017 - The Hidden Reason Billion-Dollar Projects Overrun Even With Stage Gate

Every major capital project team will tell you they have a decision gate process. According to Iwona Wilson, having the process and having the capability to use it are two completely different things - and the gap between them is costing the industry hundreds of millions per project.

Iwona Wilson is co-founder and CEO of Wilson Biz Consulting and author of Where Projects Are Won or Lost: A Practical Guide to Early Decision Framing and Governance. With 20 years across oil and gas, mining, and capital projects in Australia, the UK, and the US - including over a decade teaching decision gate process at one of Australia's largest energy producers, she's built her career around the question most organizations don't ask until it's too late: are we making good decisions, or just passing gates?

Iwona Wilson is co-founder and CEO of Wolfson Peace Consulting and author of Where Projects Are Won or Lost: A Practical Guide to Early Decision Framing and Governance. With 20 years across oil and gas, mining, and capital projects in Australia, the UK, and the US, she specializes in decision gate process, opportunity framing, and building the organizational capabilities that separate projects that deliver from those that overrun.

https://www.linkedin.com/in/iwona-wilson/

What You'll Learn

1. Having a decision gate process is not the same as having decision-making capability Most organizations have phases, templates, and mandatory gate checklists. What they're missing is the ability to frame opportunities, challenge assumptions, align stakeholders across functions, and measure decision quality. When companies call Iwona for help, it's almost always after a major overrun or project cancellation - not before. The process without the capability is an approval system, not a governance system.

2. Projects are won or lost before the FID - and most organizations ignore this The final investment decision gets all the attention. But by the time it arrives, the team is emotionally, politically, and financially committed. Real leverage lives in the assess and concept phases, when assumptions are still negotiable and changes are cheapest. Iwona's rule: all decisions are equally important, but not all carry the same consequences. The early ones carry the most — because no one's watching yet.

3. Six dimensions of decision quality - and why commitment is always the weakest Iwona teaches the decision quality wheel: appropriate frame, creative alternatives, relevant information, values and trade-offs, sound logic, and commitment to action. The quality of your decision is only as good as its weakest dimension. Teams can produce brilliant analysis and clear options — and still have no one willing to own the outcome. Commitment is where good decisions die.

4. Opportunity framing workshops work because they're designed to be uncomfortable

Traditional meetings self-censor. When real disagreement surfaces — what researcher Sam Kaner calls the "groan zone" - most leaders schedule a follow-up and call it progress. Opportunity framing workshops use a neutral facilitator to carry teams through that discomfort intentionally. Teams that do the hard work early execute faster and encounter fewer surprises. "An opportunity framing workshop can be really messy," Iwona says. "But this is the cost of alignment."

Episode Timestamps

00:00 — Introduction 02:00 — Iwona's path from quality assurance and Young's Brewery to capital projects 05:00 — Decision gate process 101: phases, gates, FID, and post-investment review 10:00 — Why project compliance doesn't produce project confidence 17:00 — The owner's responsibility: who is actually accountable for project success 22:00 — Shifting teams from deliverables focus to decision-making focus 28:00 — Why early decisions matter more than FID — and cost the least to change 35:00 — Warning signs that your gate reviews are theater, not governance

44:00 — Opportunity framing workshops: the groan zone and the cost of alignment 58:00 — The Challenger disaster and what megaprojects still miss about frontline knowledge 1:02:00 — Six dimensions of decision quality and the commitment trap 1:09:00 — The billion-dollar math: $500M average overrun on a $1B project

Resources Mentioned

• Decision Analysis — David Skinner (founder, Society of Decision Professionals)
• Where Projects Are Won or Lost — Iwona Wilson and Austin Wilson (available on Amazon)
• Society of Decision Professionals — sdpro.org (Houston chapter, University of Houston student chapter)
• Wolfson Peace Consulting — www.wilson.biz
• Decision gate training and cohort —

Episode Transcript

(00:00):
Welcome to the Major Project Podcast.

(00:01):
I'm Orion Matthews, your host.
.999Did you know the average overrun on a billion-dollar project is $500 million? Why? Well, I once asked a wise fellow from Rio Tinto at an AAC conference, and he told me when a project blows its budget, the only thing that he needs to look at to tell you what went wrong is the decision log.

(00:25):
This episode is all about decisions. 5 00:00:27,179.999 --> 00:00:35,150 My guest, Ivona Wilson, is a member of the Society of Decision Professionals, and she breaks down decision-making to a science. 6 00:00:35,479.999 --> 00:00:39,359.999 So who knows? Maybe this one saves someone $500 million. 7 00:00:39,369.999 --> 00:00:42,409.11790583 Let's get into it Welcome to Major Project Podcast. 8 00:00:42,419.11790583 --> 00:00:44,199.11790583 I'm your host, Orion Matthews. 9 00:00:44,219.11690583 --> 00:00:53,169.11790583 In this pod, we are learning from people that work on projects that are over a billion dollars, trying to tease out lessons and learnings from these big endeavors. 10 00:00:53,189.11790583 --> 00:00:56,309.11790583 And today my guest is Iwona Wilson. 11 00:00:56,869.11790583 --> 00:01:13,779.11790583 She's got 20 years working across oil and gas, mining, capital projects in Australia, the UK, the United States, and she's a recent new author of Where Projects Are Lost Or Won: Practical Guide to Early Decision Framing and Governance. 12 00:01:14,299.11790583 --> 00:01:15,719.11790583 So really excited. 13 00:01:15,719.11790583 --> 00:01:21,779.11790583 I got a copy of this book, uh, when Iwona and I met at AACE, uh, down in Houston. 14 00:01:22,139.11690583 --> 00:01:25,89.11790583 So W- Iwona, welcome to the podcast. 15 00:01:25,689.11790583 --> 00:01:27,29.11690583 Well, thank you so much, Orion. 16 00:01:27,29.11790583 --> 00:01:29,549.11790583 What a pleasure to be here, so thank you for inviting me. 17 00:01:30,819.11790583 --> 00:01:39,299.11790583 Before we get started, I know we're gonna talk a lot about stage gates today, and really kind of dive into some of the you know, knowledge that you have about projects. 18 00:01:39,309.11790583 --> 00:01:46,149.11790583 But maybe to kick this off you could just sort of tell us a little bit about how you got into the project space, and a little about yourself. 19 00:01:47,69.11790583 --> 00:01:47,499.11790583 Okay. 20 00:01:47,499.11790583 --> 00:01:48,149.11790583 Well, beautiful. 21 00:01:48,149.11790583 --> 00:01:49,949.11790583 Well, thank you so much Orion. 22 00:01:49,979.11790583 --> 00:01:57,49.11790583 So I got into the oil and gas industry and the capital projects through quality assurance actually. 23 00:01:57,669.11690583 --> 00:02:07,609.11790583 So I'm born and raised in Poland, and I did my master's in engineering and economics, um, many, many years ago, and my major at that time was quality assurance. 24 00:02:08,39.11790583 --> 00:02:19,669.11790583 And my master thesis was about implementing a food quality management system into the brewery, um, Young's Brewery, based on my experiences at Young's Brewery in London. 25 00:02:19,979.11790583 --> 00:02:32,39.11790583 And at that time, quality assurance and ISO 9001 was a really big thing, and for me, it was a way for organization to become more competitive. 26 00:02:32,459.11790583 --> 00:02:40,39.11790583 It was for them to, uh, boost their performance, build trust with customers, and really win a lot of work. 27 00:02:40,269.11790583 --> 00:02:43,969.11790583 So that's how I used to see quality assurance. 28 00:02:44,409.11790583 --> 00:02:48,455.11790583 So however- I really like drinking beer. 29 00:02:48,475.11790583 --> 00:03:01,675.11790583 However, I had this realization that working at the brewery and smelling hops every day wasn't really something I loved, so I was always, I was looking out for different opportunities. 30 00:03:02,115.11690583 --> 00:03:21,195.11790583 And at that time, I was working as a training coordinator for Institute of Quality Assurance in London, and by being in that pa- space of where we had access to a lot of experts, trainers, the material around quality assurance, quality management, that's how I met one of the members. 31 00:03:22,85.11790583 --> 00:03:23,295.11890583 And I remember his name. 32 00:03:23,295.11890583 --> 00:03:30,595.11790583 His name was Mayank Rawal, and honestly, he's, like, one of the nicest person I've ever met in the oil and gas industry. 33 00:03:31,65.11890583 --> 00:03:56,25.11890583 So he was someone who saw my passion for quality management, and so he was someone that would encourage me to explore the industry, and that's how I got into the graduate program for one of the largest EPC engineering company, MW Kellogg, which is now KBR, in London, and that's really where my career started from there Wow, what a great story. 34 00:03:56,35.11890583 --> 00:04:05,305.11890583 And I hope we can tie together your quality sort of background and intersect it a little bit with decision gates and stage gates. 35 00:04:05,315.11790583 --> 00:04:32,535.11890583 So to kick us off talking about a stage gate, AKA a decision gate, same words different framing, maybe can you give us a 101 of this just to help everyone, no matter where they came from, kind of understand what we're talking about when we say these things? So stage gate process, which I call the decision gate process, some people call it the phase gate process, was, uh, initially developed by Dr. 36 00:04:32,535.11890583 --> 00:04:36,535.11890583 Robert Cooper for product development, product innovation. 37 00:04:36,855.11890583 --> 00:04:48,805.11790583 And then later on it really moved into capital projects and it is really widely approached to managing projects in industries like oil and gas mining, infrastructure projects. 38 00:04:49,155.11890583 --> 00:04:59,45.11990583 And I have learned about the stage gate process as the method to develop and execute projects when I worked for one of the largest energy producer in Australia. 39 00:04:59,55.11990583 --> 00:05:05,15.11990583 So This is what I learned, and this is also what I taught the employees for over 10 years. 40 00:05:05,785.11990583 --> 00:05:08,485.11990583 So the stage gate process, the idea is very simple. 41 00:05:09,285.11990583 --> 00:05:20,845.11890583 It's really about moving an idea from the early thinking into the execution whilst reducing the uncertainty, you know, the unknown that exists in a project. 42 00:05:21,375.11890583 --> 00:05:29,375.11890583 So what it really is, it's about taking an idea, initiative, or a project and breaking it into phases and gates. 43 00:05:30,585.11990583 --> 00:05:43,715.11990583 So most organizations will have five phases and five gates, but sometimes depends on the type of project, complexity, the nature of the opportunity, we will have less or more of those phases and gates. 44 00:05:44,65.11990583 --> 00:06:17,845.11990583 We typically doing the work during the phase, and then during the gate the leadership would pause and would ask the question, "Given all we know about the opportunity, do we still want to continue investing in this project?" And then the result of this gate, they would either proceed the opportunity forward They would recycle opportunity, they will put it on hold if the time isn't right, or they would stop the opportunity altogether. 45 00:06:18,445.11990583 --> 00:06:23,805.12090583 So typically in the first phase, that's when we really assess the opportunity. 46 00:06:24,5.12090583 --> 00:06:27,665.11990583 That's when we explore what this opportunity is about. 47 00:06:28,15.11990583 --> 00:06:39,815.12090583 What is the value proposition of this opportunity? What is the strategic fit? You know, how this opportunity is going to fit strategically with our organization intentions, with our strategies. 48 00:06:40,85.12090583 --> 00:06:55,345.12090583 What are the major risk? And is there at least one way to realize this opportunity? And then at the end of the first phase, that's when the leadership comes in and makes the decision whether it's even worth doing more work. 49 00:06:55,655.12090583 --> 00:07:13,725.12090583 Okay? Do we understand what's the major problem? Okay? The second phase, which I call concept phase, sometimes we call it select phase, that's when we create, identify a whole range of creative alternatives, and we analyze those alternatives, we analyze those options. 50 00:07:13,725.12190583 --> 00:07:21,305.12190583 We test our value drivers, and at the end of that phase, we come up with one solution, one concept, or one alternative. 51 00:07:22,145.12190583 --> 00:07:28,405.12190583 And then during the gate, we test have we got the best option? That is going to lead to the best outcome. 52 00:07:28,905.12190583 --> 00:07:35,565.12190583 Then the fourth phase, the develop phase, is about developing that concept further and preparing for exe- for execution. 53 00:07:36,155.12190583 --> 00:07:41,605.12190583 And after that phase, that's when we go into the major decision, which I'm sure you're familiar with. 54 00:07:41,615.12190583 --> 00:07:45,335.12090583 This is where the decision called the final investment decision. 55 00:07:45,655.12090583 --> 00:07:56,345.11990583 That's when the organization announces they have a project, and they ask the question, "Are we truly ready to execute this project?" And then they move into execution. 56 00:07:56,705.11990583 --> 00:07:59,915.12090583 And then during the execution, we making it happen. 57 00:08:00,25.11990583 --> 00:08:03,115.12090583 We are executing, constructing, procuring, commissioning. 58 00:08:03,425.12090583 --> 00:08:06,505.12090583 This is where is the most visible part of the project. 59 00:08:07,245.12090583 --> 00:08:09,765.12090583 And then we move into the new environment. 60 00:08:09,775.12090583 --> 00:08:18,975.12090583 So the last phase, that's when we move the project into the new environment, and we evaluate whether we got what we said we going to do. 61 00:08:19,835.12090583 --> 00:08:33,605.11990583 So usually between 6 to 12 months after the project moves into the new environment, we conduct the post-investment review, and we evaluate the value from what we brought into this new environment. 62 00:08:34,15.12090583 --> 00:08:40,305.12090583 So Stage-Gate process is seen as a governance tool, and it is a governance tool. 63 00:08:40,725.12090583 --> 00:08:46,945.11990583 But for me, it's really more a decision-making system, and also it's a way of thinking. 64 00:08:47,365.12090583 --> 00:08:53,415.11990583 It's really a way to bring the clarity around what are we dealing with when it comes to the project. 65 00:08:53,835.12090583 --> 00:09:01,605.12090583 It's the way to bring confidence for decision-makers in the project team so they know what they investing in. 66 00:09:02,25.12090583 --> 00:09:11,885.12090583 And it's also the way to connect stakeholders from across the organization and allow them to provide contribution and knowledge, for the benefit of the project. 67 00:09:12,185.12090583 --> 00:09:15,315.12190583 So, ultimately, it's a risk management tool. 68 00:09:15,635.12190583 --> 00:09:28,5.12090583 It's really about making sure that as we develop the project, we reduce the uncertainty by boosting our own confidence so that we know what are we spending money on. 69 00:09:28,455.12190583 --> 00:09:33,455.12190583 That's the short one-on-one training on what the- Stage-Gate process is about. 70 00:09:33,505.12190583 --> 00:09:34,405.12190583 That's amazing. 71 00:09:34,405.12190583 --> 00:09:45,385.12090583 That was like an entire course just, you know, if you have someone starting in pro- in, on a major project, we could just clip that and give it to them and be like, "We're in Appraise right now. 72 00:09:45,425.12190583 --> 00:09:45,745.12190583 Here..." 73 00:09:46,285.12190583 --> 00:09:46,585.12190583 Wow. 74 00:09:46,595.12190583 --> 00:09:47,515.12190583 We- well done. 75 00:09:47,525.12190583 --> 00:09:47,985.12190583 Thank you. 76 00:09:48,5.12190583 --> 00:09:49,155.12190583 Thank you for that overview. 77 00:09:49,525.12190583 --> 00:09:58,405.12190583 So then maybe you could tie in a little of your exper- you talked about decisions, and I, I can't wait to talk a little bit about how important those are or kinda what your take is. 78 00:09:58,675.12190583 --> 00:10:15,845.12190583 But before we do, could you tie in quality, your work in ISO? What drew that sort of prior experience into the Stage-Gating process? How do those intersect, like quality and Stage-Gating? I should still call it decision gating, I suppose. 79 00:10:15,875.12090583 --> 00:10:22,491.12190583 But anyway, is there- An overlap there? There is a little bit of o- overlap. 80 00:10:22,531.12190583 --> 00:10:27,221.12190583 I think in general the intention is probably very, very similar. 81 00:10:27,541.12190583 --> 00:10:38,591.12190583 It is ultimately the ISO 9001 as well as Stage-Gate process ultimately is about allowing the organization to make good decisions, good quality decision. 82 00:10:38,951.12190583 --> 00:10:46,881.12190583 But what I would say there are differences in the way we approach projects in tools and frameworks available. 83 00:10:47,281.12190583 --> 00:10:50,281.12190583 So let me break it down into something specific. 84 00:10:51,591.12190583 --> 00:11:04,781.12190583 So initially, when I worked as a quality assurance engineer for major EPC engineering companies that was a few decades ago in London, my job was very simple. 85 00:11:05,501.12090583 --> 00:11:24,571.12190583 My job was about implementing the project quality management system on a project, and then auditing that project against the contractual requirements, against international standards, as well as against the organizational expectations and requirements defined in policies. 86 00:11:25,831.12190583 --> 00:11:31,931.12190583 So what I saw after working on different projects is that most projects were compliant. 87 00:11:32,821.12190583 --> 00:11:35,551.12190583 Most projects follow procedures. 88 00:11:35,611.12190583 --> 00:11:37,191.12090583 They use the right templates. 89 00:11:37,721.12090583 --> 00:11:41,191.12090583 They apply the right guidelines and recommendations. 90 00:11:41,191.12190583 --> 00:11:42,911.12090583 You know, the boxes get ticked. 91 00:11:44,141.12090583 --> 00:11:58,801.12190583 But despite the fact that a lot of projects were still compliant, many of those projects would experience challenges, especially during execution phase, and some of them would be even canceled, and somehow I never really knew why. 92 00:12:00,501.12090583 --> 00:12:17,81.12190583 So compliance alone and compliance with the governance within your organization doesn't necessarily give you confidence and answers that you are working on the right project or working on a project with the right solution. 93 00:12:18,391.12190583 --> 00:12:43,273.12190583 So at some point, I realized that- Projects might pass gates, and might still carry political bias or might still have hidden assumptions, and might still pass the gate with stakeholders being misaligned if the focus is so much about passing the gate as opposed to improving decision-making during the gate. 94 00:12:44,263.12190583 --> 00:12:54,783.12190583 So what happened, I really didn't see working for the contractor, how can I make a bigger difference? You know, my audit reports after a while begin to be the same. 95 00:12:55,223.12190583 --> 00:13:05,333.12190583 They would report on the same issues around document control, communication, interfaces, and in ge- generally speaking, they were all compliant. 96 00:13:05,333.12190583 --> 00:13:07,553.12190583 There were just little issues that need to be addressed. 97 00:13:07,913.12190583 --> 00:13:12,623.12190583 But I didn't really feel like I'm making a big difference, you know, with those reports. 98 00:13:13,173.12190583 --> 00:13:22,393.12190583 So it's only when I got opportunity to work for the owner organization and look at projects from the idea stage. 99 00:13:22,883.12190583 --> 00:13:25,593.12190583 That's really what Stage-Gate process allows you to do. 100 00:13:25,773.12190583 --> 00:13:38,243.12190583 It's the framework that fully gives you access to bring an idea, move this into the concept, development, and eventually execution, and then the new environment. 101 00:13:38,513.12190583 --> 00:13:53,973.12190583 So when I was given access to how do you actually bring those ideas to life, that's when I saw what's possible and where value actually gets created, and where value cannot... 102 00:13:54,213.12190583 --> 00:13:55,743.12190583 you cannot add any more value. 103 00:13:55,753.12190583 --> 00:13:59,233.12190583 All you have to do is just to get things done as soon as possible. 104 00:13:59,493.12190583 --> 00:14:22,983.12290583 So Stage-Gate process when taught properly, okay, can give you access, tools, language, and conversations which is really required to help leaders make confident, informed decisions, so that when they move projects to the next phase, they actually know what they're gonna invest. 105 00:14:24,213.12190583 --> 00:14:37,983.12290583 So that's sort of the, the realization I have, you know, that compliance alone won't give you confidence that you're working on the right projects, you're addressing you, you know, you're dealing with the right solution. 106 00:14:38,463.12290583 --> 00:14:40,433.12390583 It won't give you, confidence alone. 107 00:14:40,433.12390583 --> 00:14:49,693.12390583 So you've gotta have a framework that take it all the way from the seed when the opportunity is still an idea, you know. 108 00:14:49,743.12390583 --> 00:14:54,253.12490583 So a good governance should improve the quality of your decisions. 109 00:14:54,503.12490583 --> 00:14:57,383.12490583 It's not just about generating more documents. 110 00:14:57,723.12490583 --> 00:15:01,423.12490583 It's not just about even document quality, you know. 111 00:15:01,433.12490583 --> 00:15:06,645.12490583 It's really about enabling leaders to make good decisions Okay. 112 00:15:07,45.12490583 --> 00:15:07,805.12490583 This is interesting. 113 00:15:07,805.12490583 --> 00:15:17,495.12390583 We I think we have a mutual colleague Akin Oni, who had a book that was really famous in our space called the, The Operation Was Successful But The Patient Died. 114 00:15:17,505.12390583 --> 00:15:17,525.12390583 Yeah. 115 00:15:17,925.12390583 --> 00:15:37,325.12390583 Which is a lot of Kind of reminds me of what you were saying here of you can follow all the procedures and still, have high quality scores, but you were seeing, like, these projects were not actually being successful for the organizations, which kind of led you to the decision gate process saying, "We're making bad decisions here. 116 00:15:37,325.12390583 --> 00:15:43,35.12490583 How do we make better ones?" Even in light of doing all the right things, the patient's still dying. 117 00:15:43,35.12490583 --> 00:15:46,215.12490583 Like, w- what do we do here? That makes a lot of sense. 118 00:15:46,225.12490583 --> 00:16:07,805.12490583 So then how why are the decisions If you follow the steps and you do the governance right, you still get the wrong decisions, why? Like, why- Okay, so- Why does that happen or how does that happen, would you say? Okay, so it's obviously we can tackle that question from so many different perspectives. 119 00:16:08,405.12590583 --> 00:16:17,353.12590583 I guess one thing we need to clarify is that- you know, if my initial experiences was with contracting organization. 120 00:16:17,963.12590583 --> 00:16:28,833.12590583 So what happens is if you introduce change in the middle of execution or even during the development stage, you know, the contractor just gonna send you an invoice if you are the owner, right? Yeah. 121 00:16:29,303.12590583 --> 00:16:36,376.45823916 You know, if the patient goes for a surgery and then dies at the end, you know, it's the family which will take the consequences very often, right? Yeah. 122 00:16:36,626.45923916 --> 00:16:41,636.4592392 It's not often the doctor that is following their own procedure and their own framework. 123 00:16:42,206.4582392 --> 00:16:51,806.4592392 So I think what is interesting, the Stage-Gate process has, gives so much emphasis and access to this knowledge really for the owner of the project. 124 00:16:51,816.4582392 --> 00:16:51,846.4592392 Mm-hmm. 125 00:16:52,296.4592392 --> 00:16:57,346.4592392 It's the owner that has responsibility to set a project for success. 126 00:16:58,506.4582392 --> 00:17:02,586.4592392 Because the owner focus is always long-term. 127 00:17:02,966.4592392 --> 00:17:10,886.4592392 How can we create with that project real value for the community, the environment, the organization itself? Okay. 128 00:17:11,46.4592392 --> 00:17:28,586.4602392 There is a lot of different stakeholders and players that come at different stage and their job is just to really follow the contractual requirements as close as possible uh, demonstrate they, they provide quality services, and then exit when the work is complete. 129 00:17:29,146.4602392 --> 00:17:30,986.4612392 So that's one distinction. 130 00:17:31,636.4602392 --> 00:17:38,66.4612392 Really know what is your role in the project development and execution space. 131 00:17:39,116.4612392 --> 00:17:49,376.4602392 Okay? So when I talk to construction companies, they are not that interested in Stage-Gate process- Right because if there is a change, they just gonna ask the client to pay. 132 00:17:49,946.4612392 --> 00:17:50,156.4612392 Yeah. 133 00:17:50,486.4602392 --> 00:17:51,556.4602392 Back into your question. 134 00:17:51,556.4602392 --> 00:18:09,954.4602392 So why some of those decisions don't give the outcomes, okay, that intended? So- So one thing which is really important, a lot of what I teach about stage gate process, decision-making, opportunity framing, this is not necessarily my knowledge. 135 00:18:10,264.4602392 --> 00:18:14,724.4602392 So I mentioned to you earlier, a lot of that knowledge comes from Dr. 136 00:18:14,724.4602392 --> 00:18:19,344.4592392 Robert Cooper, who developed the stage gate process for product development. 137 00:18:19,574.4592392 --> 00:18:38,714.4592392 But also when it comes to decision-making, opportunity framing, a lot of that knowledge comes from decision science, which we really call now decision quality, which is promoted by organizations like Society of Decision Professionals, and this, this knowledge is highly taught at Harvard Universities and few other universities right now. 138 00:18:39,224.4592392 --> 00:19:12,914.4592392 So one things which we which is important to mention is that many organizations organize and structure projects around deliverables, templates, checklist, and decision gate process wants you to shift your thinking from being activity and deliverables focus to being really decision-making focus, and that would fundamentally change what would... 139 00:19:13,114.4592392 --> 00:19:16,784.4592392 what is team now asked to deliver. 140 00:19:17,764.4592392 --> 00:19:26,134.4592392 Okay? So, the only reason we have phases is to prepare you for the next decision you need to make. 141 00:19:27,4.4592392 --> 00:19:34,574.4582392 The only reason you, you ask to produce deliverables is to enable some kind of decision. 142 00:19:36,514.4592392 --> 00:19:47,374.4592392 Okay? So a lot of projects often get stuck, and they produce deliverables after deliverables without pausing to a- ask the question, what is that... 143 00:19:47,424.4592392 --> 00:19:50,884.4592392 what is the decision that we actually need to make? Yeah. 144 00:19:51,274.4592392 --> 00:20:08,74.4592392 And what happens is that gonna create a lot of waste, unnecessary waste in terms of time and resources and might actually even, you know, lead to a lot of deliverables that are getting produced with no value for leadership to make the decision. 145 00:20:08,794.4592392 --> 00:20:37,60.4592392 Okay? And that leads really into, you know, what is decision quality Okay, so decision quality, it is a standalone discipline that is measuring the quality of decisions that you need to make based on the information you have available at the given time, and the time of making that decision, okay, regardless of the outcomes the decision is going to lead to. 146 00:20:37,800.4592392 --> 00:20:47,740.4582392 So it's very important to remember when the leadership comes to the decision gate to make a decision, they really gonna focus on what is the decision they need to make. 147 00:20:48,250.4592392 --> 00:20:52,420.4602392 Okay? They need to understand what options have been considered. 148 00:20:53,60.4602392 --> 00:20:55,670.4602392 They need to understand where this information come from. 149 00:20:55,900.4602392 --> 00:21:04,310.4602392 Is the information that they are being given relevant? Is it up to date? Where does it come from? They need to understand the value. 150 00:21:04,840.4592392 --> 00:21:06,640.4612392 They need to understand the, of the project. 151 00:21:06,670.4592392 --> 00:21:08,630.4592392 They need to understand what trade-offs have been made. 152 00:21:09,20.4602392 --> 00:21:10,510.4602392 They need to understand what has been... 153 00:21:10,750.4602392 --> 00:21:21,790.4592392 what was the logic that made the team to recommend that option as oppo- or not, or that option and what is the commitment that is required of them. 154 00:21:22,30.4592392 --> 00:21:26,730.4592392 So we call it six dimensions of decision quality. 155 00:21:26,950.4602392 --> 00:21:40,930.4602392 So they need to really understand that and focus their thinking on decision-making as opposed to ask teams, "Give me the 10 deliverables that you need to give me, and let me know what's their status." 156 00:21:41,800.4592392 --> 00:21:43,810.4592392 So we have to change the focus. 157 00:21:43,860.4592392 --> 00:21:55,150.4602392 And those organizations that still run the gate reviews heavily focus on activities and deliverables They often lose the focus what's the intent of the gate review. 158 00:21:56,420.4602392 --> 00:21:58,100.4602392 So quick question on this. 159 00:21:58,160.4602392 --> 00:22:18,480.4602392 Is the decision always proceed, recycle, stop/pause? Is that the, the ultimate decision, or do you bring other secondary decisions to the stage gate? Like, is it, is there some "Oh, this is a stage gate review decision that the project needs to make." 160 00:22:18,480.4602392 --> 00:22:22,10.4602392 Like, these are three different options that you could proceed with, or is it... 161 00:22:22,530.4602392 --> 00:22:28,900.4592392 Like, tell me about, like, what makes something a stage gate decision versus just a normal, "Let's take this to management." 162 00:22:28,950.4602392 --> 00:22:57,440.4602392 I'm so glad you asked me that because I hear this a lot, people really getting confused, what are the different decisions that need to be made at the major milestone? So just to clarify what you said, so decision requires six different dimensions to be met, and you can actually measure that, okay? So we're talking about six different dimensions that would make a good decision good, and you can actually measure that. 163 00:22:58,140.4602392 --> 00:23:19,680.4612392 The outcomes of decision is whether you proceed the project to the next phase- Whether you recycle the project, which means ask the project team to go over the previous phase again, whether you p- put the project on hold, or whether you stop the project altogether. 164 00:23:19,880.4612392 --> 00:23:22,910.4612392 So it's the outcome of that decision. 165 00:23:23,260.4612392 --> 00:23:32,640.4612392 If the decision at the milestone is to proceed to the next phase, that's when the organization is making the financial commitment. 166 00:23:32,910.4612392 --> 00:23:35,280.4612392 They release the funding for the next phase. 167 00:23:35,490.4612392 --> 00:23:42,70.4612392 They release the resources and the project team can proceed with the next phase. 168 00:23:42,550.4612392 --> 00:23:55,470.4612392 So at the end of the assess phase, the major decision is what is the value proposition of what we're actually trying to achieve. 169 00:23:55,980.4612392 --> 00:23:56,160.4612392 Hmm. 170 00:23:56,170.4612392 --> 00:23:57,140.4612392 Okay? Yeah. 171 00:23:57,180.4612392 --> 00:24:18,136.4612392 So I often give very simple example because the most important when you teach stage gate process is to make sure the organization understand the principles Okay? So it's not about, like, teaching them- It's not the process it is really understanding the principles. 172 00:24:18,446.4612392 --> 00:24:53,650.4622392 So the first, the major decision after the assess phase is do we even wanna proceed? What is the problem we're trying to solve? What is the opportunity we are after? And knowing the gate decision, the team needs to get together and create the work plan and think about what's the minimum amount of work that we need to do to satisfy the gate requirements So it's not about doing all possible deliverables that we've ever done in our life. 173 00:24:54,20.4622392 --> 00:24:54,420.4622392 Mm-hmm. 174 00:24:54,420.4622392 --> 00:25:34,560.4622392 Okay? It's what's the minimum amount of work that we need to do to answer the main question at the gate one, okay? Do we even wanna do it? If you were given a block of land, let's say, in Fort Myers, Florida, and you live in Oregon, right? Like- Mm-hmm and I say, "Hey, Orion, you know, why don't you and your family build a family home in Fort Myers, Florida," right? Well, the first question is, it's do I even con- do I even wanna consider that? Yeah? So your work is determined, but by what is your next decision gate. 175 00:25:35,680.4632392 --> 00:25:55,870.4632392 That's where you'll think about, what am I gonna do? What are the minimum amount of activities? What are the minimum amount of deliverables? Do I need an assurance reviews? Do I even check whether, like, she's for real? Are you for real? You wanna give me a block of land of this size? Are you crazy? What's the catch, you know? Yeah. 176 00:25:55,870.4632392 --> 00:26:05,660.4632392 Like, so you wanna break it down to really get clarity to make sure there is alignment between you and your wife, and your family, that this would be a good idea. 177 00:26:06,120.4632392 --> 00:26:08,140.4632392 And the same applies to projects. 178 00:26:08,830.4632392 --> 00:26:24,140.4632392 And the second major decision, it's about making sure that we have gone through different options, that we understand, and we have analyzed different options, and we have picked the best option that will give us the best outcome. 179 00:26:25,520.4632392 --> 00:26:31,200.4632392 So that's the focus of the second decision, of the concept definition decision. 180 00:26:32,250.4632392 --> 00:26:42,170.4632392 At the end of the concept phase, you need to make sure that you understand is this gonna be a two story or one story? Would it have a swimming pool? Mm-hmm. 181 00:26:42,210.4632392 --> 00:26:42,360.4632392 Okay. 182 00:26:42,500.4632392 --> 00:26:49,560.4642392 And probably before that, you even wanna understand you know, should I stay or should I go? Yeah. 183 00:26:49,620.4642392 --> 00:26:57,540.4632392 Like, what's the whole benefit of even considering this opportunity? Where would the value come from? Okay, how would I... 184 00:26:57,550.4642392 --> 00:27:11,170.4642392 Y- you know, how, how would this benefit my family, my business, my future aspirations, uh, my children? How would that benefit different aspects of my life? And the same applies to companies. 185 00:27:11,590.4642392 --> 00:27:15,910.4642392 And then you have the next major decision very often, the FID decision. 186 00:27:16,800.4642392 --> 00:27:26,100.4642392 Well, that's the decision when the organization need to be really confident that they truly are ready to move into execution. 187 00:27:26,670.4642392 --> 00:27:37,920.4642392 And then the last decision is, are we ready for handover? So ultimately, at every decision gate, an organization is making two decisions. 188 00:27:38,980.4642392 --> 00:27:47,10.4642392 The first decision is they want to get confident that they are ready, so they've done what they said they're going to do. 189 00:27:47,760.4642392 --> 00:27:51,100.4642392 They have assured the deliverables are of high quality. 190 00:27:51,330.4632392 --> 00:27:53,180.4632392 They have answered the key decisions. 191 00:27:53,270.4632392 --> 00:27:55,140.4632392 They have tested the assumptions. 192 00:27:56,200.4632392 --> 00:28:05,210.4632392 And then the second major decision they need to answer is, do we want to proceed? Which is more a business decision. 193 00:28:06,450.4632392 --> 00:28:58,878.4632392 Given the market, given what else we wanna do as an organization, given, given our maybe new organizational strategy, our aspiration, uh, given the current pricing, given what else is going on in our organization, do we want to proceed? So ultimately, the leadership need to answer at every gate whether we are ready to proceed and whether we want to proceed, and the outcome of this decision is whether the project should be approved to move forward, whether it should be recycled, whether it should be put on hold or stopped altogether Well, so what's interesting when you say that and frame it in the should I move to Florida analysis is that my, one of my questions for you was sort of what's the most important decision? But now I kind of wonder if that's almost the... 194 00:28:59,308.4632392 --> 00:29:07,248.4632392 if there's a different framing of it, because if you ask me do I wanna move to Florida, I think most people say, "Well, the most important decision is whether you're gonna actually write the check." 195 00:29:07,578.4632392 --> 00:29:14,228.4632392 But is it because sometimes you learn things when you actually kick it around, where you're like, "This is what our life would..." 196 00:29:14,258.4622392 --> 00:29:19,188.4622392 You know, you sort of hit that sort of like do I wanna do this, as you were saying, sort of step one question. 197 00:29:19,528.4632392 --> 00:29:23,18.4642392 And that can reveal things, where you're like, "No, I don't wanna be a Floridian." 198 00:29:23,508.4642392 --> 00:29:32,248.4642392 And so there's value in knowing that for the organization that goes just beyond, like, that initial should I even do this, right? It, helps... 199 00:29:33,218.4632392 --> 00:29:37,948.4632392 it helps me know where I'm gonna be spending my life and where to invest more energy. 200 00:29:38,228.4642392 --> 00:29:58,708.4632392 Like, maybe you could talk a little bit about that, 'cause I think sometimes if people are in these projects and they do the wanna do it stage, and then it's like, "No, we don't wanna do this," it's like, "Did I just waste my time working on this? Like, did this contribute to the organization?" That's how I have oftentimes heard it be interpreted maybe i- you know, that it's like it's all about just this one project, not the organization. 201 00:29:58,708.4632392 --> 00:30:05,538.4622392 And maybe you can tie that together 'cause you've been hinting about culture and how people need to shift the way they think about decisions. 202 00:30:05,548.4622392 --> 00:30:12,668.4622392 So maybe you can talk a little bit about that about how organizations should be thinking about decision-making and how to create that culture. 203 00:30:13,248.4622392 --> 00:30:13,598.4622392 Yeah. 204 00:30:13,608.4622392 --> 00:30:17,188.4622392 This is, um, beautiful question, and I, I'll, I will try to answer this question. 205 00:30:17,668.4622392 --> 00:30:49,408.4612392 And a lot of the time I hear question which decision gate is the most important? And i- i- if you watch what's happening, if you watch the top performing organizations, if you watch a little bit what's, what's going on and how organizations announce projects, you can very easily say that the FID decision, the final investment decision, is the most important decision because that's when project is public. 206 00:30:49,428.4612392 --> 00:30:56,188.4612392 That's when everyone gonna know that Orion and his family are actually moving to Florida, right? Mm-hmm. 207 00:30:56,198.4612392 --> 00:31:00,628.4612392 And that's the decision that's going to release most funding. 208 00:31:00,938.4612392 --> 00:31:15,968.4612392 That's where, you know, it's often we're saying the decision is kind of irreversible, right? So, but what I wanna say to you that all decisions are equally important, but not all decisions have the same consequences. 209 00:31:18,558.4612392 --> 00:31:18,878.4612392 Okay. 210 00:31:18,878.4612392 --> 00:31:24,258.4612392 So all decisions are very important, and they need to be answered. 211 00:31:24,968.4612392 --> 00:31:34,458.4612392 Okay? If they are not answered consciously, they answer it unconsciously through assumptions, and they carry different level of consequences. 212 00:31:34,978.4612392 --> 00:31:35,768.4602392 You with me? Mm-hmm. 213 00:31:35,768.4602392 --> 00:31:47,728.4602392 So, many projects are already lost or won before that decision, and it's really about how they treat those early decisions. 214 00:31:48,138.4612392 --> 00:32:03,358.4612392 So after the assess phase and after the concept phase, this is when decision-makers, leadership, that's when you and your wife would need to be crystal clear what is the opportunity about. 215 00:32:03,468.4612392 --> 00:32:05,598.4612392 Okay? What is gonna driving... 216 00:32:05,608.4612392 --> 00:32:29,878.4612392 You know, why would we even consider moving to Florida? What are some of the assumptions that we are making about the present and about the future? This is where those early phases, this is where we often locking in our options, okay? And that's why those early decisions are often underestimated. 217 00:32:31,368.4612392 --> 00:32:45,768.4612392 So again, all decision gates are equally important, but not all of them carry the same level of consequences, and I believe that we need to pay more attention to those early stage decisions. 218 00:32:46,118.4612392 --> 00:33:05,778.4612392 Because during that stage, when you're gonna change your mind, change directions, new information is gonna become available, making changes at that stage is way cheaper than committing to change, you know, once you're on the plane moving your family to Florida. 219 00:33:05,828.4612392 --> 00:33:06,858.4612392 You with me? Yeah. 220 00:33:06,858.4612392 --> 00:33:07,88.4612392 Yeah. 221 00:33:07,88.4612392 --> 00:33:20,18.4622392 So once you pass the FID stage, it gets so much more expensive, plus it's almost impossible to change, to check, right? You, you are emotionally committed to your decision. 222 00:33:20,418.4602392 --> 00:33:31,828.4622392 You know, the whole family and community already knows that you are now Floridian, okay, so you're politically connected to that decision and financially invested to that decision. 223 00:33:32,318.4622392 --> 00:34:00,178.4622392 So I believe that by raising the importance of those early decisions can hugely benefit those FID decisions, so when we get to that FID, there's a lot more confidence inside the organization that this is the right thing to do, and this is why, and these are the different options we looked at, and this is what we're aiming to achieve at the end, and this is how we're gonna make decision. 224 00:34:00,808.4622392 --> 00:34:12,232.4622392 So it's easy to create the story for the public, why do we think this is the right thing to do? I love this framing and the house framing. 225 00:34:12,542.4622392 --> 00:34:18,322.4622392 I think one thing you've mentioned is decision, that the team needs to help do the decision. 226 00:34:18,332.4612392 --> 00:34:22,792.4622392 So say I'm, like, vice president, I'm gonna be in that conversation. 227 00:34:22,842.4622392 --> 00:34:24,852.4622392 I'm gonna go into a stage gate conversation. 228 00:34:25,422.4622392 --> 00:34:35,302.4612392 M- most teams of engineers are very heavily process-focused, so oftentimes they're gonna say, "Okay, I've got, I've gotta deliver these deliverables to you. 229 00:34:35,522.4612392 --> 00:34:38,972.4612392 They ha- we have to check these check boxes," ISO, like you said. 230 00:34:39,362.4612392 --> 00:34:46,122.4622392 But you said those things don't actually result in good decision-making, and you have to change the way the teams think about making decisions. 231 00:34:46,152.4622392 --> 00:34:49,752.4622392 So how could I, as a VP listening to this, I'm like, "Okay you're right." 232 00:34:50,242.4622392 --> 00:35:06,726.4622392 How do you set your team up with this new mindset shift? What advice would you give to leadership to, to create that? First of all, you need to understand what is your organization about, and what are your expectations around your projects. 233 00:35:06,726.4622392 --> 00:35:25,616.4622392 What are your intentions? What is your vision? What is your mission? Because stage gate process and the work your teams will create will largely depends on, what kind of projects you are going to develop and what is your role in that project development and execution. 234 00:35:26,156.4622392 --> 00:35:44,626.4632392 If you're the owner organization, if you're someone initiating projects one of the things you can do, you can first of all understand, what is my current process to initiate projects, develop them, and then execute them with confidence. 235 00:35:45,476.4632392 --> 00:35:50,446.4632392 You know, first of all is to really get aware about your current state. 236 00:35:51,136.4632392 --> 00:36:01,716.4632392 Get individuals together from different s- different parts of the business, and run a little bit of a lessons learned workshop to understand what are some of the patterns running through your organization. 237 00:36:02,566.4632392 --> 00:36:21,146.4622392 What is currently happening? What are some of the processes that are already working for you? What are some of the processes that aren't working for you, and why? So you first wanna get present with what have you got in place already, how your governance is helping you making decisions. 238 00:36:21,146.4622392 --> 00:36:21,326.4622392 You know, then you go deeper, and you're trying to evaluate each element of your decision gate process. 239 00:36:21,406.4632392 --> 00:36:32,996.4632392 So you're looking at the decision gate review meetings. 240 00:36:33,926.4632392 --> 00:36:37,146.4632392 You're lo- looking at how do we start each phase. 241 00:36:38,76.4632392 --> 00:36:43,406.4632392 You're looking at how do we categorize and scale each project. 242 00:36:44,6.4632392 --> 00:36:48,246.4632392 You're looking at how do we invite inputs from different functions. 243 00:36:48,856.4622392 --> 00:36:53,666.4632392 You're looking at how do we align teams on the work that we're going to do. 244 00:36:54,296.4632392 --> 00:36:59,906.4632392 You're looking at how do we reduce uncertainty as we move from one phase to the next. 245 00:37:00,286.4632392 --> 00:37:08,400.4632392 And also, you're looking at how assurance, whether assurance is actually providing us with insights to make confident decisions. 246 00:37:09,90.4632392 --> 00:37:32,180.4632392 So ultimately, um, you will have a better understanding about what are some of the patterns running in my organization, and then that will give you insights into what do I need to now focus on? Where are the gaps? Where teams are producing deliverables which aren't adding value to our decisions. 247 00:37:32,840.4632392 --> 00:38:04,188.4632392 Are leadership teams doing gate reviews, are they getting information that gives them clarity and confidence to approve those projects so they can move forward and kill those projects that are just badly framed projects? How do you as an executive, spot when things are not quite right? Like, when you're walking in a, a stage gate process, you know, sometimes you have this, like, false confidence that's there. 248 00:38:04,298.4632392 --> 00:38:09,388.4632392 What are the things you look for that would tell you that maybe things aren't... 249 00:38:09,438.4632392 --> 00:38:13,198.4632392 that the processes haven't really been followed, that there's these... 250 00:38:13,258.4632392 --> 00:38:17,468.4632392 Are there warning signs that you can pick up on? Yeah. 251 00:38:17,478.4642392 --> 00:38:18,528.4632392 There is many things. 252 00:38:18,528.4642392 --> 00:38:24,248.4642392 I mean, what I mentioned earlier, you, you do wanna know what results are you getting from what you currently have in place. 253 00:38:24,518.4642392 --> 00:38:36,358.4632392 The other aspects to be really conscious and mindful about is look at how do we lead our conversations, our meetings our gate meetings. 254 00:38:37,118.4652392 --> 00:38:56,448.4642392 You know, I'm not someone who leads gate reviews, but my background is in working upfront with teams, helping them to frame opportunities, set up the right governance systems, facilitate discussions, and really help teams to set up their project for those gate reviews. 255 00:38:57,138.4642392 --> 00:39:27,68.4642392 So there is a lot of insights that you can get by analyzing and watching, you know, being like the fly in the room and watching how conversations take place where leaders from different functions need to get together and make some important decisions, right? Whether it's to explore a difficult problem or to make important decisions, and gate reviews are those meetings where important decisions need to be made. 256 00:39:27,568.4652392 --> 00:39:33,808.4642392 So here are some of the warning signs that executive need to really watch for. 257 00:39:34,548.4652392 --> 00:40:02,948.4652392 So the first one I would say, apart from me analyzing the structure and the agenda of the meeting, which by the way, has a lot to do with how we establish a safe and also brave space for discussion, something that people might reflect as they listen to this now is, how do we present our projects? How do we provide this grounding presentation? Is it... 258 00:40:03,48.4642392 --> 00:40:19,46.4652392 Is everything super polished? Do people ask questions? Do they challenge assumptions? Or do they just accept everything without any challenge? Mm. 259 00:40:20,106.4652392 --> 00:40:38,916.4652392 You know? Another thing is if you talk about gate reviews, because that's really where the executives might be able to show up and listen a little bit, you know, so you might look at whether at the gate review, teams can clearly explain what the opportunity's about. 260 00:40:39,716.4652392 --> 00:41:08,996.4652392 What is the major value driver? What are some of the assumptions they adopt to select the right option? Do they understand what is the biggest risk? Okay, another thing is also during, like, let's say a second gate review, if all of a su- all of a sudden someone mentions stakeholder that haven't been mentioned earlier on, then you might know that probably stakeholders engagement have been done too late. 261 00:41:10,36.4652392 --> 00:41:30,136.4652392 Or if we're talking about a gate review, if most of the focus is about discussing how many documents have been done and what's the status, as opposed to having conversation that allow people to improve their decision-making, their confidence in decision they're gonna make. 262 00:41:31,446.4652392 --> 00:41:48,86.4632392 So there's a, there's a lot that you can, uh, listen and just watch by listen to the quality of those conversation, and those warning signs might sort of lead you know, to a false confidence about the project. 263 00:41:48,826.4632392 --> 00:42:15,806.4632392 And then another thing we could maybe discuss it's, you know, the difference in how we structure those meetings, and that's where opportunity framing workshop, you know, they are, they are so distinct from traditional meeting because of the way they are structured, the way people need to get ready for them then and then the outputs that they produce and then what that leads to. 264 00:42:16,746.4632392 --> 00:42:18,196.4632392 Well, tell us a little bit about those. 265 00:42:18,266.4632392 --> 00:42:19,106.4632392 I'm curious. 266 00:42:20,16.4632392 --> 00:42:28,616.4632392 Traditional meetings are usually well-designed if you wanna bring different individuals together to do a status update. 267 00:42:29,856.4622392 --> 00:42:45,626.4632392 But if you are trying to make important decisions, or if you wanna explore the problem, or frame a big, complex opportunity with the, with a lot of moving parts and uncertainties, they're not always structured the right way. 268 00:42:45,626.4632392 --> 00:42:47,226.4632392 They're not designed that way. 269 00:42:47,586.4632392 --> 00:42:49,726.4622392 So let me say to you why. 270 00:42:49,816.4632392 --> 00:42:55,196.4642392 If you bring the bunch of people together, people are usually not on their best behavior. 271 00:42:56,286.4642392 --> 00:42:56,306.4642392 Yeah. 272 00:42:56,576.4642392 --> 00:43:11,756.4642392 They tend to protect their own interests, especially if you bring functional managers from different functions together when you ask them to explore the new opportunity, right? You know, they, they tend to think about what's the priority for them. 273 00:43:12,486.4642392 --> 00:43:15,326.4642392 And they often, they often self-censor themselves. 274 00:43:15,336.4642392 --> 00:43:29,226.4642392 So what that means, even if they ask questions, um, if the culture within the organization in those meeting is, is such that leaders would say "We've already covered this." 275 00:43:30,768.4642392 --> 00:43:33,468.4642392 Or, you know, "Let's keep it simple." 276 00:43:34,88.4642392 --> 00:43:40,108.4642392 You know, if they rush those conversations, like, what happens is those leaders self-censor themselves. 277 00:43:40,108.4652392 --> 00:43:50,638.4652392 They actually don't openly share the concerns, they, they don't ask the right questions, because the culture of the organization is, "Let's keep it going. 278 00:43:50,638.4652392 --> 00:43:51,708.4652392 Let's move on." 279 00:43:52,348.4652392 --> 00:44:04,298.4642392 Okay? And so what happens is, I like to bring the expertise from Sam Kaner, and I often talk about Sam Kaner and his research around collaborated decision-making. 280 00:44:04,758.4652392 --> 00:44:19,128.4642392 Because Sam Kaner, who is expert in group decision-making, he says, "When individuals are invited to the room to make important decisions, there are basically three parts in this conversation." 281 00:44:20,228.4642392 --> 00:44:36,618.4632392 There is the part when we invite different opinions when we diverge, when we ask questions, with the intention that later on we're gonna converge discussion, we're gonna narrow down our thinking, we're gonna plan our action, and eventually make decision. 282 00:44:37,278.4642392 --> 00:44:50,858.4642392 But what happens, even in well-structured meeting, when you allow for divergent thinking and convergent thinking, somewhere in between, teams tend to experience tension. 283 00:44:51,918.4632392 --> 00:44:57,558.4632392 Especially if the problem is very big, if the decision to make has huge implications. 284 00:44:57,768.4632392 --> 00:45:00,698.4632392 He calls it the experience, like a grown zone. 285 00:45:00,698.4632392 --> 00:45:02,338.4632392 Like, it gets messy. 286 00:45:02,658.4632392 --> 00:45:06,728.4632392 Okay? People feel the disagreement, discomfort. 287 00:45:07,768.4632392 --> 00:45:16,898.4632392 And a lot of leaders don't like sitting in that place when there's a lot of uncertainty and messiness, and when they experience conflict. 288 00:45:16,908.4632392 --> 00:45:21,258.4632392 So what they do that moment, they say, "Well, let's stop. 289 00:45:21,558.4632392 --> 00:45:24,428.4632392 Let's schedule the next meeting for next week." 290 00:45:24,818.4632392 --> 00:45:25,198.4632392 Yeah. 291 00:45:26,168.4632392 --> 00:45:29,328.4622392 And that's why strategy meetings often take three months. 292 00:45:30,574.4632392 --> 00:45:32,964.4632392 If they could actually take, you know, one day or two days. 293 00:45:34,64.4632392 --> 00:45:46,714.4632392 And what happens is the messiness, the ground zone, it's a natural consequence of diversity in the room, and it's almost a fundamental. 294 00:45:46,714.4632392 --> 00:45:55,384.4632392 It's necessary to create eventually shared understanding and sustainable solution. 295 00:45:56,84.4622392 --> 00:46:11,144.4632392 You with me? And those teams that are able early on to go through those difficult conversations, the conflicts, those teams tend to execute faster with less surprises. 296 00:46:11,924.4632392 --> 00:46:42,614.4632392 And that's where opportunity framing workshop are distinct from traditional meetings, because they bring a neutral framing facilitator whose role is to help their teams, help the team to do their best thinking together, and carry them through the ground zone so they can land with shared understanding about what we're trying to achieve, and what's the decision that we need to make, how we can proceed. 297 00:46:42,844.4622392 --> 00:47:04,964.4632392 So you need someone with no vested interest- Mm-hmm in the outcome, that would purely be interested in helping the group to go through the process, and will let people contribute based on their expertise and knowledge in such a way they can come out with alignment. 298 00:47:05,254.4632392 --> 00:47:26,672.4622392 An opportunity framing workshop can be really messy, and can be painful, and they can be uncomfortable, but this is the cost of alignment That is super powerful, and it re- it reminds me of workshops that maybe have happened with teams where you're trying to do team building. 299 00:47:27,182.4622392 --> 00:47:38,802.4632392 And in order to create a strong team, you know, there's forming, norming, storming, and performing, right? So it sounds like there's a similar kind of framework that needs to go through to do a decision. 300 00:47:39,82.4632392 --> 00:47:52,742.4642392 So one of the triggers of saying, "Hey, are we making good decisions?" might be like, Was there that zone where there was conflict, and people had to, like, move past it and other ideas? If the conversation was just straight away, like, "Yeah, it was a no-brainer. 301 00:47:52,742.4642392 --> 00:47:59,362.4642392 We all knew we should definitely do this project," and we green-lighted it, then you might have a team that's just not as integrated. 302 00:47:59,392.4642392 --> 00:48:13,752.4642392 So there's that having your team show up if you've already done the work to integrate them probably is a helpful tool because teams that have low integration indexes avoid conflict, and they haven't really worked through that. 303 00:48:13,752.4642392 --> 00:48:34,262.4642392 And so does that create an additional barrier? Like, is there sort of, like, team integration work you wanna do to even get to a decision-making meeting 'cause almost like, you know, therapy or whatever, if you're with your spouse and you can't decide whether to go to Florida or not, sometimes it might be because you're conflict avoidant, and then that means you just can't make the decision. 304 00:48:34,272.4642392 --> 00:48:55,646.4632392 So is there some organizational capacity level of conflict that you need to get to to be good at stage gates? Let me just explain one important thing which I think is really relevant to what you're saying, which is- it will be a little bit different in a family environment where decision-makers obviously know each other very well. 305 00:48:56,76.4632392 --> 00:49:02,186.4632392 And what might be helpful for the family situations it's the right process. 306 00:49:02,196.4622392 --> 00:49:09,26.4622392 So, and, you know, just to give an example my husband is very well inducted into Opportunity Framing Workshop. 307 00:49:09,396.4622392 --> 00:49:22,216.4612392 And one of the biggest challenge when individuals who really know each other well, and if they need to make important decision, one of the biggest challenges, they sit next to each other, and they just converse next to each other. 308 00:49:22,466.4632392 --> 00:49:32,646.4622392 And every time one person speaks, the other one is actually thinking about what they're gonna say and how they're gonna respond without even listening to what this person says, right? This is just so typical. 309 00:49:33,16.4622392 --> 00:49:36,756.4612392 You know, we tend to really respond before we listen to what the other person say. 310 00:49:37,36.4612392 --> 00:49:46,126.4622392 So in this situation, um, something that might work for your family, something that works in my family, is that we actually bring up a big flip chart. 311 00:49:46,736.4622392 --> 00:49:49,96.4622392 We take Post-it notes, me and my husband. 312 00:49:49,376.4622392 --> 00:49:51,856.4622392 We don't sit opposite to each other. 313 00:49:51,866.4622392 --> 00:49:52,236.4622392 Mm-hmm. 314 00:49:52,296.4622392 --> 00:49:53,746.4612392 We sit next to each other. 315 00:49:53,746.4612392 --> 00:50:05,356.4622392 In fact, we don't even look at each other, and we quietly write down on Post-it notes what are some of the issues, questions, and concerns that we see in this coming opportunity. 316 00:50:05,746.4622392 --> 00:50:14,146.4622392 And then so what we're trying to do, we're trying to get our thoughts out of our heads and make them visible on the wall. 317 00:50:14,566.4622392 --> 00:50:24,946.4622392 And by doing it this way, we both feel fully self-expressed because everything we said is structured, s- you know, is defined on Post-it notes. 318 00:50:25,156.4622392 --> 00:50:30,806.4622392 And then we stand next to each other, and we say, "Okay, well, take me through your Post-it note. 319 00:50:30,826.4612392 --> 00:50:37,146.4622392 What are some of those issues?" And before we even do that, we actually categorize them. 320 00:50:37,426.4622392 --> 00:50:40,976.4622392 "Oh, I've got the same thing," or, "You've got the same thing? I've got the same thing. 321 00:50:41,156.4622392 --> 00:50:42,446.4622392 Well, let's put them together. 322 00:50:42,556.4622392 --> 00:50:46,16.4622392 So what is this?" Or, or, "Here is the financial concerns we have." 323 00:50:46,26.4622392 --> 00:50:46,516.4622392 Mm-hmm. 324 00:50:46,516.4622392 --> 00:50:48,676.4622392 Okay, or, "Here is the work concerns we have." 325 00:50:49,116.4622392 --> 00:51:07,266.4622392 So doing just very simple process, you shift from fighting who needs to say what to actually analyzing and looking at your issues before your eyes, as opposed to just in your head, so that's one thing. 326 00:51:07,266.4622392 --> 00:51:19,836.4612392 So often people lack a process when they can fully self-express themselves in the most efficient way, so not something that will drag for weeks, because you need that momentum. 327 00:51:20,316.4622392 --> 00:51:21,766.4612392 Okay, back into projects. 328 00:51:22,16.4622392 --> 00:51:35,386.4622392 So in projects, the difference in project is when you apply Opportunity Framing Workshop right in the assess phase, you don't have a team yet Right. 329 00:51:35,836.4622392 --> 00:51:44,126.4612392 Yeah So the team stage development doesn't apply as much, and what happens is this is actually... 330 00:51:44,136.4612392 --> 00:52:09,286.4632392 This can be either an opportunity or a challenge, which means if the organization have already a lot of conflict, if there is a lot of silos between different functions, that's why you can see opportunity framing is often avoided- Mm-hmm because, because different functions have different priorities, and they are not willing to come together. 331 00:52:09,656.4612392 --> 00:52:20,886.4622392 So then opportunity framing could be a blessing and could actually ultimately impact the culture of the organization. 332 00:52:20,896.4622392 --> 00:52:22,376.4622392 That's what I strongly believe. 333 00:52:22,676.4612392 --> 00:52:51,676.4632392 Those companies that consistently apply opportunity framing to, to bring stakeholders from across the function and create clarity and alignment on what we're trying to achieve, if they do it consistently with the initiatives and project, they tend to create more positive, vibrant culture where individuals know they are invited to make decisions. 334 00:52:52,186.4632392 --> 00:52:55,846.4632392 Their experiences, their thoughts are invited. 335 00:52:55,846.4632392 --> 00:53:07,596.4622392 They are welcomed, okay? As opposed to those teams, those organizations where there's a lot of silos and they try to rush through those early stages. 336 00:53:07,646.4622392 --> 00:53:11,276.4622392 You can prove, "Hey, here is my well-defined business case. 337 00:53:11,966.4622392 --> 00:53:14,536.4622392 Look how fast we went through those cases. 338 00:53:14,766.4622392 --> 00:53:17,316.4622392 We've done this before, so let's do it again. 339 00:53:17,986.4622392 --> 00:53:20,466.4622392 Let's copy and paste the same option." 340 00:53:21,126.4622392 --> 00:53:36,776.4612392 Okay? And then they rush through those decisions, but also what they don't allow experts that they already often have from across the different functions to contribute to their plan, and if people don't feel like they can contribute, they begin to disengage. 341 00:53:37,706.4622392 --> 00:53:40,656.4622392 They lose the trust to their process. 342 00:53:41,606.4612392 --> 00:54:00,826.4622392 You know, they lose the trust to the governance and then they often leave There's these people during major project stage gates that I feel like might be on the contractor side, or they're on the team, and they're the ones that are like, "I coulda told you you never coulda gotten that done." 343 00:54:01,406.4622392 --> 00:54:17,806.4622392 And they somehow feels like sometimes with these decisions, there is some hidden variable information that never makes it to those meetings, that in hindsight was obvious to the foreman that works at, for the EPC contractor. 344 00:54:17,856.4622392 --> 00:54:40,886.4612392 Or, like, how do you in, how do you source that st- how do you avoid that from happening? Yeah, it really depends when you see those inconsistencies and when you see gaps in processes, or, uh, when you wonder, why people did not take this information into consideration when making decisions. 345 00:54:41,486.4612392 --> 00:54:56,716.4612391 There is, this number of reasons why that happens, and that's why I often invite companies to be, uh, really honest with their processes and make sure they periodically review the adequacy of each process. 346 00:54:56,716.4612391 --> 00:55:29,262.4622391 You know, does it actually meet the purpose that you want this to meet? And that cascades down to decision-making, and then to how they source the information, where they bring this information from, and also who they invite to those meetings Is it like, the, after the Challenger explosion and NASA realized that they had m- missed that O-ring, and that decision was, to, to... 347 00:55:29,292.4622391 --> 00:55:37,532.4622391 The go, no-go was effectively like a management override of people that were really down on the ground, and they could have prevented it. 348 00:55:37,532.4622391 --> 00:55:40,682.4622391 And so now they have, like, a process where anyone can kind of... 349 00:55:40,882.4622391 --> 00:55:51,382.4622391 they have changed the way they approach processes to facilitate, like, taking these people that normally wouldn't have any power to stop a shuttle launch and giving it to them. 350 00:55:51,972.4632391 --> 00:55:59,832.4612391 Is that an approach that major projects should consider, or is that already been baked in or, Yeah, do you have some- Yeah, yeah. 351 00:55:59,832.4622391 --> 00:56:06,662.4612391 I mean, my, recommendation is that every project has opportunity framing workshop. 352 00:56:07,332.4622391 --> 00:56:18,992.4612391 And back into your example, if people down on the ground are not invited to express their opinions, well, that is gonna impact, decision-making. 353 00:56:19,2.4612391 --> 00:56:26,12.4612391 That is gonna often show up later on a surprise that could have been prevented. 354 00:56:26,762.4612391 --> 00:56:27,182.4612391 Okay. 355 00:56:27,242.4612391 --> 00:57:59,272.4602391 And that's why early on in the framing workshop, when there's a lot of unknowns, a lot of uncertainties, if you invite people with a vested interest and knowledge to of different parts of the project development and execution, if you invite stakeholders from different functions, if you invite someone with operation experience, someone with execution experience, someone familiar with the nature and complexity of the project someone who is then going to represent the company with with the regulator- Mm-hmm someone who will then need to speak to the community, obviously someone with project controls experiences, project management experiences, someone with the HSE experiences, are we already incorporating safe practices and strategies right from the beginning? So early on, if you make sure you have the right stakeholders and you create the space where they feel safe to express their thoughts, their ideas, their issues, their questions- Yeah and then you have the way to organize those questions so that they can feed decision-making, they can contribute to business case, the assumptions from framing are being translated into cost and schedule estimate. 356 00:58:00,214.4602391 --> 00:58:08,544.4592391 Okay? The insights from opportunity framing are already incorporated into your regulator and stakeholders management plan. 357 00:58:09,244.4602391 --> 00:58:23,834.4612391 So that is already the first step and something very practical you can do that would save you a lot of time in recycling and prevent a lot of surprises, especially around community, uh, you know, around safety. 358 00:58:24,214.4612391 --> 00:58:25,374.4612391 It can prevent you... 359 00:58:25,374.4612391 --> 00:58:42,444.4612391 It can prevent a lot of surprises down the line if you're able to, to listen, slow down at the start, and invite the contribution, work on what is the thinking of my team before I actually go and make decisions. 360 00:58:42,864.4612391 --> 00:58:49,464.4602391 So that could be probably something easy to introduce by any project. 361 00:58:50,524.4602391 --> 00:58:56,184.4602391 That makes a lot of sense, and maybe it gets into the six dimensions that you mentioned of a decision, is how... 362 00:58:56,534.4602391 --> 00:58:58,164.4602391 First of all, I don't know what those are. 363 00:58:58,204.4602391 --> 00:59:02,854.4602391 Maybe you can help me with those six dimensions, and should I have known those, having been through... 364 00:59:03,74.4602391 --> 00:59:10,504.4592391 do you want your team to understand those six dimensions? Do you frame around that during those workshops? Uh, a very good question. 365 00:59:10,504.4592391 --> 00:59:13,984.4602391 So this is, you're talking about the decision quality wheel. 366 00:59:13,994.4602391 --> 00:59:14,14.4602391 Yeah. 367 00:59:14,454.4602391 --> 00:59:15,974.4602391 I teach about this. 368 00:59:16,414.4602391 --> 00:59:26,594.4602391 It is very, you know, as you learn about the six dimension, I'm gonna repeat for you again those six dimension, but I know that a lot of people listen to those dimensions and they say, "Ivona, this is such a common sense." 369 00:59:26,894.4612391 --> 00:59:29,814.4622391 It is like, "Why are you even telling me this?" Right. 370 00:59:29,824.4622391 --> 00:59:39,414.4622391 Because it is so much common sense, and I often say that the biggest challenge is, is if the common sense isn't applied early enough, so I use that decision quality. 371 00:59:39,454.4622391 --> 00:59:40,854.4622391 I teach about this. 372 00:59:41,114.4622391 --> 00:59:53,604.4622391 It is very much aligned with framing method, with the framing process, and decision quality as a method where you can measure the alignment around those six dimension. 373 00:59:53,934.4622391 --> 00:59:59,334.4622391 This is something that you can use before the major decision is going to be made. 374 01:00:00,762.4622391 --> 01:00:05,52.4622391 Or soon after to check the quality of the decision. 375 01:00:05,332.4622391 --> 01:00:13,582.4622391 So just for everyone again, so the sixth dimension of decision quality is number one, make sure you have appropriate frame. 376 01:00:14,632.4622391 --> 01:00:17,592.4622391 You understand what you're trying to achieve. 377 01:00:18,102.4612391 --> 01:00:24,162.4612391 The second dimension is that you identify, you create a wide range of alternatives. 378 01:00:24,342.4612391 --> 01:00:31,32.4602391 The third one is that you know where the information comes from. 379 01:00:31,292.4612391 --> 01:00:35,262.4612391 You have access to relevant and up-to-date information. 380 01:00:36,142.4612391 --> 01:00:42,592.4612391 The fourth one is you understand the value drivers and you understand the trade-offs when it comes to making decisions. 381 01:00:43,602.4612391 --> 01:00:50,792.4612391 The fifth one, there is some logic in you can demonstrate how you've made that decision. 382 01:00:50,802.4612391 --> 01:00:52,352.4612391 There is a process behind. 383 01:00:52,842.4612391 --> 01:01:00,292.4612391 And then the last one is there is commitment to action from the major stakeholders who need to take actions. 384 01:01:00,712.4612391 --> 01:01:07,42.4612391 So the quality of decision is as good as the weakest will. 385 01:01:07,842.4612391 --> 01:01:12,272.4612391 So you might have clarity around what you're trying to achieve. 386 01:01:13,352.4612391 --> 01:01:21,812.4612391 You might understand the trade-offs, okay? You might understand where the information come from, but if there's no commitment, nothing happens. 387 01:01:21,812.4612391 --> 01:01:22,382.4612391 Then it doesn't work. 388 01:01:23,222.4612391 --> 01:02:00,740.4622391 Okay? You might even have a commitment, but if you have a poor quality information, if you're making wrong assumptions, the quality of, of that decision will be really low, and the impact it will have will be damaging so these six questions I like people to remember, and if you think about it, they are so simple that you can actually get together with your team in any function, whatever decision you're gonna make, and you can just go over those six decisions and discuss it with your team before you make a decision or soon after. 389 01:02:01,350.4622391 --> 01:02:03,930.4622391 So you can apply it for any major decision. 390 01:02:05,430.4612391 --> 01:02:11,850.4602391 That's very, very helpful, and kind of leads into sort of o- one of my final questions, but just to repeat these. 391 01:02:11,860.4602391 --> 01:02:19,160.4602391 So the first, So we have, you The, on the decision, you need to know what was the first one? What you want to do. 392 01:02:19,480.4602391 --> 01:02:23,190.4602391 You have to appropriate frame. 393 01:02:23,200.4592391 --> 01:02:31,880.4602391 Number one- Yeah have you got clarity- Frame on what you're trying to achieve? And then do you have the information, the value question. 394 01:02:32,200.4602391 --> 01:02:32,260.4602391 Options. 395 01:02:33,150.4602391 --> 01:02:38,220.4602391 Is it logical? And then do you have commitment? Yeah, so six decision. 396 01:02:38,220.4602391 --> 01:02:41,263.7935725 What are you trying to achieve? And then what are the options? Yeah. 397 01:02:41,673.7925725 --> 01:03:03,333.7925725 So decisions, decisions is all about consciously choosing what I'm trying to do given the information I have available, the options I'm considering, uh, given the time of making the decisions, the value, the trade-offs, and then knowing that there is commitment required. 398 01:03:03,333.7925725 --> 01:03:21,325.7935725 So I need to ask the question who are the key stakeholders that need to be involved? What amount of commitment is required to make that decision stick? So you must have a lot of fun in these meetings 'cause with a lot of the conflict, you know, take people through those and then you're in this uncomfortable space. 399 01:03:21,605.7935725 --> 01:03:26,25.7925725 I'm sure there's some tears and yelling and all sorts of stuff. 400 01:03:26,25.7935725 --> 01:03:41,845.7935725 It must be a, a really good reason to have somebody work through these workshops that can be a neutral party to, like, walk people through that really important phase and then teach them the skills about what it means to make decisions. 401 01:03:42,815.7935725 --> 01:04:04,475.7925725 One thing that I really learned today when talking with you is sort of my one takeaway, and I'm really curious what your takeaway would be, is that these decision-making workshops are, really important but There's a cultural element to it, that if you're a really high performing organization, it seems to me that decision-making is not just at these gates. 402 01:04:04,735.7925725 --> 01:04:12,5.7925725 It's actually something that needs to be inculcated into the entire organization somehow. 403 01:04:12,5.7925725 --> 01:04:17,655.7915725 And if you do get successful decision gate processes you know, that's great. 404 01:04:17,955.7915725 --> 01:04:32,405.7925725 But if you can actually find a way to work that same opportunity framing into the rest of your organization and your teams and it's organically bubbling up that really is the prize. 405 01:04:32,855.7925725 --> 01:04:37,95.7925725 And that's really interesting, and I just appreciate you coming on and talking about that. 406 01:04:37,95.7925725 --> 01:05:05,265.7935725 But what would be your one takeaway if you wanted people to, to sort of lear- like, to remember something from what we've talked about? What would you hope they might have for? Well, my one takeaway would be if you are really serious about creating a culture where you can h- you can have predictable as much as you can project success you need to really look at the m- the mindset, the decision gate mindset that you have in your organization. 407 01:05:05,605.7935725 --> 01:05:19,285.7935725 You need to aim to create some sort of language fluency across different functions, so we all speak from the same hymn sheet and we understand the decision gate process language. 408 01:05:19,745.7925725 --> 01:05:39,95.7935725 And you also need framework for decision-making that people trust, that that empowers individuals inside those teams to voice their opinion, and also enables decision-makers to make good, confident decisions. 409 01:05:40,757.7945725 --> 01:05:49,247.7945725 It's so interesting that, like, uh, I really appreciate what you said there, and something we probably should have told people in the beginning is the gravity of what we're talking about here. 410 01:05:49,247.7945725 --> 01:05:57,417.7915725 So, I think I looked these numbers up a little while ago, but for a billion-dollar project, the average loss that you can expect... 411 01:05:57,487.7925725 --> 01:06:12,77.7915725 So if you do 10 billion dollar projects, you will expect five of them to overrun, and your average, like, of those overruns is gonna be it's gonna be about $500 million. 412 01:06:12,217.7915725 --> 01:06:17,897.7915725 So if you think about, like, just sort of the cost of these decisions, they're massive. 413 01:06:18,97.7915725 --> 01:06:23,157.7915725 That most pro- So when you budget a billion dollar project, you budget an average overrun of 500 million. 414 01:06:23,477.7915725 --> 01:06:33,907.7905725 That's how bad our decision making is in this space, but it's also just the opportunity that's on the table if you have good decision making and thoughts around this process. 415 01:06:33,907.7905725 --> 01:06:35,977.7905725 Like, you're talking really big dollars here. 416 01:06:36,397.7905725 --> 01:06:43,437.7905725 So if you get those decision-making pieces right, it could make a, a huge difference between an organization surviving or not in many ways. 417 01:06:43,447.7905725 --> 01:06:50,527.7905725 So, the gravity of what you're doing and the work you're doing is, is exciting to talk about, and I really appreciate you doing that. 418 01:06:50,527.7905725 --> 01:06:52,547.7905725 This was a wonderful conversation. 419 01:06:52,547.7905725 --> 01:06:54,27.7885725 Thank you so much, uh- Yeah. 420 01:06:54,27.7905725 --> 01:06:55,77.7905725 Well, thank you, Orion.