Before we dive in, I wanted to start by addressing the coronavirus affecting our daily lives. These are challenging times for everyone, and I hope you are all safe and healthy.
As many of us hunker down at home for the next few weeks, we are all faced with the task of keeping in touch with our families, coworkers, and the community around us. It is easy to feel isolated in this unprecedented time.
This physical separation reminds me of how our own industry tends to behave, even without social distancing. When executing a capital project, we tend to operate within our own silos. Whether that be procurement, engineering, construction, design, or otherwise, we typically stick to what we do best.
Staying within our silos isn’t necessarily a bad thing. Most of us have a specific area of expertise, and when we focus our attention on this area, we can maximize our talents and find efficiencies we wouldn’t otherwise have seen.
We’re also incentivized by the success metrics that we’re measured by. When we are laser focused on our own metrics, we can achieve the best results for ourselves and our silos. In many ways, our silos are safe. We know what it takes to be successful, and we know what it takes to get our specific jobs done.
However, when we stay within our own silos, we often fail to see the bigger picture. This is where breaking down our silos, while scary at times, can deliver a better result for capital projects as a whole.
Take for instance the current coronavirus environment. Companies left and right are stepping outside their comfort zones to help those in need. Clothing lines are dedicating resources to making masks and protective gear for healthcare workers. Car manufacturers are using factory space and resources to create ventilators for hospitals. Universities and hotels are using their facilities to house additional hospital beds and quarantined individuals. Instead of staying in their own silos, these companies are breaking down barriers to produce the best outcome for the broader population.
However, I can tell you from experience that individual workers will almost never do this on their own. In our world, it is up to business owners and project managers to encourage workers to break down their silos. The way to do it is to set smart success metrics that incentivize employees to consider a project’s broader goals in addition to their own personal goals. Project managers and site owners must have methodologies to make sure all metrics are aligned with the key drivers that maximize a particular investment’s return on capital. There are also tools that can help get this done like Day & Zimmerman’s Capfx® process.
When engineers understand the total cost of particular pieces of equipment, when contractors work with suppliers to understand delivery timing, and when procurement teams understand why a certain piece of material is essential to the project, each silo can work together and create powerful efficiencies that keep projects on target. So even when you do have silos, effective and efficient silos that work together can also be safe and productive.
It is a big change, and many people in the business believe this is too difficult to pull off. But if you aren’t doing it, trust me, your competitors are.
Until we break down our silos (or make our silos work better together), and step outside our comfort zones, capital projects will finish with untapped potential. Instead, we must rise to the occasion like the car manufacturers, clothes producers, and hotels stepping up to beat the coronavirus.