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(TCM-2392) Reviving Entrepreneurial Thinking and Behavior in Capital Projects

Level: Intermediate
Author(s): Scott Whitbread; Nathaniel D. Greene
Venue: 2017 AACE International Annual Meeting, Orlando, FL

Abstract: As capital project development has become increasingly structured and formulaic, to enable scalability and consistency, many projects have become devoid of the entrepreneurial thinking and behavior required to minimize costs and maximize returns. Adherence to industry best practices has become a primary measure of success for a project team, and the sense of individual responsibility for the project’s ultimate financial outcome has largely dissipated; each individual can succeed by performing their scripted activities “well”.

This paper identifies five key barriers that must be overcome to revive the entrepreneurial practices in any project, and discusses a case study where overcoming these barriers led to a significant increase in project value. The barriers are:

  1. Accepting false trade-offs between cost, quality, and schedule,
  2. Over-relying on benchmarks,
  3. Failing to determine the value of improvement ideas,
  4. Dismissing proposed design changes prematurely, and
  5. Maintaining competing incentives to hide money in the project case.