As an automation professional, have you ever had an idea for a project that was rejected by management, even when it was clearly, from your perspective, a good idea that would produce benefits for your company? It happens all the time, of course, not just in manufacturing, but in all functional areas of business.
“During my career in operations, I’ve seen lots of good ideas, and some of them get approved pretty smoothly, while others, despite being good ideas, just sort of languish,” observes John S. Sieg Jr., managing director, corporate operations, at DuPont Engineering and Operations, in Wilmington, Del.
As one of about a dozen DuPont managers who sit on the company’s global operations leadership team, Sieg is involved directly in deciding which operations projects get the go-ahead at the $27 billion company, and which ones fail to make the cut. He described the decision-making process during a presentation at a Forum last June in Boston sponsored by ARC Advisory Group Inc., Dedham, Mass. And in a recent conversation with Automation World, Sieg provided some guidelines for those looking to maximize the chances for getting their projects approved by corporate management.
Four success factors
Sieg identifies four “critical success factors” that are necessary for authorization of an operations project at DuPont, which he believes can be applied equally well at other organizations.
First, your project must provide a compelling business proposition. The proposed project must be aligned with the strategic drivers of your business, and the value proposition must be clearly stated and relevant to corporate realities. At DuPont, a project idea must be translated into a business objective letter that clearly outlines the business need, key constraints and deliverables expected from the project. “If somebody has a hard time doing that, then they really need to rethink what they’re proposing,” Sieg relates.
Second, the project must have a favorable reward/risk factor and follow 20/80 principles. By that, Sieg means that 20 percent of a successful project’s deliverables typically provide about 80 percent of the project’s benefits. In developing a project idea, you should identify risks and probable causes for upside and downside project performance, and focus on the process variables that provide disproportionate business benefits. Resist the inclination to add fluff. “Don’t load your project up with nonessential extras,” Sieg advises. “Make sure that you’ve identified the significant few benefits, that, when delivered, will get you 80 percent of the business results. And then, if you want to do additional things, show them as being optional extras that the project authorizer can decide whether or not to fund.”
The third success factor is that the leader assigned to a project must be capable and competent, with integrity and an ability to deliver that is beyond question. Management sponsors look for project leaders who are knowledgeable, ethical and focused. They want a record of solid project experience—or an excellent work ethic coupled with a solid mentor—as well as evidence that the leader will not be easily distracted by the inevitable upsets that come with all projects. The project leader should be results-driven, a person who will do everything humanly possible to deliver the value promised by the project. Agility is also key, in the sense that the leader can cope with change and knows when to implement “Plan B,” according to Sieg. An effective leader not only understands the project strategy and drivers, but can translate them into simple directions and objectives that everyone can understand.
The fourth success factor is the use of a stage-gated process and front-end loading of a project to enroll and align owners, and to ensure that a project has the maximum chance to deliver business value. DuPont’s global operations leadership team relies on a project phase gate checklist that covers five phases—from initial consideration at Phase 0 through implementation at Phase 4—that a proposed project must pass through.
Phases and stages
Phase 0 is where all proposed operations projects start at Dupont. This phase is focused on clarifying and validating business objectives, defining the project’s scope and providing enough information to obtain functional support. “If the project is coming out of an engineering organization, the ranking member of that engineering organization would know enough about the project by the end of Phase 0 to say, ‘Yes, this is something that does have application across DuPont operations, and I’m sponsoring this project,’ ” Sieg explains. “If we can’t get good functional sponsor support in Phase 0, then the idea is stopped there.”
Phase 1 delves deeper. In this phase, stakeholder representatives—such as managers from plants that a project might touch—are assigned, performance standards are established, and a preliminary timeline with key project milestones is set up. The project is also reviewed by the global operations leadership team for strategic fit with other corporate operations activities, and an initiative sponsor is assigned.
Getting functional sponsorship, followed by enrollment by other key individuals in Phases 0 and 1 are particularly important, says Sieg. “We’re trying to build the right level of alignment and stakeholder involvement early on,” he notes, “because sometimes, when people have what they think is a good idea, they’ll run with it without getting those things done very well.” When they later start looking for support, they are already well down the road, and may have wasted time and effort on ideas that were never destined to be approved, Sieg points out.
With initial support achieved, Phase 2 is designed to flesh out the details of what is necessary to obtain the value proposition described in Phases 0 and 1, Sieg continues. In this phase, critical tasks are identified and the concept is piloted to provide a preliminary validation of the benefits. The final project scope and implementation plan are nailed down, resource and funding requirements are identified, and a control plan and metrics are put together. “The outcome of Phase 2 is going to tell us if we’ve done enough work to make sure that the value proposition that’s been promised can be delivered,” Sieg relates. If the answer is no, then the project goes back to the global operations leadership team to be either redirected, rechartered or shut down.
On the other hand, if the project proves out, it moves on to Phase 3, where it faces the final review by the global operations leadership team. “This is when the project team says, ‘We’ve done our work, here’s the plan, here’s the rollout and here’s what it will finally cost,’ ” Sieg explains. It is in this review that the final go/no decision on the project is made. “We may decide to proceed with the project as it’s been outlined, or it could be redirected.” The team could decide to delay the project or speed it up from its planned pace, for example, based on funding or strategic considerations, or other factors.
Phase 4 in the DuPont stage-gated process is the actual implementation of the project.
Sieg says using this stage-gated project authorization process for projects leveraged across operations is relatively new for DuPont. The global operations leadership team began working with the process late last year, and ramped it up for use on leveraged project requests at the beginning of 2004. The company has found that the discipline imposed by the stage-gated process enables projects to be implemented more smoothly and predictably, while reducing the time required to go from an interesting idea to a real business success.
In one project involving about 60 of DuPont’s U.S. plant locations, for example, the cycle time from introducing to implementing the project was about four months, Sieg says. Had that initiative been approved using DuPont’s traditional approach, the time required would have been two to three times longer, he estimates, while the benefits achieved from the project would have been perhaps only half those achieved in the accelerated scenario.
“The project exceeded our expectations, and if I were to give one reason why, it was because the people who had to manage the implementation were involved from the very beginning in the project design,” Sieg explains. “We didn’t run into the normal problems that you have when one group comes up with their design and then hands it over to another group to implement.”
While the process described by Sieg was developed for use with large projects that cut across operations at DuPont, the approach could be used equally well for a single site or a very simple business project, he says. “The four critical success factors, in my view, are fairly universal,” Sieg notes. “If you can’t clarify why your project has a compelling business proposition, then it’s likely that you’re going to have difficulty getting it supported.”
Sieg has a particular word of caution for automation professionals and other specialists about the importance of getting up-front buy-in on a project from management and other stakeholders. “Sometimes for people who are very competent in a particular discipline, the inherent value of certain projects is so clear to them, that they don’t understand why they have to explain it,” says Sieg. “They understand why a project makes sense, so spending a lot of time to show how it connects to the business is not something that seems necessary.”
But taking the time will pay off, both for getting through the early phases of project approval, and in the later stages as well, Sieg assures. “If the people who have the money and who are authorizing the projects understand at the early stages what a project is about, then it’s more likely that they’ll support the project if the details during the Phase 2 work do, in fact, show that the reward/risk factors are reasonable, and that the business proposition can be maintained.”
Sufficient rigor applied at the front end of a project proposal can help avoid unpleasant surprises later, Sieg advises, and it can take much of the suspense out of the authorization process.