wide Benchmarking to enable strategic and progressive assessment of projects.
• A distressed project management process and team for rapid deployment when certain Project KPI’s went below predetermined criteria.

As an example of the depth we went into, one of the processes deployed to address the companies’ constant erosion of Opportunity was to evaluate and analyse project performance over a number of projects.

Unravelling Opportunity

What we found was that at the heart of this erosion of Opportunity, was the companies’ inability to meet target completion dates (generally set at approx. 15% less than contract duration, and worth nationally somewhere between $10 - $15m pa in saved prelims).

At its core was a realisation that the company was still using programming as a marketing tool not a management tool!

Delivering Opportunity

Based on our advice and implementation, the culture has changed dramatically, such that the company now has a very clearly defined process of transition from Tender Program to Construction Program to Target Programs, and then from Master Target Programs to more detailed Target Programs.

A major Subcontractor seeks help.

A subcontractor had been awarded a major subcontract package on a very demanding project in Canberra.

The subcontractor knew that whilst his existing processes and operating procedures were adequate for his normal day to day business, they were inadequate for managing such a high-demand project or client.

The subcontractor consulted Living Dynamics to help manage this project specific situation.

In our consulting role, we implemented:

• A review of all contract obligations and set up project corresponding notices and compliance obligations.
• A time and cost phased schedule to suit the Head Contractors Program and Project Milestones.
• Tracking and monitoring of all planned works on a weekly basis, and generate appropriate reports, notices or applications to suit obligations.

We also advised the client on:

• The most appropriate pricing strategy based on the changes we implemented.
• Negotiation options and strategies.

As a result of the changes and advice implemented, the client maintained his margin and cashflow, despite the project running six months late.

In summary:

• The Client maintained margin.
• The Client maintained an appropriate cashflow.
• The Client got paid progressively for all his variations.
• The Client successfully renegotiated completion dates and prompt settlement of final accounts.
• The Client IMPROVED his relationship with the Head Contractor.

Massive Expansion Of Family Business

A family based business supporting the mining industry benefited from the Australian mining boom, by rapidly expanding its services of providing and operating  “turn key” villages to mining companies.

Operations went from approximately 500 units a year to 3000 units in less than 12 months. To ensure that the company could achieve such major growth in its construction and delivery process, its Construction Manager consulted Living Dynamics to assist in upskilling its newly created project Project Delivery Teams.

To ensure the desired outcome, we implemented the following changes:

• Review/redefine existing planning and scheduling procedures to ensure they were appropriate to meet the demands of the large and more intense deliverables.
• Evaluate the skill sets of the existing personnel to assess competency gaps between what they needed to know and what they actually knew in terms of planning and scheduling.
• Design appropriate training programs to meet the above “gap” analysis.
• Implement the above training programs.
• Facilitate additional improvement programs, as new Project Delivery Teams became more adapt at meeting the newer, more demanding schedules.