A joint post from EarthPM and TenStep:
Last time we introduced this series and outlined the focus for the topic of green project management using the Deepwater Horizon disaster as motivation. In this post, we’ll cover how we’d work ‘green’ project considerations into the Project Charter, Project Scope Management, Project Integration Management, Project Management Plan, Requirements Management. In this last of three parts, we’ll cover Cost Management, Communication Management, Risk Management and Procurement Management and give a brief summary.
When estimating project costs, did BP consider costs for implementing any risk response strategies?
As mentioned in the Charter section, one could look at the Kevin Costner-funded Ocean Therapy centrifuge boats as an example. For a relatively small investment, BP would be buying not only an easy way to clean up after a possible spill, but would gain valuable positive PR by aligning with the high-profile actor and his efforts to protect the Gulf. Perhaps it is too optimistic to think that the oil companies would have identified oil cleanup technology as a part of risk-response, but it certainly is within the realm of reason that cleanup technology and costs would be included in risk contingency plans (the plans that are put into effect if the original risk plan fails).
In fact, a recent news story shows that – although late – the oil industry has pooled their resources and is collaborating on oil spill response. See this Reuters news story.
Identifying the costs related to the project\’s environmental aspects allows the project manager to discuss the costs with the Sponsor and determine whether the cost is more than offset by the project results. The financial costs of the realized threat are so high in this case – in the tens of billions of dollars and in fact the continued life of the company itself – that a different type of thinking has to be applied. As is obvious now, BP could have invested more upfront to further mitigate or avoid the risk of spilling oil into the ocean. Even with Green Project Management, if BP\’s decision was not to invest more in a risk response strategy, then perhaps they should have estimated the contingent costs required for a clean-up activity as they are currently undertaking. See the risk management section.
Communication Management – Identify Stakeholders
How thorough was the stakeholder plan and ultimately the Communication Plan prepared by BP for this project? This project appears to have many key stakeholder groups, both internal and external. Was every major stakeholder group – internal BP, NGOs, government, industries/associations (e.g., fishing along the Gulf Coast), etc – identified and considered? Were they all included in the communications as BP developed and implemented the oil rig?
What type of communications plan would allow BP Chairman Carl-Henric Svanberg to say “we care about the small people.\”? We assert that with properly indentified stakeholders and a thoughtful stakeholder management plan, this likely would not have happened.
Risk Management – Probability and Impact Assessment
Really, this entire incident comes down to the way BP and others managed project risk. The context is greater than risk management, as you can tell by the number of other headers in this document. But it really comes down to project risk management. With “greenthink”, risks may be evaluated differently.
If we consider environmental factors that had never been applied, then BP may have identified the risk of the blowout as an extremely low probability of occurrence (based on prior experience, faith in the blowout preventer, competitors\’ experience, etc) but a very high impact when considering the environmental impact. In fact, a very similar accident occurred in 1979 the Ixtoc. In that case, the blowout preventer also failed. So there was a precedent for this type of failure. It could not be considered a “failsafe” solution. The assessment could have also included the environmental impact of a blowout that occurred in Santa Barbara, California, in 1969. Was their assessment of the impact high enough?
With such a low probability, you would have to have a huge impact for the product of probability and impact to give a risk score worth pursuing. We assert that the probability was considered to be zero and that the impact was tremendously undervalued. Without considering the environment aspect in project management process of risk management, the product was low enough that the risk mitigation and response was inadequate. As we noted above, Green Project Management may not result in a different decision. However, we are discussing this event because it truly depicts the importance of considering the environment and making sure that all project-related risks are properly identified, quantified, and addressed with the Sponsor and key stakeholders.
When planning and executing procurement activities for this project, did BP:
- Validate that their vendors/partners (such as Halliburton) met their environmental requirements?
- Understand how their vendors/partners would align to BP\’s environmental policies and project approach?
- Request feedback from vendors/partners on how they would align with environmental policies?
- Audit that the vendors/partners were actually following the environmental policies?
- Audit that the deliverables met the defined environmental criteria?
These examples have been provided to demonstrate how Green Project Management could assist in incorporating environmental thinking in any project. These scratch the surface in factoring the environment into project management processes. Perhaps BP accomplished these and more. Then again, perhaps a more structured approach to including the environment in all project management processes would have uncovered some of the issues and led to some very different decisions during the project, prior to deciding to drill more than five thousand feet deep in the Gulf of Mexico.
We assert that the point of Green Project Management is to view projects through an “environmental lens”. Perhaps, if that happened, some decisions would be made differently, with very different results.
About the Authors
TenStep, Inc, focuses on methodology development, training, and consulting, through its worldwide network of offices. Its focus on green project management (www.green-pm.com) was pioneered by Tom Mochal and Andrea Krasnoff.
Tom Mochal, PMP is President of TenStep, Inc., (www.TenStep.com). Mochal is an expert instructor and consultant on project management, project management offices, development lifecycle, portfolio management, application support, people management and other related areas. He was awarded 2005 Distinguished Contribution Award from the Project Management Institute (PMI).
Andrea Krasnoff, PMP is Director of TenStep Consulting Services. Andrea has more than 20 years experience in project management, program management, portfolio management, and PMOs. She is the Director of TenStep Consulting Services and is a key contributor to the TenStep Green-PM model.
EarthPM is dedicated to the “intersection of green and project management and is a collaboration between Rich Maltzman and Dave Shirley, co-authors of Green Project Management, CRC Press. EarthPM provides the critical link between project management and environmentalism to increase awareness amongst project managers of the power they have to improve the greenality and effectiveness of their projects – whether or not they are directly involved with the environment. Through their website EarthPM.com, Rich and Dave provide a variety of blog postings and resources, as well as consulting and course development services in Project Management and Green Project Management.
Rich Maltzman, MSIE, PMP, has more than 30 years of project management experience managing projects, leading project managers, consulting and teaching in Europe, the Middle East and the United States. Currently, Rich is Senior Manager, Learning and Professional Advancement, at the Global Program Management Office of a major telecom concern. He is currently co-authoring a book with Ranjit Biswas, PMP, entitled “The Fiddler on the Project”, and posts regularly on his blog, Scope Crêpe, http://scopecrepe.blogspot.com.
Dave Shirley, MBA, PMP, has more than 30 years of project management experience in environmental and public health, and the telecommunications industry leading projects, project teams, managing project managers, consulting, teaching and course development. He is currently developing a graduate course in Environmental Issues. Dave is currently writing a book on project management for health care professionals.