Episode 159 – Bridging the Gap between Project Management and Project Oversight

The podcast by project managers for project managers. Who looks out for the owner’s interest to achieve project success while maximizing project value?  In this episode Herbert Marshall talks about differentiating project oversight from project management. We look at some best practices for project oversight from the perspective of an owner or client. Table of Contents 01:44 … Nuclear Power Plant Project Role02:55 … Lessons Learned from Project05:00 … Defining Project Oversight06:09 … Project Oversight vs. Project Management Roles08:24 … Project Oversight Independence10:32 … Inspiration for the Project Oversight Guide13:40 … Oversight Advice16:36 … The Role of the Oversight Professional21:10 … When to Add an Oversight Professional24:30 … Project Oversight Examples28:30 … Get in Touch with Herb29:47 … Closing HERB MARSHALL:  So the project outcome as measured by an owner won’t exactly align with the success factors of the project outcome for the contractor, nor do the risks perfectly align.  And so that creates a natural tension between the two.  And if not done right, there ends up being winners and losers. WENDY GROUNDS:  Welcome to Manage This, the podcast by project managers for project managers.  We’re glad you’re joining us.  If you like what you hear, please visit us at Velociteach.com and leave us a comment on our Manage This Podcast page.  I’m Wendy Grounds, and joining me is Bill Yates. BILL YATES:  Hi, Wendy. WENDY GROUNDS:  Hi, Bill.  So today we have an interesting guest; don’t we? BILL YATES:  Yes, we do.  Herb Marshall is our guest.  He’s a retired nuclear-navy officer and a former lead field assistant for the Department of Energy, Naval Reactors.  He’s got over 20 years of experience overseeing major capital projects, including construction, fabrication, logistics, overhaul, operations, maintenance, and vessel decommissioning and dismantlement. Herb brings a wealth of knowledge to us.  And we’re going to talk about something that I bet none of our listeners have really considered before, and the topic is project oversight.  So we’re going to distinguish or delineate project oversight from project management and talk about this gap that Herb has seen in the marketplace with projects, which is many times we don’t really have someone representing the owner.  So we’re going to talk about that with Herb. WENDY GROUNDS:  Yes, it’s going to be interesting.  And Herb wrote a book.  It’s called “The Project Oversight Guide.”  And we’re going to talk to him a bit more about that, as well.  Hi, Herb.  We’re so thrilled to have you join us today. HERB MARSHALL:  Thank you for having me. Nuclear Power Plant Project Role WENDY GROUNDS:  To start off with, let’s get a little bit about your background.  You were previously hired as the chief architect of the project oversight model for a billion-dollar decontamination and dismantlement of a U.S. commercial nuclear power plant.  Can you describe your role on that project? HERB MARSHALL:  Oh, sure.  Well, I was brought in when they were struggling in the beginning, and they decided we need some subject matter expertise if we’re going to oversee this contractor doing this decommissioning while we’re retaining the nuclear license.  So I began where you probably need to begin, which is designing the organizational structure, working with the leadership, writing the job descriptions for the oversight staff and management positions.  And then I worked with various department heads and wrote about 20 or so of the protocols and processes, developed the key performance indicators, the reporting structure, the project management manual, and developed and administered about 40 hours of training.  I also developed an Oversight Professional Certification Program and chaired the final certification oral boards for those would-be candidates. Lessons Learned from Project WENDY GROUNDS:  So what was your lessons learned from this experience? HERB MARSHALL:  Boy, it was an eye-opener.  The lessons learned were actually the genesis for the book, the Project Oversight Guide, “POG” I affectionately call it.  And I would say there’s four primary lessons learned from my experience. First, there’s no textbook out there on the best practices for project oversight, from the perspective of an owner or client.  And if you do a search online, you’ll find there’s no shortage of literature on expertise and the art form of project management and its tools and techniques.  So with there being no real standard for owner oversight, my opinion is owners are disadvantaged by this asymmetric information deficit as it gives contractors and project teams a built-in inherent advantage over their clients.  So I really wanted to close the gap on that. The second thing is that policies, procedures, and protocols are no substitute for oversight culture.  So, you know, if you know my history at Naval Reactors, they have a “75 years of oversight” culture.  And that needed to be paired with procedures and processes in order for it to be effective. The third thing I would say is that the leadership there tended to think that by virtue of a person being a smart and high-performing engineer, that made them competent to fulfill an oversight role.  And most folks don’t realize that oversight is somewhat its own discipline requiring experience and training and a firm grasp of its best practices.  So that was an important lesson that drove me to wanting to write the book. And lastly I’d say most of the leadership sees oversight as overhead, when it’s actually a value center that pays for itself, much like project controls does.  Studies have shown you get a 3X return on your project controls if you spend the money on it.  So those are my four primary lessons learned. Defining Project Oversight BILL YATES:  Those are great.  And we want to spend the majority of our time talking about that book, and I appreciate you calling it the “The POG.”  That’s the way we’ve been affectionately referring to it as we’ve been going through and reading and taking notes.  And it’s called “The Project Oversight Guide:  An Owner’s Guide to Oversight of Capital Projects, Project Teams, and General Contractors for Delivering the Expected Return on Your Investment.” Now, one of the first things that we want to talk about is because we agree with you.  When you search, when you look, there’s tons of information out there about project management, the role of the project manager, program management, the role of the PM in that regard, but not about project oversight.  So first, give us a definition.  How do you define project oversight? HERB MARSHALL:  As a straight definition, I would define it as advocating the owner’s interest in order to achieve the owner’s project success factors while maximizing project value by providing a risk benefit, a certainty benefit, and a quality benefit.  And those three benefits add up to the value of oversight and how it saves clients and owners money. Project Oversight vs. Project Management Roles BILL YATES:  Excellent.  You made that distinction between project management and project oversight.  So spin that out for our listeners.  What’s different with the role of project oversight versus project management? HERB MARSHALL:  Well, the example I like to use is that of a homeowner.  If you’re a homeowner, and you are going to build an extension on your house, and you pay this fixed-bid contractor to build that extension on your house, no homeowner is going to vacation in the Bahamas and drink piña coladas on the beach and wait for the contractor to tell them that the extension is done.  Right?  That homeowner has an interest in ensuring the safety of the home because his children are going to play there.  He has an interest in the stewardship of the money, so it’s not poorly spent.  He has, for resale value, he has an interest in that they comply, whatever their governing rules are, building inspectors and the like.  And he also cares that it’s done prudently.  So those are the foundational elements of oversight. And the other thing I would say is that project management does do some oversight; right?  In “The POG” I lay out that there’s elements that go into project management that are related to oversight functions.  But it’s really a collaborative duty.  Anyone who’s been in like a major capital project knows that a first-line supervisor has to oversee his folks.  But half the time he’s chasing down supply chain and receipt inspection and dealing with personnel issues, and there’s that little bit of time you have to go to the site and make sure they’re doing what they’re supposed to be doing.  So in that respect, oversight as a collaborative duty is secondary.  But for an owner, oversight is their primary role.  And they need to be able to do that in such a way as not to usurp or interfere with the contractor self-governance. BILL YATES:  Got it.  And you bring up a key word here, which is owner.  Well, the analogy of the homeowner because, yeah, the project teams, you know, when I’m building a home or a major addition, project teams come and go.  They all may have different project managers.  Maybe there’s a general contractor overseeing the whole thing, but at the end of the day, they leave, and it’s my house.  I’ve got to live in it.  Right?  So to your point, I’m not drinking piña coladas on the beach.  I’m down there looking at the jobsite, and I’ve got this interest. HERB MARSHALL:  Right. Project Oversight Independence BILL YATES:  And one of the keys that I like about this is this oversight role is serving the owner.  Therefore, they need to be independent from the project manager, independent from the project team.  Talk about the need for that independence. HERB MARSHALL:  When you think about it, the quality control is built into the PM.