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Project management is about leadership, not democracy. The objective is to complete the project at the least expenditure of time and money. Treat others with respect, yes, but have clearly defined roles for each person and hold them accountable for their piece, replace them if they cannot successfully accomplish their role. These days, we often spend too much time with our eyes off the prize.
Much of the mismanagement of capital projects could be eliminated, from my experience, if companies adopted the discipline of quasi-public funding project monitoring. These are projects which are not financed through balance sheets but by issuance of tax-exempt or taxable project specific debt. In the last thirty years, I have had experience as the Technical Advisor on 22 such projects (in pulp, paper, energy, steel, medium density fiberboard and cement) with an installed capital base of billions. I have seen a few things.
After nearly fifty-one years in the business, my anecdotal guess is that about half of capital projects are successful, meaning: on time, on budget and fulfilling the original scope. The rest suffer from a myriad of deficiencies.
To wrap up this month on energy columns, I thought I would go to the brightest group I know in the energy business--the National Renewable Energy Laboratory (www.nrel.gov) in Golden, Colorado. NREL had an end of year seminar on the future of energy generation in the United States, 2020 - 2050.
As we continue to talk about energy this month, we would be remiss if we do not bring up hydrogen as a potential fuel. Of course, hydrogen is the "perfect" fuel for combustion, for the "exhaust" is water (H2 + O => H2O). The problem in the past has been that it has not be plentiful or economical.
In a decade, I've moved from being a skeptic to saying some alternative energy sources just may be possible for our industry right around the corner.
Several times in this column over the years, I have told you to not demolish energy assets (that are in good shape) just because you stopped using them. Properly secure and preserve them and wait for policies to change. With an impending change in federal administrations here in the United States, expect an energy priority change within a year. This may come about by regulation changes or economics (the ranking of various fuel costs changing). These changes may be so severe they push some mills out of business.
This is supposed to be innovation and strategy month but up to this point, I have focused on innovation. Strategy is important, too, but strategy must be focused on solid science, statistics and mathematics. I have seen many strategic initiatives fail over the years. That does not mean we should stop doing them, it means we should make sure our foundation was solid.
We usually think of innovation as being creative and coming up with some gee whiz new idea. If you have been in business for more than a week, it is easier than that. Just use a critical eye to eliminate the unnecessary. The unnecessary comes in many forms.
There are many failures in innovation. One chronic failure to keep in mind is to be aware of your surroundings. You may think you have a fantastic idea. But if it is not obvious that it solves a problem or it is a solution more complicated than the original problem, it likely will fail.
Innovation is a process of the desperate and the opportunistic. There are countless examples through history where, with backs against the walls, innovators have broken through. The Internet, a solution in search of a problem, was probably the biggest innovation of all time, at least in communications. The paper grades that died, had they caught on early enough, may have survived in a better fashion than they did. However, it was not in the mindset of the people and entities involved to (a) perceive they were in trouble or (b) do something about it. So, within our industry, where will innovation come in the near future?
Finishing up... There are two extraordinary transient conditions at the present time. One is well under way, and the other is just around the corner.
Picking up from last week... With the push from landfill costs in Europe and the United States, plus the other drivers I have mentioned previously, manufacturers and scientists began to work in earnest on the performance requirements for recycled containerboard products.
This is a story of quality improvement, one that many today may not know.
I strongly suspect this observation has always gone along with becoming a septuagenarian, but I am not sure, having not been one before. Yet when I was younger, it seemed as though older employees around me were always griping about the younger generations (lazy, did not know what they were doing, caused a lot of rework and so forth). Well, this septuagenarian has some of the same feelings. I note at the same time that customer and competitive driven demands of our products dictate higher and higher quality levels. I heard it explained this way once...
I belong to a couple of old car groups on Facebook. Every week or so, some folks get into mild arguments concerning the quality of automobiles. The argument always goes the same--the cars of the '50's and '60's were much better than the cars of today. Are you kidding me? The cars of today are fantastic and, for all their gee-whiz features, cheap. A $3,500 car in 1965 would cost nearly $29,000 today. For that kind of money today you can get a car with better safety protection, air conditioning, lane control assist and so forth. I know, because I bought one for that kind of money last year. Same with paper. The paper, any grade, of 50 years ago was nothing compared to the paper of today. On a constant cost basis, today's paper is very, very inexpensive...
Friend of mine recently told me a story. It went like this. Decades ago, when he was first hired by a major company in this industry, his boss sat him down and said, "We have your salary wrong." This was a startling revelation. The boss went on, "When we hire young folks like you, we slot you into the system based on lots of studies and identifying attributes. But it is all just a guess. For sure, what you are worth is not reflected in your salary right now, for we are just not that smart. In a few months, we'll have a better idea of what you are worth. We may be overpaying you or underpaying you now, but the truth will come out in time..."
As we continue to talk about management issues this month, I want to bring up something that has been bothering me for a long time. It is simply this...in the human resources area I think well developed countries may be losing a competitive edge when it comes to thinking about the newer generations of employees, hourly and salaried, entering our mills these days. My thoughts are these...
Especially when I was a younger manager, I would lose sight of the objectives at hand. After all, forces are tugging you in a million different directions at once, it is easily to become distracted. Print this column and carry it around in your pocket if you need to for a while.
We will cover three topics this week.
I returned to the convention and another case was just wrapping up. Missed it. Sorry. The Great Mother said, "Any more cases?" The clerk responded, "Gup is here and has something to say about project management." "Come on up, Gup!"
Well, while the convention continues, I wanted to take some time to tell you a story I witnessed firsthand. This happened many lights, ago, so many I can't count them. What Mr. Jim doesn't know is that I have been following him around for a very long time, since he was a young man. One time, on a certain project, it was his job to escort Big Things called "contractors" across the sea to check out some equipment that was to be installed at his papermill. When I heard about this, I was certain I did not want to miss it. So, I slid in his briefcase, went home with him, and then along on the trip.
Our convention had finally settled down and we were getting a number of interesting stories. The Great Mother, after a break, ask if anyone had a story to relate, perhaps not from the pulp and paper industry, but that would be a lesson learned. Old Soc raised his tail...
Well, we finally got relocated to the new location. Much safer here than it was in that crazy city. The Great Mother called us to order. "Okay, rats, what do we have on the docket for today?"
Since last year, the Great Mother has passed on to Rat Heaven and we have a new cadre in charge. The word came out early in the year that we will be convening in a big city on a big lake in the middle of the country. There is a lot of pulp and paper business there and so many rats live fairly close at hand.
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