Management of construction projects in Russia: Questions and answers. Part 1

This article opens a series on the applicability of project management in Russian construction and addresses four fundamental questions that often cause confusion. The author groups project management issues into three categories: organizational matters, such as structure, authority, and changes; mathematical matters, such as time and cost, with specific methods including critical path analysis and earned value; and people-related matters, such as motivation, communication, and client relationships. Standards are presented not as dogma, but as collections of “best practices” that require adaptation and offer no guarantees. Project management is defined not by the presence of procedures or a project management information system, but by five key features: identifying projects with objectives, appointing accountable project managers, forming teams, providing project-based incentives, and planning and monitoring by project. Formal procedures are needed only in the areas most prone to conflict, including contractors’ terms of reference, work acceptance, KPIs, schedules, and budgets; small teams can work more effectively through shared informal understandings. Overall, project management maturity in Russian construction is increasing, but actual effectiveness varies greatly from company to company.

Despite the significant number of large-scale projects and megaprojects in the construction industry, many construction industry managers are skeptical about project management technologies. You can often hear the following opinion: "All this is good, but it is not applicable in our realities."

Are design technologies really ineffective for managing construction projects in Russia?

To answer, you first need to sort out the basic questions, in the understanding of which there is colossal confusion, which is often where all the problems begin.

In the past article I analyzed when project management is applicable in construction. In this and subsequent articles I continue to analyze issues according to the principle "from the general to the specific."

What is "project management"?

Project management, as a field of management, considers very different issues in its essence, which I logically divide into 3 groups:

"Organizational" issues. For example, building an organizational structure, distribution of powers and responsibilities, change management process. Here, the order of interaction between project participants is at the forefront. These issues typically need to be addressed at the level of the entire organization. There are no "only right" solutions for each issue. There are different options that have been proven in practice, each of which has its own pros and cons. Which ones to choose - you will need to decide for yourself.
The questions are "mathematical". It's mainly about time management and cost management. There are specific formulas and algorithms here, for example, the critical path method and the earned value method.
"Humanitarian" questions. Here I highlight topics about personnel management and motivation, building relationships with the customer and other persons influencing the project, communications. Here, project management standards often refer to external sources, such as motivation theories. To be honest, there is no substitute for practical experience in these matters.

What can you learn from project management standards?

Project management is not an exact science. There are different standards for project management.

The point of the standards is that the problems and questions that arise during the implementation of projects have already arisen many times with other people, and a lot of experience has been accumulated in solving them, which you can use. In a formalized form, this experience is called "best project management practices."

That is, all existing project management standards actually contain fairly general recommendations that need to be "grounded" to the specifics of the company and its projects. No project management standards establish mandatory requirements for the regulation and use of information systems in construction project management.

I emphasize that following "best practices" increases the likelihood of project success, but doesn't guarantee you anything. If you hear from someone about a "unique technique" that guarantees that you will definitely implement all projects successfully, know for sure: either you are being scammed, or this is a person in front of you who has never in his life led a project with real responsibility for the result.

What does it mean to "implement project management in a company"?

If you enter the search query "construction project management" into Yandex, you will see a lot of materials about project management information systems. And this confuses many people, creating the impression that project management in construction is the use of an information system.

There is also a misconception that the introduction of project management in construction means the development of a mass of regulations and formalization of work.

In fact, the point is something else: project management = work for results. I can highlight the following indicators that a project approach is used in construction project management:

1. Projects are highlighted in the work of the organization. Their goals and results are defined.

2. Employees have been appointed who lead projects from start to finish and are responsible for the final result. The exact title of the position may vary: it may be a project manager, it may be a "chief of construction", and in a design institute this role may be performed by a PI.

3. Project teams are formed. Employees performing work on the project directly or indirectly ("matrix scheme") report to the project manager.

4. Project motivation is applied. Employees have a bonus portion of their income, which is tied to achieving or not achieving success indicators for construction projects.

5. Planning and monitoring is carried out in the context of construction projects. That is, for example, cost control is carried out not based on the annual use of the company's budget, but on deviations from the basic budgets of the construction project.

These are the basic principles of applying the project approach in the management of construction projects; for their implementation, information systems can be used and regulations can be implemented. But not necessarily. I know a company that does not have any regulations, and the only planning program is Excel. At the same time, they have implemented all of the above principles, and they are very successful in their construction projects.

It is also important to note that not all construction project management principles need to be applied "together" - for example, you may have dedicated project teams, but not apply project motivation.

When is regulation needed in construction project management?

Many Russian builders are characterized by an extremely skeptical attitude towards any formal regulations and procedures: We always agreed "on principles" and everything was fine, why these pieces of paper? They just get in the way of work....

Indeed, formalization usually increases the time frame of a construction project (sometimes by several times). And work built on trust, personal relationships and informal agreements is (without irony, tested in practice) the most effective option for interaction in a team. True, under one condition - as long as these very informal agreements are respected. And they can be observed either in a small team, or between people who have known each other for a long time.

This will not work in a large team.

It will start: "You didn't tell me this", "I didn't promise you this", "I am not me, the cow is not mine.".. In general, lies, "changing shoes in the air" and shifting responsibility onto each other. No options. Such is human nature (in any country and at any time) and it is impossible to change it. Therefore, the management of large construction projects requires formal rules, well-thought-out and well-written.

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Regulations with a set of general abstract theses do not provide any value for managing a construction project. There is also no need to formalize every action in a construction project - the most potentially conflicting issues should be formalized first:

Formation of technical specifications for contractors;
Selection of contractors;
Acceptance of work (signing of acts) for contractors;
Hiring/dismissing employees;
Determination of KPIs and payment of bonuses;
Formation of a schedule;
Formation of budget/financial model.

For each of the listed points there must be specific and unambiguous answers to the questions: Who does it? Who do you need to coordinate with? Who approves (makes a decision in the event of a contradiction between different agreeing parties)? In the management of medium and large construction projects, these things must be written down on paper. Otherwise it's a mess.

Does project management work in construction projects in Russia?

It all depends on the specific company - in some places it works, in others it doesn't.

If we talk about general trends in project management in construction in Russia, I can formulate the following:

The project approach is often used (the role of the RP is highlighted, there is project motivation) de facto in small construction and engineering companies. As a rule, these companies do not have cumbersome regulations and complex digitalization, but they do not need this.
Large companies almost always de jure (on paper) have implemented project management systems, but the effectiveness of their practical application varies greatly depending on the specific enterprise. What is written on paper does not always correspond to the realities of life.
In general, the level of maturity of companies and the level of application of project management technologies is growing. If in the early 2010s the same schedule network planning was looked at as something outlandish, now it is already a standard tool used in most large construction projects.