Managing Risk for Successful Capital Projects Thursday, August 10, - - PowerPoint PPT Presentation

Managing Risk

for Successful Capital Projects

Thursday, August 10, 2017

Colliers Project Leaders 2016

• 1. Pre-Planning
• 2. Initiation & Planning
• 3. Execution
• Design
• Construction
• Occupancy
• 4. Project Closure

Agenda

2

How to add certainty

Colliers Project Leaders 2016

Why Us?

Former Administrator and Director of LTC with Peel Region. The Region of Peel serves a population of 1.4 million residents in urban, suburban and small town environments. Peel operates 5 LTC Homes and on site CSS.

• LTC and CSS operations experience
• Facility design lead
• Small projects Project Manager
• Large projects sponsor
• Governance council liaison
• Renovation/redevelopment/new construction

3

Carolyn Clubine Carolyn is currently supporting a range of not for profit agencies that serve the aging population, offering management and project support. She holds a Fellowship with the Canadian College of Health Leaders and is on the faculty of the Administrator Leadership Program that AdvantAge Ontario hosts each year.

Colliers Project Leaders 2016

Why Us?

• Established in 1989 (as MHPM Project Managers)
• 400 employees in 25 offices across Canada
• Specialize in building projects and accommodation plans
• Development Solutions (Business Cases, Feasibility Studies, Options

Analysis)

• Planning & Programming
• Project Management
• Furniture & Equipment Planning and Procurement
• Transition Planning, Move Management

4

Colliers Project Leaders

• 10,000 capital projects to draw upon; best practices & lessons

learned

Colliers Project Leaders 2016

Poll

5

What roles are represented in today's webinar?

• a. Administration incl. Finance, QI, Risk
• b. Architect
• c. Project Manager
• d. Building or Facility Manager
• e. Clinical or Support Services Manager

Colliers Project Leaders 2016

Definitions of Risk

6

A project risk is a future event which may or may not occur. A project issue is being managed in the present.

• The effect of uncertainty on objectives (ISO 31000)
• Any event that may endanger achieving an objective partly or

completely

• Uncertainty which is present in all projects

PRE-PLANNING PHASE

Colliers Project Leaders 2016

Risks in the Pre-Planning Phase

8

Business Case Assumptions

Top 3 Shortcomings: 1. Lack of Risk Analysis (including contingencies) 2. Inadequate Long-Term Costs, eg. maintenance & renewal 3. Comprehensiveness of Costs, eg. approx. 20% for project ancillary costs

Colliers Project Leaders 2016

Stories from the Trenches……

• The LTC Home was 236 beds. It was decided to renovate the building and

reduce to 142 beds

• This called for a phased approach to allow for concurrent operations and

extensive construction.

• Phase 1 required that the Home reduce from 236 to 120 prior to

commencement of site work.

• Admissions were ceased one year ahead of start date
• Reduction was not achieved
• Site work was delayed 4 weeks which incurred schedule delays

9

http://www.peelregion.ca/ltc/sheridan/index.htm

Colliers Project Leaders 2016

Risks in the Pre-Planning Phase

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• Retrofit vs. New Build
• Site Selection Decisions
• Due diligence – expert advice/consultants
• Size
• Site Services
• Building Layout and Operational Implications
• Construction Model
• Phasing, revenue implications
• Procurement & contracts

Colliers Project Leaders 2016

Stories from the Trenches……

• Building Condition Audit raised red flags
• Invasive assessment of the current core building showed that remediation
• f failing elements would not be money well spent
• Internal decision reached that the building should not be renovated, but

replaced.

• Council decision was required, and this raised the discussion of whether

to continue to operate

• Sensitivity to misunderstandings (staff fear of job loss, and resident fear of

closing) had to be carefully mitigated through a Communications strategy

11

• http://www.peelregion.ca/ltc/peel/index.htm

Colliers Project Leaders 2016

Poll

12

In your regular operations what is your greatest vulnerability

• a. HR
• b. Supply chain
• c. Utilities
• d. Neighbours/Community
• e. Press

Colliers Project Leaders 2016

Risks in the Pre-Planning Phase

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Programming

• Doing things the same way – not looking at processes and

LEAN opportunities

• Achieving your goals and addressing your challenges –

defining solutions!

• “Get your house in order”
• IT as an enabler

Colliers Project Leaders 2016

Stories from the Trenches…….

NEW LTC Home - Design of workflow from a clean slate

• Supplies located throughout the building – create a cage in basement

to create a delivery system

• Laundry pickup in utility rooms – create a chute system
• Elevators shared by all – built a “back of house” service elevator
• Wired all rooms for IT cable – but never used due to the rapid

development of wifi

14

http://www.peelregion.ca/ltc/malton/index.htm

Colliers Project Leaders 2016

Risks in the Pre-Planning Phase

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• Transition strategy required
• Change management required

Colliers Project Leaders 2016

Stories from the Trenches…….

Small 26 bed Nursing Home was being closed

• Residents were in “D” like conditions with no private space and shared

toilet facilities

• Staff unfamiliar with typical LTC buildings/resources/ workflow
• With additional licenses it was replaced with a new 64 bed
• Change management planning was exhaustive!
• Work Routines were written and practiced
• Resident relocation was staged to account for psychological impact of
• pen space, available choices

16

http://www.peelregion.ca/ltc/davis/index.htm

Colliers Project Leaders 2016

Poll

17

In thinking about your redevelopment plan what is your greatest concern?

• a. financing
• b. managing the demands in addition to operations
• c. stakeholders
• d. procurement
• e. contractor relations

INITIATION & PLANNING PHASE

Colliers Project Leaders 2016

Risk Management Plan – Roles & Responsibilities

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Who is the lead?

• Internal (Project Sponsor, CFO, Risk Manager)
• External (Colliers PM for Valley Manor)

Who is on the Risk Management Team?

• Project Manager
• Architect
• Engineers
• Contractor
• CFO
• Plant Operations/Home’s Engineer
• Clinical Operations representative
• IT
• Procurement

Colliers Project Leaders 2016

Risk Management Plan

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What are their responsibilities?

Project Manager Architect/ Engineers Comm. Agent General Con- tractor Plant Oper. Mger Exec. Clinical Rep IT Procure

• ment

Planning X X Identify X X X X X X X X X Qualify X X As needed X X X X Quantify X X As needed X X X Plan Responses X X As needed X X X X X Monitor & Control X X As needed X

Colliers Project Leaders 2016

Risk Management Plan – Analysis

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Probability! Impact!

Colliers Project Leaders 2016

Risk Management

22

Certain Rare Insignificant Catastrophic

Consequences Likelihood

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Risk Management Plan

23

Risk Register

Colliers Project Leaders 2016

Poll

24

Is it easier for you to identify your risks or is it easier to plan the mitigation once you know what the risks are

• a. identify risks
• b. plan the mitigation

Colliers Project Leaders 2016

• Set up the Project Structure
• Governance, management involvement

Staff Committees

• Family, Resident & Community Involvement
• Continuity & succession planning
• Set up the Project Controls & Tools including……….
• Baseline schedule
• Baseline budget
• Initial risk register & actions to mitigate, eliminate or avoid risks
• Monthly updates & reporting……

Lack of Project Structure & Controls

25

Colliers Project Leaders 2016

Poll

26

How many staff in your senior management group will play a direct role in the project execution?

• a. 1
• b. 2 to 4
• c. 5 or more

Colliers Project Leaders 2016

Role Clarification for your Stakeholders

27

Project Element: ______________ Activity : _____________________ Communication about commencing this work: _____________________

Name/Position Responsible Accountable Consulted Informed Notes Executive Director Management Staff Service staff Board Clients and caregivers Others External Partners

Colliers Project Leaders 2016

Initiation & Planning

Project Charter – an Important Tool

• Clear definitions – understood and agreed upon
• What will success mean?
• Project Sponsor/Authority
• Organizational Structure
• Project policies and procedures
• Roles & Responsibilities

Budget

• Schedule (Milestones)
• Assumptions
• How will Fixtures, Furniture & Equipment be handled?

28

Scope

Colliers Project Leaders 2016

Carolyn’s Project Charter Template

29

Colliers Project Leaders 2016

Initiation & Planning

Scope Creep!

Strategies

• Project Charter – clear definition of scope
• Use a Change Request Form; Change Tracking Log
• Define protocols & authority levels
• Tracking and monitoring changes

30

Scope

EXECUTION PHASE - DESIGN

Colliers Project Leaders 2016

Risk Management Plan - Timing

32

• Iterative
• Monthly updates
• Add time sensitive triggers to the

project schedule!

Colliers Project Leaders 2016

Risk Management Plan – Response Strategies

33

• Avoidance – Hiring a PM! Putting controls and

checkpoints in place.

• Mitigate – Design Coordination Meetings;

Communications with neighbours

• Transfer – Contractor to purchase furniture and

equipment.

• Accept – Archeological findings

Colliers Project Leaders 2016

Design Stage

34

User involvement & functionality.

Strategies:

• Sign-offs at the following key

milestones:

• Block/Sketch Plans
• Room Data Sheets
• 50% Working Drawings
• 95% Working Drawings
• Project phasing
• Detailed minutes!!

Colliers Project Leaders 2016

Stories from the Trenches

35

Testing the design

Colliers Project Leaders 2016

Design Stage

36

User involvement & functionality.

Strategies:

• Sign-offs at the following key

milestones:

• Block/Sketch Plans
• Room Data Sheets
• 50% Working Drawings
• 95% Working Drawings
• Project phasing
• Detailed minutes!!

Colliers Project Leaders 2016

Design Stage

37

Lack of coordination between consultants

• Architect & Engineers – Design

Coordination Meetings

• IT Consultant
• Security Consultant (door hardware!)

Strategies:

• Design Coordination Meetings &

Minutes

• Constructability/Bid Document Review

Colliers Project Leaders 2016

Stories from the Trenches……..

• Inclusive Architect scope vs. independent sub-

consultants

• Owner’s Project Manager vs. General Contractor

38

Project Manager vs. General Contractor

Colliers Project Leaders 2016

Design Stage

39

Financial Risks Strategies:

• Regular professional cost estimates
• Capital vs. operating costs
• Value engineering for overages
• Updating baseline documents ie.

monthly tracking & reportin

• Forecasting costs
• Good set of coordinated tender

documents

EXECUTION PHASE - CONSTRUCTION

Colliers Project Leaders 2016

Poll

41

In thinking about execution of the redevelopment what is your greatest concern?

• a. contractors
• b. labour force
• c. land acquisition
• d. operational changes
• e. stakeholders

Colliers Project Leaders 2016

Inexperienced Contractor & Management Team, Poor Contract

Construction

42

Strategies:

• Prequalification of General Contractors – want assurance of:
• Contractors staff assigned to the project
• Experience with healthcare or residential projects & experience
• n operational sites
• Proof of bonding, insurance capabilities

Colliers Project Leaders 2016

Stories from the Trenches……

• Phased approach flagged the poor performance of dishwashers

in satellite kitchens, poor ventilation specs

• Decision regarding cost of change orders for additional phases

43

Colliers Project Leaders 2016

Stories from the Trenches: Risk Plan Revisited

Changes and change orders must be managed well before they occur

• Tender specs were very clear about product

substitution

• Windows substitution request by constructor
• Negotiation
• Agreed on independent testing of the substitute, set

performance parameters

• Product acceptance

44

http://www.peelregion.ca/ltc/pines/index.htm

Colliers Project Leaders 2016

Late/Not Meeting Schedule

Strategies

• Quality of contractor’s schedule
• Frequency of contractor’s

schedule updates

• Cash flow projections
• Long lead items
• Study impact of change requests
• n

schedule

• Consider alternatives, substitutes
• Phasing

Construction Stage

45

Colliers Project Leaders 2016

Delay Claims

Strategies

• Demand high quality contractor’s

schedule

• Demand contractor’s schedule

updates, at least monthly

• Keep thorough records, site

photographs

• Make expeditious decisions
• Provide approvals in a timely manner
• Limit owner-requested changes

Construction Stage

46

Colliers Project Leaders 2016

Stories from the Trenches……..

Change Order Management Effectiveness

47

Colliers Project Leaders 2016

Construction Stage

48

Stakeholders

Strategies

• Thorough communication & stakeholder management plan
• Website, number to call and leave messages
• Email to write with messages
• Regular meetings with the muncipality and regulatory agencies
• Change management support for staff & residents & families

EXECUTION PHASE - OCCUPANCY

Colliers Project Leaders 2016

Risks – Operational, reputational, financial

• Staff
• Families
• Residents

Occupancy Planning

50

Colliers Project Leaders 2016

Stories from the Trenches……

Communications Plan Written and Maintained

• Regular newsletters and updates
• Video tours of the progress
• Recognition of sense of entitlement – staff and

residents

• Chronicle and Celebrate milestones
• If you think it someone else has tweeted it – get

ahead of the issues.

51

Colliers Project Leaders 2016

Transitioning

• Policies, Procedures
• Emergency preparedness

Occupancy Planning – Strategies

52

• Start at least one year in advance
• Appoint an In-house Lead, backfill their time
• Consider a Readiness Consultant
• Communications!
• “A Day in the Life”
• Create training manuals
• Create move packages
• Work Flow
• Orientation & training plan

Colliers Project Leaders 2016

Numerous challenging requirements for occupancy

• Building Department approval
• Fire Department approval
• TSSA approval
• LEED testing and documentation
• Furniture & Equipment & Information Technology delivery & installations
• Ministry Pre-Occupancy Inspection

Strategies

• Scheduling
• Contingency for slippage
• Daily or twice weekly coordination meetings
• Strong municipal relationships

Occupancy Planning – Start Early!

53

Colliers Project Leaders 2016

Ministry Pre-occupancy inspection vs. Compliance Branch

Stories from the Trenches…….

54

CLOSURE

Colliers Project Leaders 2016

Importance of Commissioning & Close-out

• Testing and balancing systems
• Testing equipment
• Turnover of manuals
• Training for Facilities &

Operations Staff Strategies

Closure Stage

56

Colliers Project Leaders 2016

Fires can happen at the most unusual times and ways

Stories from the Trenches……….

57

Municipal Fire Code Specifications that were not anticipated Warranties for product purchased well before opening

Colliers Project Leaders 2016

Risk and Risk Management – Key Success Factors

58

• Be a systematic and structured process
• Be dynamic, iterative and responsive to change
• Be capable of continual improvement and enhancement
• Be continually or periodically re-assessed
• Be an integral part of project processes
• Be part of decision making process
• Explicitly address uncertainty and assumptions
• Be based on the best available information
• Be tailorable
• Take human factors into account
• Be transparent and inclusive

Q and Eh!

Colliers Project Leaders 2016

Poll

60

In which areas do you have information gaps that keep you awake at night?

• a. procurement
• b. stakeholder management
• c. cost monitoring
• d. conflicts between the architect and the

constructor

• e. scheduling

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