The Capital Effectiveness Conundrum


Capital effectiveness. It’s the Holy Grail for construction, maintenance and engineering capital projects in the process and industrial market. But while every organization starts out with the intent to achieve capital effectiveness, doing so comes down to execution. The data shows that many businesses struggle to meet project goals for cost and timelines. According to consulting firm ATKearney, 63 percent of capital projects are over budget and 75 percent are not meeting their schedules.

Unfortunately, there are no easy solutions to solve this problem. It requires a careful analysis of risks and returns when judged against project and overall company objectives. In most cases, creating true capital effectiveness requires not only a shift in process, but also a change in organizational culture. Throw in coordination with third parties who will inevitably play a role in capital project execution, and you’ve got a complex challenge on your hands.

Capital effectiveness can be achieved and it has been achieved on projects and within companies around the world. I know. I’ve seen it. But in order to get to the ultimate solution, it takes more than the same old ideas wrapped in new packaging. It requires new thinking, new processes and new ways of communicating the benefits of a capital effectiveness program throughout every level of an organization.

"The Waz Principle" will serve as a place to share some of the effective ideas and tactics that I’ve seen for more than thirty years in the industry. I’ll talk about personal experiences, strategies and people that I’ve encountered on some of the more effective projects I’ve worked on. I hope you will be part of the discussion as well.

Not every project is going to work perfectly, but I know that businesses can do better than having more than half of their projects over budget and behind schedule. Together, we can figure out a better way. Let’s get to work.