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Ever wonder why doing everything right doesn't necessarily guarantee a favorable project outcome? Even when project managers meticulously follow PMBOK principles, projects can still go wrong. The simple response is to blame failure on the poor implementation of the project. However, suppose the problem lies in the fact that it wasn't the right project to tackle in the first place?

What Makes a Project Successful?

When you think of a successful project, how would you describe it? Would you say: "It was on time and under budget?"; "The stakeholders said it was a success?"; or "It provided a significant business return to the company?" Classically in the world of project management, the first phrase has been used to define a successful project. The second statement has also often been used to describe a "good" project. But today, the third statement is being used more frequently, as the focus of project management shifts to Initiating and Closing.

Project managers are now being asked to manage the company's assets. This forces them to look beyond the area of project management because it puts the responsibility of looking out for the company's best interest on their shoulders. Like many large corporations, Chevron has had its share of projects that were on time and under budget, yet were not the best business decisions for the company overall.

Chevron's Experience

At one point, Chevron had a large plant that it constructed in the Midwestern United States. At the time the project was conceived, the product that the company wanted to produce was in high demand and commanded a premium price. Based on this, a plant was designed, funded and constructed by Chevron's project professionals.

The plant was actually completed ahead of schedule and under the approved budget. The project team considered it a great success. But the plant was mothballed and closed shortly after it was commissioned. The project was a success, but the business died!

Another example was a project to acquire and develop some very promising exploration acreage. Based on sound research technology and good project management, Chevron spent significant money to drill wells. It drilled the wells and discovered oil and gas. Although the potential identified was significant, there was no supporting infrastructure or economically feasible way to move the products to market and so the acreage sits idle to this day.

Lessons Learned and Underlying Principles

From a business perspective, neither one of these projects contributed increased revenue to the company. In fact, in the end, these projects actually subtracted value from the business. Failed endeavors such as these have taught Chevron the following lessons:

• Make sure any business opportunity is clearly defined, the market understood and that the project's stakeholders, once identified, clarify their expectations.
  
  
• Even after a project has begun, the business environment and the project's alignment with that environment must continually be tested.
  
  
• Look at the whole project and understand all the steps of the business chain.
  
  
• Executing a project well does not guarantee success.

These realizations have spurred the company to create the Chevron Project Development and Execution Process (CPDEP). CPDEP is a five-phase process that provides a formalized, disciplined method of managing projects and other asset development techniques. With its structured process of making decisions and analyzing risk, CPDEP has improved how Chevron approaches such varied tasks as negotiating mergers and acquisitions, developing training curricula and conducting environmental assessments.

The CPDEP process stresses two key criteria. First, project leaders and upper management need to work together to select the right projects. Secondly, they must improve project outcomes through excellence in execution. It takes adopting this broad focus to achieve consistent project success.

CPDEP Offers a Unique Solution

CPDEP is unique in that it forces the technical team and upper management to discuss strategic issues and engage in an ongoing dialogue from the project's inception to its completion. The process starts off asking hard business questions about the problem. It then requires that the team brainstorm a wide variety of ways to approach a solution from both a technical and business perspective.

Finally, CPDEP has added a new dimension to Chevron's project management methodology - namely, the post-project appraisal process. Research has shown that post-project reviews have helped improve the process over the long run. CPDEP's Phase Five is a continuous assessment of the business success of a project; a phase that must be completed over a long period of time. All kinds of projects can benefit from this process, but those that benefit the most are complex information processing projects.

Project Management as a Business Process

Chevron learned that by not making the right decisions, excellent execution is of no consequence to the success of a project or business. Consequently, the company has asked its project managers to follow CPDEP. Expectations are that project leaders will assess business opportunities, define the customers and stakeholders, and explicitly define achievement in business terms prior to developing a project plan.

The problems Chevron has experienced that led to the development of CPDEP are by no means specific to this company or the oil and gas industry. Many organizations are finding that project teams are an integral part of maintaining a company and keeping it competitive in the marketplace. No longer is project management characterized by an over reliance on technical methods, such as PERT charts and CPM. Even the project leadership approach of emphasizing organizational, interpersonal and team issues, has taken the backseat to the new era of project management; that is, project management as a business process.

End of Article

PMBOK
The Project Management Institute's Project Management Body of Knowledge is the de facto standard in managing projects.

About the Authors

Dennis J. Cohen, Ph.D., is Senior Vice-President of Strategic Management Group, Inc. (SMG). He serves as the lead subject matter expert for SMG's project management practice. Dennis.Cohen@smginc.com

Judd Kuehn is a Senior Asset Development Consultant with Project Resources, a division of Chevron USA. Mr. Kuehn serves as an internal consultant, assisting Chevron project teams worldwide on using the CPDEP process.

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