Reviewing a high risk project
PQ partnered with a multi-national precious metals miner to review their most important growth project with the aim of identifying gaps, risk and sources of performance uncertainty. The review identified a range of issues but the most significant improvements were how corporate leaders could establish the pre-conditions for major project success across the entire portfolio.
The Challenge
Expanding growth project portfolio. The client had a very successful growth strategy that a was creating a pipeline of major growth projects, but they did not have a consistent approach to developing and assessing them.
Inconsistent expectations. The leadership’s understanding of pre-approval study outcomes and the resultant level of project execution predictability varied leading to inconsistent expectations and satisfaction with actual project performance.
Centralised decision-making blurred accountability. Ambiguous delegation of authority resulted in all decisions being deferred to executives causing delay and a loss of ownership.
The Approach
PQ worked with leaders to establish fit-for-purpose investment and project management frameworks and led the implementation to bring the required level of consistency and rigour
Define an Investment Framework (phases, governance, organisation roles, valuation and the risk/reward factors). The framework needed to be responsive to the company strategy, culture and risk appetite while providing the consistency that would support well-informed investment decisions.
Define a Project Management Framework (project phases, deliverables, quality, controls and governance and reporting). The framework needed to be flexible for project types (major operating capital, expansion, business-as-usual projects) while ensuring project information was reliable, accurate, timely and that status, issues and responses were well understood.
Defined, implemented and facilitated project governance. Established the Investment Management Committee with a clear delegation of authority and filled the secretariat role to support the implementation and embedding of the investment and project management processes and discipline.
The Outcomes
The business has a consistent process that means decision makers are able to influence studies and projects at the optimal time and have increasing confidence that the promised business case will be delivered
Improved belief in the delivery of major project value. Major projects at multiple assets progressed projects though study phases and into execution with leaders having greater confidence is the approval requests and likelihood of execution success.
More predictable project performance. The major projects that progressed into execution became more predictable with the most recent projects safely achieving production targets within the approved cost and schedule.
Timely business involvement and influence. Project challenges cannot be fully eliminated but the business now has much earlier warnings, greater visibility of issues and the ability to influence and contribute to the range of responses. As a result, projects are more closely linked to the group strategy and ownership is shared by stakeholders and the project team.