Project Management in Practice

Success at Energo by Integrating Two Diverse Cultures

A major project involving some hundreds of millions of dollars was stymied due to the cultural differences between the owner$/$client$,$ a state$-$run Middle East developer, and the contractor, a s run European international designer and builder of industrial and construction projects. As can be imagined, the difference in the cultures is extreme and includes religions, the role of women society, the difference in power between managers and workers, and the style of management itself. These differences were exacerbated by the conditions surrounding the project: an isolated poor communication, extremely harsh living$/$working conditions, and a highly unstable legal$/$political environment $($taxes$,$ regulations, restrictions, and even client reorganizations$)$ that was changing daily.

The client and contractor came to realize that the two separate organizational systems created an interface, or boundary, between them that was almost impenetrable. They thus decided to try integrate the two systems into one unified system $($see Exhibit $1).$ This was done methodically, with a plan being drawn up$,$ environmental impacts recognized, restructuring of the overall organization, designing the integration, and then implementing the design.

As perhaps expected, neither side's personnel were able to give up their perspective to see the larger picture. The project managers kept working on this issue, however, watched for problems, lot of management$-$by$-$walking$-$around, and gradually, the integration began to occur, gathering speed as it went. At project closure, when all costs and engineering changes were hammered ou final payment by tough external bargaining agents $($rather than by principled negotiation, typically$),$ no agreement could be reached. Instead, the project managers were brought back and allov close the project in their own fashion. They simply continued the integration process they had used earlier and quietly phased out the successful project.

Questions

What was the key to solving this dilemma?

How did the two PMs implement their strategy?

$-$What actions in Exhibit $1$ might have been key to making this project a success?

$\backslash$table$[[,$The Project Style Characteristics,Actions$],[$Physical Appearance:,$\backslash$table$[[$Counterparts working together $($teamwork$)],[$Project$-$related pictures, charts, and schedules on office walls$]],\backslash$table$[[$Tour the site with counterpart project manager daily$],[$Make your office look like a "war room"$]]],[$Myths and Stories:,$\backslash$table$[[$We are one team with two sides$],[$Both cultures are interesting$],[$Both sides' interests should be satisfied$],[$We trust young managers$],[$Get the job done$],[$Separate yourself from the position and stick to the problem$],[$Both project managers are good, and committed to the project$]],\backslash$table$[[$Whenever possible, let the counterparts have a joint office$],[$Organize group visits to local historical sites$]]],[$Ceremonies:$,\backslash$table$[[$Gather ideas and information from all over the project organization$],[$Frequent meetings at all levels$],[$Frequent social gatherings and festivities$]],\backslash$table$[[$From time to time, attend lower$-$level joint project meetings$],[$Celebrate each key event completion$]]],[$Management Style:,$\backslash$table$[[$Plan$,$ organize, and control with your counterparts$],[$Make decisions$],[$No finger pointing for wrong decisions, learn the lesson$],[$Quickly execute the decision$]],\backslash$table$[[$Ask counterparts for joint report on an issue$],[$Recognize high$-$performance managers monthly$]]]]$