ICE Representatives Elena Rinaldi, Jen Hopkins and ICE Student Ambassador Sophie

Malcolm will be with us on Monday 9th October.

Please feel free to join the discussions at 12:30 and lunch time session at 1pm.

12-12:30pm – Signing of the ICE Academic Partnership Agreement – Venue: Head of

Schools Office.

12:30 – 1pm – Discussion on Membership routes for Academics – Venue: Light

Structures Laboratory OG.031 DKB

1-2pm – Lunch and discussions with Stages 3 and 4 students – Venue: OG.12 DKB

2-3pm – Tour of the School and University. ICE Delegation and staff who are interested.
 Project Management – Lecture 3
A Project Manager:

• Pragmatic – deals in a sensible and realistic manner

• Decisions based on experience not theory – Failure > Success
• Sees the big picture and fine detail
• Know the logic of sequence
• Wants to exceed client’s expectations
• Appreciates that clients and stakeholders don’t always agree
 Project Management – Lecture 3
Scope for change and Cost of Change Relationship

(time scale of each will vary)

 Project Management – Lecture 3
What Influences Strategy?

Feasibility:

• The degree to which the requirements, design or plans for a

system or components can be implemented within time and to
the desired quality under existing constraints

• The practical extent to which a project can be performed

successfully

• Is it worthwhile?
 Project Management – Lecture 3
Feasibility
Cost-Effective Solution

Business Technological
Constraints Constraints
 Project Management – Lecture 3
CIOB Code of Practice for Project Management

Feasibility: “Initial project development and planning carried out

by assessing the client’s objectives and providing advice and expertise
in order to help the client define more precisely what is needed
and how it can be achieved”

i.e. the project is deliverable and financially viable

“If it is considered that the objectives are of a complexity or size to
merit the engagement of a PM, the appointment should ideally be
made as early as possible*, preferably after approving the project
requirements…….this will ensure the benefit of the special expertise
of the PM in helping to define the objectives and any known
constraints”

* Board Decision. Avenue of communication between PM and Board

 Project Management – Lecture 3
Experts in 1 Experts in 2 Experts in 3 Experts in 4

Feasibility Feasibility Feasibility Feasibility

Study 1 Study 2 Study 3 Study 4

Project Manager

Feasibility
Report
 Project Management – Lecture 3
CIOB Code of Practice for Project Management

A detailed feasibility study should include:

• Evaluation of Options – perhaps the client hasn’t thought of

• Environmental Impact Assessment
• Site(s) Assessment
• Planning Requirements/Constraints
• Commercial Assessment
 Project Management – Lecture 3
CIOB Code of Practice for Project Management:

A detailed feasibility study REPORT should include:

• Scope of Investigation (from project brief) including establishing

service objectives and financial objectives
• Studies on Requirements and Risks
• Public Consultation
• Wider Site Assessment – e.g. Geotechnics
• Environmental Impact Assessment
• Waste Management (Reuse, recycle, reject) (Disposal Costs)
• Noise, water pollution, air quality, energy,
• Visual Impact, protection of natural environment-flora/fauna
• Emergency Plans
………….
 Project Management – Lecture 3
CIOB Code of Practice for Project Management:

• Health and Safety Study – CDM Regs and all other HS Regs applicable
• Legal requirements/constraints
• Estimates of capital and operating costs, demolition included
• Is funding available?

The Project Manager:

• Co-ordinates specialist info and specialists themselves.

Note: PMs don’t know everything
• Report conclusions and recommendations – other options!
• Include a risk assessment for each option
• Compare life cycle costs for each option
• Draft a master schedule for each option including cost and time
• Determine Contractual Procurement Route - Major Strategic Aspect
 Project Management – Lecture 3
Policy – Strategy - Tactics
CONCEPT
Means – Strategy - Ends

DEFINITION From the Greek, Strategia meaning ‘Generalship’

In military terms - maneuvering troops into

position: Plan before Action (subject to change
dependent on exterior factors)

“The first casualty of war is…” TRUTH STRATEGY

 Project Management – Lecture 3
From George Steiner: • Strategy is what top management does
that is of great importance to the
organization
• Strategy refers to basic directional
decisions, regarding purposes and
missions
• Strategy consists of the important actions
necessary to realise these directions
• Strategy answers the questions:
What should the organisation be doing?
What are the ends we seek and how
should we achieve them?
 Project Management – Lecture 3
The 5 Ps of Strategy according to Henry Mintzberg

Plan - How to get from here to there

Pattern - Repeated actions over time, eg ‘High End’ strategies

Opposite true e.g. Property Developer involved in
Social Housing vs Expensive Apartments

Position - Decisions to offer particular products or services in

particular markets

Perspective – Vision and Direction of both project and organisation

Ploy – Outsmart the opposition

 Project Management – Lecture 3

Michael Porter - Competitive Strategy

• It’s about being different in the eyes of a customer

• Deliberately choosing a different set of activities to

deliver a unique mix of value
 Project Management – Lecture 3
Treacy and Wiersema (2011) Value Discipline Model
A strategy framework - better understand and execute on the one thing that you want your organization to be famous for

Value Management
(Value Engineering)

SERVEQUAL – Service Quality

SERVEPERF – Service Performance
Questionnaires with customers to improve performance
 Project Management – Lecture 3
Value Management

• Should start as a study within the Feasibility Stage, preferably

before ‘Design’ has advanced very far but should be visited at all
stages looking for most acceptable options

• Reviewed periodically with stakeholders eg a newly employed

contractor (Value Workshops)
• Closely linked to Risk Management
• Different options will bring different risk – negative and positive
(Threat and Opportunity)
• Value Management seeks to achieve all necessary functions at
the lowest total cost, consistent with the required levels of quality
and performance
 Project Management – Lecture 3
Value Engineering

http://www.designingbuildings.co.uk

In construction, and especially at the feasibility stage-

Value engineering…
“…consider the availability of materials, construction methods,
transportation issues, site limitations or restrictions, planning and
organization, costs, profits etc. Benefits that can be delivered include a
reduction in life cycle costs* improvement in quality, reduction of
environmental impacts etc. All will influence strategy
*The cost to purchase, own, operate, maintain and dispose of a facility
Whole life cost = Life cycle cost + income streams (WLC can be lower
than LCC)
 Project Management – Lecture 3
What is Strategy?

A complex web of thoughts, ideas, insights, experiences, goals,

expertise, memories, perceptions and expectations that provides
general guidance for specific actions in pursuit of particular ends.

Even blue sky thinking has a purpose and an outcome to be kept in view

NOT random, there is direction

What is Strategic Management?

Pearce and Robinson (2007) “…the set of decisions and actions that
result in the formulation, implementation and control of plans designed
to achieve an organization’s vision, mission, strategy and strategic
objectives within the business environment in which it operates”
 Project Management – Lecture 3
Context

The construction industry has become more sophisticated with rapid

technological change stringent regulations changing client needs and
concern for more quality and environmental soundness of projects
among other things.
These are compelling businesses to introduce new approaches and
strategies in their operations with organisations and their managing
partners currently shifting from strict return-on-investment evaluation
of business ventures to exploring value-added concepts of a strategic
nature (Betts and Ofori, 1992). The main goal for most of these firms is
that they must survive. Think about COVID!
Effective Strategy
Organisational Goals Organisational Survival
 Project Management – Lecture 3
How to realise an effective/successful strategy

Szulanski et al. (2005) This question is at top of agenda for most senior
managers

Previously, changes in the construction industry were predictable,

business boundaries were stable and well-defined

Today environmental dynamism is key. In other words: more and more

extranaeous issues are shaping the formation of effective strategies
that lead to competitive outcomes.

Pearce and Newson (2003): Organisations can choose to employ fast-

cycle deliberate visions OR throw plans to the wind and concentrate on
activities of lower organisational members for strategy to emerge.
 Project Management – Lecture 3
How to realise an effective/successful strategy

Doz (1992) - Understanding the process enable senior managers to

continuously influence the quality of the firm’s strategic position
through the use of appropriate decision processes and administrative
systems such as organization structure, planning, control, incentives,
human resource management and value systems

Historically, strategic management researchers have largely ignored the

construction industry. Hitt and Tyler (1991), Dess et al (1997) suggest
industry type may affect the complexity and style of strategy formation
processes

A lot of construction management research has previously focused

more on the project and less so on the business (Winch (1989), Betts
and Lansley (1993))
 Project Management – Lecture 3
How to realise an effective/successful strategy

Project success does not necessarily equate to enterprise success

(Cleland and Kimball, 1987).

Diverse strategies* needed for successful operation and continued

existence (Langford and Male, 2001)

*financial, technological, diversification, differentiation etc

 Project Management – Lecture 3
Diverse forms of strategy

Business
Strategy

Financial Operational
Strategy Strategy

Corporate
Strategy
HR Strategy IT Strategy

Technology Marketing
Strategy Strategy
 Project Management – Lecture 3
How have we (the business…)?
Increased Productivity?
Business Improved customer
Reduced Costs? Strategy
e.g. waste disposal Service/satisfaction
SERVQUAL/SERVPERF?
Financial Operational
Strategy Strategy

Utilised PGs, Corporate

apprentices?
Strategy
HR Strategy IT Strategy

Technology Marketing
Strategy Strategy
Increased revenues from
new products/services?
 Project Management – Lecture 3
Fundamental Questions related to Company Mission/Vision:

• Who are we?

• What do we do?

• Why are we here?

• What kind of company are we? Consultant, contractor, service

provider etc?

• What kind of company do we want to become? More stable?

• What kind of company must we become?

 Project Management – Lecture 3
Fundamental Questions related to Corporate Strategy:

• What is the current strategy?

• Are assumptions still viable?

• What is happening in the larger, social and educational

environments?

• What are our growth, size and profitability goals?

• In which markets will we compete?

• In which businesses?

• In which geographic areas?

 Project Management – Lecture 3
Fundamental Questions related to Corporate Strategy:
• What is happening in the industry, with our competitors and in
general? e.g. Change from construction-based to consultancy,
service provision etc.

• What products and services will we offer?

• To what customers/users?

• How are selling/buying decisions being made?

• How will we distribute our products/services?

• What technologies will we employ?

• What capabilities and capacities will we require? Can lead to buy-

outs
 Project Management – Lecture 3
Fundamental Questions related to Corporate Strategy:

• Which ones are core?

• What will we make, what will we buy and what will we acquire
through alliances?

• What are our options?

• On what basis will we compete?

 Project Management – Lecture 3
Strategy Schools of Thought
Strategy is….

• DELIBERATE – Planning for the future. Thought-through.

Anticipatory. If done carefully, can create advantages in the
marketplace. “Plan and Analyse” A bit “crystal ball”

• EMERGENT – Doing what you are good at but not static. A

platform to build upon. Comes from practice rather than
planning. “Craft the Strategy”

• ADAPTIVE – Employed by the most successful companies.

Responding to an unpredictable environment – Reactive to new
opportunities. Planning is irrelevant, future is uncertain. In a
volatile marketplace, need to act quickly. “It’s a jungle out
there!”
 Project Management – Lecture 3
Strategic Analysis and Competitive Strategy

Mintzberg (1990) – “….capture success, which includes finding out

what you are good at and matching it with what the world wants”

SWOT ANALYSIS

Opportunities Threats

Go on the offensive – Adjust – restore

Strengths make the most of strengths
these
Be defensive – watch Survive – turn things
Weaknesses
competition around
 Project Management – Lecture 3
Strengths Weaknesses
• Strong brand or reputation • Small R&D budget
• Quality processes or procedures • Poor financial capability/strengths
• Cost advantage through proprietary • Lack of marketing expertise
knowhow
• High employee turnover
• New Innovative product or service
• Low multi-disciplinary workforce
• Strong consultancy base

Opportunities Threats
• Removal of international trade barriers • New competitor in home market
• A new international market • Price War
• Market lead by weak competitor • Demand for competitor’s new innovative
product
• Less demand for competitor’s
product/service • High risk and change
• Mergers, joint ventures or strategic alliances • Low skilled Personnel
 Project Management – Lecture 3
Additional Reading:

• Rosen, R. (1995) Strategic Management: An Introduction

Pitman

• Thomspon, J. and Martin, F. (2010) Strategic Management:

Awareness and Change 6th Ed. Thomas Rennie

• Langford, D. and Male, S. (2008) Strategic Management in

Construction 2nd Ed. Blackwell Science