By: Charles Carnes, Senior Partner; Brian Cole, Principal; Krystyna Riley, Senior Consultant
Late scope jeopardizes turnaround schedules, adds additional costs, and increases safety risks. Here’s what you can do about it.
Even the best-planned turnarounds experience some late scope; discovery work, compliance work, and last minute process optimization opportunities are par for the course. In highly disciplines companies it’s common to anticipate late-scope of up to 7%, which is often seen as a best in class industry benchmark.
Our concern in this post however is how to avoid unnecessary late-scope; jobs that should have been identified and scoped ahead of time, but weren’t. The business case for addressing this issue is clear; late scope typically costs 3–5 times what it would have, had it been submitted on time.
So What Can You Do About Late Scope?
Based on our experience with clients, here are five actions you can take to help reduce late scope: (1) Set an aggressive but achievable goal, (2) Establish a clear policy and approach for managing late scope, (3) Systematically remove barriers and provide support, (4) Review milestones and leading indicator data, and (5) Adopt a rigorous late scope review process.
Let’s take a look at each in more detail:
- Set an aggressive but achievable goal. Goal setting is a critical first step because it requires leaders to align on the case for change and agree on “what good looks like”. A clear goal helps focus the organization on the relevant activities and behaviors for reducing late scope. Behavioral science research shows that goals promote a more intensive work effort on the part of employees; they are more likely to persist through setbacks and constraints if they have a clear idea of what they are trying to achieve. Setting a goal is the first step in changing the behaviors that impact late scope submission. New results require new behaviors.
- Establish a clear policy and approach for managing late scope. A clear goal provides the WHAT but employees need to be clear about the HOW as well. This starts with leaders aligning on, and communicating, how scope should be submitted, reviewed and approved. This includes specific guidance on how to handle discovery work, compliance jobs, and last minute process optimization opportunities. Leaders have to answer the question, “What kinds of work scope can, and should be, identified in advance?” Strong alignment up front about the HOW enables more effective performance review discussions later. Creating a culture that embraces a disciplined planning process starts with clearly understood and well communicated expectations.
- Systematically remove barriers and provide support. Clear goals and expectations are important yet not sufficient to achieve performance breakthroughs. Leaders must be vigilant about removing obstacles that get in people’s way and providing the support they need to start planning sooner and stay on schedule. Achieving better results requires leaders to continuously identify and address the obstacles that prevent on-time scope submission – broken work processes, underperforming technology, skill gaps, competing priorities, time and resource constraints, etc. A high performing Turnaround Steering Team is an excellent forum for accomplishing this (Please see our post on turnaround Steering Teams here.) For example, one of our client’s Steering Team implemented a 5-year look-ahead process to help make future resource demands visible and ensure that key studies and investigations are started and completed on time.
- Review milestones and leading-indicator data. Given the long time frame for planning and executing turnarounds, it’s critical to have reliable leading indicators for those activities and behaviors that drive on time scope submission. For example, are your studies and inspection programs started and completed on time? Do your Turnaround planning teams form and kickoff as planned? Is work progressing at a reasonable rate through your scoping, planning and scheduling processes, or does it arrive at each step like an overflowing dump truck? The systematic review of leading indicators by a Turnaround Steering Team adds tremendous value; regular data-based performance reviews can alert them to changes in performance and the need for leadership action on their part (e.g., feedback, coaching, resource allocation, barrier removal). (Please see our post on turnaround Steering Teams here.)
- Adopt a rigorous late scope review process. Making late scope approval difficult with high hurdles for endorsement is important in shaping new behavior and building world class planning discipline. It’s incumbent for leaders to establish a standardized approach for assessing risk and a stringent late scope review process for evaluating the cost implications of added scope. In addition to delivering immediate value for each turnaround, a disciplined review process also helps build business literacy about the true impact of late scope and implications for cost, resources, schedule, and lost-profit opportunities.
Reducing late scope submission starts with a focus on changing work practices and cultural norms for process discipline and not just managing one turnaround after another. For leaders that means setting clear direction, identifying and removing barriers, reviewing the right leading indicators and conducting rigorous review of late scope.
Next, our turnaround series will look at the critical task of managing contractors for optimal turnaround execution.