Part 11 in the series ‘Development of Mining Projects from Scoping Study to Commissioning successfully for the benefit of your shareholders
Sten Soderstrom
Available on mobile MINING NED, CHAIR, PROJECT DEVELOPMENT & TRANSFORMATIONAL MANAGEMENT EXPERT, ENTHALPHY Associate, >30 YEARS' INTERNATIONAL EXPERIENCE . MAusIMM, Fellow Chartered Professional Engineer, FAICD.
“As Good As We Are At Project Management, We Sometimes Lack Agility When Adapting To Changing Project Circumstances”
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In Part 10 we discussed organizational change management challenges that present themselves when a mining project moves on to the next phase. We discussed the importance of defining new roles and responsibilities and how conflicts may arise and how to prevent these from occurring by engaging in an open and transparent dialogue about change.
In this Part 11 we cover change management processes which arise because circumstances have changed or we identify a need to change some aspects of our plan. We discuss the need for documenting a change in the form of a request, its review and decision making process following which we identify the impact of a change in terms of cost, time and other critical factors. Finally we talk about the importance of communicating change to all stakeholders and those affected.
Introduction
Your project is running along smoothly. You’ve established a firm strategy with action plans and a detailed programme. Then, out of the blue, something needs to change.
It may be that someone has come up with an alternative, or it may be that the change has been forced upon you. Whatever the reason, you need to ensure you manage the changes without causing unintended or unforeseen consequences.
This is a process that needs to be pursued from the very beginning of a project all the way through to completion. Projects rarely, if ever, run exactly according to the initial plan.
Aspects of a project may need to change during any stage. How this change is managed and the underlying processes that you use to guide the organisation through the changes are critical to the success of the project. That is why formal change management plans and processes need to be defined upfront.
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The Importance Of Plans And Processes
As the top decision maker in your organisation, you are accountable for the success of the change management system. The whole discipline of project management needs to be built around a set of standards and processes that govern how an organisation manages a project and deals with change. This means that you are able to identify what the change is, why it occurred and the ramifications of that change, in order to manage the impact of that change.
Before any changes are brought in, you need a formal process to give approval for that change to occur, with a clear understanding of what it will mean for the organisation. These processes form a built-in protection so that change only happens when it is needed, and that when it does happen, it is beneficial to the company.
So, there are a set of tools that you need to apply in order to avoid negative outcomes for your project. It is not about anticipating every possible thing that might go wrong, but you need to know what to do when things go wrong. It’s about having a system in place so that when change needs to happen, it is a win rather than a fail.
Poor change management can be a huge problem for the executives within an organisation, and they can really suffer as a result. This is because the buck really does stop with the people at the top when it comes to managing the project. So, for you as the senior executive, making sure that change management is everything it needs to be, is crucial to your success as an executive as well as to the success of the project.
Change management defines the processes that need to be followed if part of a project needs to be changed, before that change is implemented. In project management circles, this is sometimes referred to as Integrated Change Control.
Integrated Change Control
The key activities of this process include:
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There are an infinite number of ways in which change to the project becomes necessary as you go through the stages of scoping study, preliminary feasibility study, feasibility study, project design, procurement and construction.
Let’s look at a few examples to illustrate what the challenges may look like and the problems that can result from the changes, depending on how they are handled.
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Are You Accounting For Continuous Evolution?
?As we have seen, projects continuously evolve, until you lock in their definition, and are defined in terms of what is possible, how things could be done, and how things will be done. This process requires steadily removing uncertainties and ensuring that the project is economically feasible and will provide reasonable returns to shareholders.
Because the project is always evolving, it also undergoes change on an almost continuous basis. Different aspects of the project will have different levels of dependence on one another.
Some parts of a project may be fully independent, and some may be completely reliant on other areas. In all cases, there is a clear need to have a defined process by which change is managed in every area.
In the early stages of a project, you need to establish what a likely range of mine production is going to be, in order to ensure you can produce enough products to make the project economically viable, based on the current market price.
To establish this, you will make some assumptions and do a preliminary estimate of a range of possible production rates. At this stage you may select what appears to be the best option and proceed from there.
As changes occur in any one of the project disciplines listed in Figure 4 (geology, metallurgy, process, and so on) you will be faced with the challenge of ensuring that the cascading, or interactive, effect of these changes is captured, fully documented, and considered.
If these changes are not taken into account, you may end up with a project akin to a puzzle where the bits don’t fit together. The downside is that the project will no longer perform to the original economic viability criteria, the hardware may not be entirely suitable, and there may be significant delays and costs involved in taking corrective action.
Projects that require the mined material to be ground to a particle size and slurried for processing are quite sensitive to changes in optimal grind-size determinations resulting from testwork.
If changes are made due to testwork results, the impact can be considerable and can affect everything, including capital cost, operating costs, choice of crushing and grinding equipment, tanks, and infrastructure. If the potential or actual change to the required grind size hasn’t been given enough consideration, substantial re-design may be required. This will also impact on cost and schedule, to the detriment of the project.
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Agility
?People fail to be agile when they need to be making changes for a number of reasons. Think of it like a loop, where the first thing you have to do is acknowledge that change needs to occur or has already happened.
Then you need to understand what this means for the organisation. Then you have to know how to put the changes into place without causing damage.
Different companies get stuck at different points of the loop. They may be really good at one part of it, but then they fall down when it comes to another part.
The problem with this is that being good at certain aspects can create a feeling that things are under control, when in fact that is not always the case. No matter how far round the loops you get, if there is a point where you get stuck, then you are not able to adapt to change.
An agile approach to managing change uses the well-established principles and processes that are the foundation of good project management. By adopting this approach, the downsides of change are minimised, along with the risk of damaging the opportunities for strategic value creation from your assets.
"Reasons" for failing to have an Integrated Change Control
?So, why do we still see project failures occur due to not following this proven “pearl of wisdom”? The reasons can be varied. Here are a few common ones:?
1.????? Taking short-cuts
2.???? Inexperience
3.???? Running out of time or funds
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4.???? Lack of knowledge
5.???? Lack of expert advice
6.???? Not following basic governance principles
7.????? Poor project management
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By not engaging in project change management processes, you are highly likely to suffer significant additional costs and slippage of the project schedule. In addition, you certainly will not get the best strategic value creation potential from your project. It may also result in lack of morale and trust in management within your organisation.
Unfortunately, the number of well-managed projects is outweighed by the number of poorly managed projects. The challenge for senior executives is to ensure that you belong to the C-Suite of those with a history of well-run projects, which add strategic value from the assets owned by the equity holders.
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Key Takeaways
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IF YOU ARE OPEN TO HAVING A DISCUSSION TO EXPLORE IF YOU THINK WE CAN ADD VALUE TO YOUR PROJECT, PLEASE GET IN TOUCH. MY PERSONAL CONTACT DETAILS ARE LISTED BELOW.
If your ultimate objective is to add more strategic value to your organisation, which in turn increases the market capitalisation of your company, then I can help you ensure it’s a win-win for everyone.
?To find out how I can help your organisation, drop me a line or call. I am based in Perth, Western Australia.
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Sten Soderstrom (FAICD, FEngAus, CPEng, MAusIMM)
DIR ID 036 62566 41832 63
Mob: 0418918310
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Links to earlier Parts in Series:
Part 1:
Part 2:
Part 3:
Part 4:
Part 5:
Part 6:
Part 7:
?Part 8:
Part 9:
Part 10:
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? Sten Soderstrom
Strategic Support for High-Performing Teams > Driving Project Success > Ensuring Wise Investments > and, Mitigating Risks with People, Processes & Products.
3 个月Great read Sten, thank you for sharing your wisdom!