Managing a multi-million pound defence project with its intricate financial and technological complexities requires a stable project management structure, says Peter Fielder, managing director of performance excellence at BAE Systems.
BAE Systems is the second largest defence company in the world, with a presence in more than 100 countries and annual sales of £22.4bn last year. The company employs around 105,000 worldwide, and delivers a full range of products and services for air, land and naval forces. It is involved in some of the largest engineering projects in the world, including the F35 Lightning II, the Eurofighter Typhoon, the Astute Class submarines and the Queen Elizabeth aircraft carriers.
The man charged with looking after the 700 project managers within the organisation is Peter Fielder, managing director of performance excellence.
What are the key drivers of project management?
They vary. We are a global enterprise and we have different contracting arrangements, but we also have different contracting models for the different work we do. The important feature is that the customer has defined the output he wants and he wants that within time and to cost.
Is the project manager actually a part of the team?
Our project management company sits directly in the line management structure to generate value. Within the individual contracts that we agree with our customers, we have defined outputs and we relate those to sales values, which drive both profit and cash generation in the company.
Is there an advantage in having a project manager who is not involved in the heart and soul of the project?
Our model is an accountable model. We hold programme managers accountable for delivery of customer projects. We have an approach to project management that we refer to as lifecycle management and it provides a combination of earth, gate and regular reviews, and we have independent assessments as part of both of those processes, but we hold project managers accountable for the outcome.
Is the project manager always the team leader, the most senior person in the team?
Our programmes run as an organisational response. They have a design component, a production component, sometimes a sport component – the service part is a big section. So we have a team organisational response but the activities of that team are integrated, managed and overseen by the project manager.
How do you handle larger projects? Do you go with a single manager, or is it broken down into smaller projects?
A bit of both. Take a large programme such as Astute. We have a programme director for Astute; we also have project managers for each of the boats and within the design and first of class structures, we have specific people assigned to subsystems or sub-elements of the submarine.
As a global company, could you highlight any differences in the way your many projects are managed?
We run BAE Systems through what we refer to as our operational framework. Within our operational framework we set out our core policies and processes as well as other things like our organisation and so on. One of our core processes is lifecycle management, which is the framework for the management of the projects in our company.
Could you talk me through the way you would run a project?
Essentially we have two types of activity. There is an early-life set of activity where we will be bidding for new business, and then there is the delivery phase, which is post contract – the delivery of the contract commitments that we enter into.
Our approach under lifecycle management is to break that lifecycle down into phases and then have gate reviews to determine whether we have met a set of maturity criteria that we could proceed to contract. We also have regular reviews that manage the activities in between the gate and consolidate about eight mandated review processes.
How do you go about selecting project managers?
We have a career-development framework that sets out the career path that people will follow. Because much of what we do involves complex engineering, the main source of project managers are engineers. We then have a basis to help support the development of people, both in terms of training them in basic techniques of planning, monitoring and control of projects and risk management. We support accreditation of those skills. Then we have an approach where people will progressively manage more complex and larger programs.
Would a project manager have other roles aside from project managing?
It depends upon the scale and complexity. Our larger programs require dedicated full-time attention. We sometimes manage smaller programs, a portfolio of similar types of customer projects that may have common facilities or maybe the same customer but there will be some common characteristic under which we might do a portfolio.
How do you select these people at the start?
We have a process by which we identify future talent and we work with people from all types of backgrounds in terms of their life-long learning and the development of their careers. So there isn't a single route.
Do you employ graduates directly as a project manager?
We recruit across a wide range of subjects and now directly as project management graduates. Obviously we recruit a lot of engineering folk, but people will also come to us as project managers having started their careers in finance or commercial type activities. Roughly 70 per cent come from engineering backgrounds with 30 per cent coming from other disciplines.
Does the mindset of engineers make them good project managers?
There is no single answer to that. Some of our best program managers are engineers, but it tends to be the ones that look outside the technical disciplines that have a more natural flair for management. Some engineers, of course, will be interested in the technology side and will build their careers in that direction. Generally speaking, that is probably not as good an attribute as leadership management type of mindset.
What is a project manager's mindset?
It is a leadership issue because the individual needs to oversee a number of discrete functional disciplines within the program. They have to take responsibility for the finance, and the commercial interface with the customer. They also have to be able to work down the supply chain. So it is a multi-disciplined attribute. Clearly, people can't be experts in all of those areas so it is about the integration of all of those and the leadership of the program to deliver its outcomes within the defined time.
How long has this current structure been in operation?
The origins of the methodology that we use came across from Marconi when BAE Systems was created by the merger of the old British Aerospace and the old Marconi Electronic Systems. That was preceded a bit in the telecoms sector and a bit in the power generation sector, so there was quite a lot of history to it. We brought that over when the company was created in 1999 and have spent a lot of time to refine that to reflect the sort of business we undertake.
Are there any metrics on how product management has improved?
We have a set of enterprise metrics. It is clearly a success in terms of our end financial results, with such a high proportion coming from delivery of our programs. We track customer satisfaction, which is important for any enterprise.
Within those parameters we have tracked improvement in our performance. We are not perfect, though, and it is a characteristic of large complex programs that a portion of those will bump into difficulties. What we have managed to do is to better constrain the impact of things going wrong. Finding and addressing them earlier has led us to make the impact of those issues smaller.
Is it just a gut feeling that projects are better handled now?
We track things in a very quantitive way so there is a large element of factually knowing where you are and what the issues are, but there is also a much softer element about how project managers lead a team to accomplish some pretty significant things.
The customer facing role would seem to be the most problematic?
That is part of the complexity debate. It is easy to think of complexity in terms of technological advancement, but that is not the only criteria; you also have supply chain issues, customer expectations, the technology, risk and people to manage, so the complexity equation is diverse.
Do you benchmark against other companies?
Where we do we fare reasonably well. We have a variety of accreditations that we work through and it is a competence for our business. We are fairly satisfied that our lifecycle management framework is a good quality framework.
Does working in the defence sector make it more difficult to project manage a job? Is secrecy a major issue?
That's just another attribute of the complexity. Obviously we work in highly classified environments so we have to be diligent with the control of information and we have to have variously qualified secure networks on which we transfer information.
I would probably characterise the defence sector in general as being towards the upper end of the complexity scale. The projects are large complex engineering programmes. For me, if you plot the last 20 years or so, over that time there are probably fewer main platforms and each of those platforms is probably delivering more functionality, so the trend of rising complexity is absolutely there in terms of history and I have no doubt that the trend of rising complexity will continue.
What would you say are the biggest challenges?
It is continuing our improvement programme. We are in the middle of a very difficult economic situation where government expenditures are under great scrutiny, particularly in defence. That is true in both the UK and in the US – two of our largest markets. Working to address the customer's affordability issues is a hugely important issue for us if we are to succeed in the competitive environments where we work.
For us to work through and engineer solutions that are cost competitive and affordable for our customers is hugely important, and that requires a lot of innovation, a lot of thinking, a lot of consideration about what the business models are that we work and how we work those things through to deliver that improved value for money that our government customers are seeking.
It is easy to see the advantages of managing an actual project to build a submarine or a plane, but does product managing stifle innovation?
I think it depends on how you look at it. Problem solving is all about innovation and, at the end of the day, if you think about the whole engineering training and development; we train people to solve problems. What project management does is puts it in a framework with which we can deliver results.
But, to be clear, the objectives that we would set for an element of our research program would be characterised very differently from the objectives that we might set for a particular customer delivery contract. So it is all about recognising that there are different types of projects with different types of outcomes and managing towards the success of those. *