It is a paradox that despite the power of management systems there is so much difficulty in carrying out large-scale, technically-complex projects and programs. Such activities are normally conducted under contracts between the customer and one or more contractors engaged to carry out the associated functions. The customer will seldom have all the specialized technical capabilities in the depth and numbers required to accomplish these tasks, but it will certainly have large financial and technical interests in assuring effective management of the operations they entail.
Direction and guidance provided by the customer for contractor activities can take different forms. In many instances, the customer will arrange with contractor organizations to perform specific functions like research and development, design, procurement, construction, testing, and quality assurance, but will retain management of the total effort. In other instances, the customer will enter into arrangements where managing the total effort will be assigned to a selected lead contractor. The latter may still perform functions like those cited or have them provided by other organizations. Depending on the organizational arrangements involved, there will be one feature common to all -- the need for the customer to exercise management across a customer-contractor interface. It is a difficult terrain. For one thing, customer management cannot use the direct measures and techniques available when the organization does the job with its own personnel. Few, if any, members of the customer's organization will have authority to direct the specific actions of contractor personnel. Management must be accomplished by other methods. Experience has shown the methods that are effective and those that are not.
The key principle is that management and other capabilities of the customer's organization should be used basically for one function; namely, to require and otherwise bring about effective management by the contractor organization or organizations to assure performance in accordance with the contract. The decisive test for any action contemplated by the customer is whether it is conducive to this objective. The principal pitfall is that the customer will use its capabilities to compensate for continuing weaknesses of the contractor. Like other management principles, this one is logically compelling but difficult to apply. Departures from this principle are at the heart of countless management problems between customers and contractors. Many departures are deceptive in appearance; their very subtlety calls for managerial alertness to recognize them.
A second principle is that the customer should set forth technical requirements in sufficient breadth and depth to assure that the product will meet customer objectives, but not in such degree as will stifle contractor management, initiative, and innovative capabilities. A corollary is that the customer needs to be able to adjust requirements, as practicable, to accommodate difficulties being encountered.
The prerequisite need in applying these principles is that the customer have "in-house" capability as measured by technical competence among its own employees to shape, guide, direct, and assess the activities and operations of its contractors. No one would deny that the customer must have financial, legal, and administrative capability and that these should be competent enough to negotiate from a position of strength with their contractor counterparts. However, one does not find a comparably strong consensus on the need for customer organizations to have corresponding strength in technical management.
In carrying out complex technological programs the customer must make decisions over a broad spectrum of technical issues. Help in addressing such issues can often be obtained from third parties. Even so, it still takes technical competence to know what questions to ask and who can best provide answers. In the end, the responsibility for making technical decisions (many with large implications for cost, schedule, and performance) is a responsibility from which the customer can never escape.
Once contractors have been chosen, the need for a demanding customer capability, both technical and non-technical, will increase. The objective of intelligently applying the technical capabilities of a customer will be that the contractor perform at the standards required. As a result, there will be a need for contractors to match strength with strength. The converse is also true. If the customer organization lacks technical strength, the contractor will not feel the same pressure to achieve excellence. In this world of limited numbers of strong performers, even the best and most dedicated contractors will have difficulty manning all jobs with cadres equal in capability. Thus contractors will tend to deploy their best talent consistent with incentives to perform which emanate from the customer. In this respect, a demanding customer capability is the best assurance that a project will be given priority by the contractor when it comes to the assignment of his most capable personnel.
Having cited the need for strong customer technical capability, it is important to caution against its misuse. The general caution is that it should not be used to do work or perform functions for which the contractor is being paid. This is a self-evident proposition, but it is regularly violated; for example, assume the customer has engaged a contractor to design a large technically advanced facility. As elements of the preliminary design are reviewed, system by system, customer personnel often find it necessary to urge redesign or reconsideration for what is poor, or marginally acceptable, work. The customer will often be able to reinforce these assessments by advancing better concepts and design features than those proposed by the contractor. Contractor personnel, anxious to please the customer and acknowledging the validity of his objections, will tend to adopt the revisions being urged. A situation can develop progressively in which customer technical personnel become, in effect, an adjunct of the contractor's design review organization.
Many customer personnel would not perceive this as happening; some would not find it objectionable if they did. Such individuals find professional satisfaction principally from making a contribution to the solution of problems and, not infrequently, from the appreciative remarks by the contractor about such contributions. It takes a firm hand to keep them from subverting the larger interests of their own organization.
There are major objections to allowing this pattern of inordinate reliance on the customer to develop. One is that the contractor will see no need to improve his deficient performance. The contractor will not be giving the customer that level of performance for which he is being paid. The irony is that customer personnel will have been aiding him in the process. The second is that the customer, by his intimate involvement, is giving up his position of full objective review. The pattern of activity described is likely to be most pronounced at middle levels of management. Customer middle- management is often reluctant to see that the problem is brought to the attention of contractor top management. Thus, the latter are shielded from the problem while the customer shoulders the task of solving the problems that arise.
It is the job of customer top management to stop the misapplication of technical talent which has this effect. An indifferent management may not be aware that behind the rapport between customer and contractor is a design activity which reflects disproportionately more input by the customer than the contractor. The design also may be embodied more in the nature of compromise than customer top management would find acceptable if they knew the circumstances. The result is that the customer's capability has been used to bring about strengthened contractor management but rather to help preserve it in a state of weakness.
A demanding customer will insist on developing clear, mutually agreed-upon understandings about relationships with the contractor. True responsiveness by the latter always obliges the contractor to use his own good judgement in questioning suggestions made the customer staff if the contractor believes them to be ill-advised. Responsiveness is to be measured, not by the extent to which the customer responds automatically to guidance from customer representatives, but rather by the degree of responsibility exhibited in analyzing such guidance and then in acting on it or recommending reconsideration as appropriate. It is also to be emphasized that differences in important matters are not to be held unduly long at lower levels, where they foster animosity and weaken cooperation. Instead, they should be raised promptly to higher levels of management for resolution. The objective to be sought is open, constructive dialogue between the parties, giving the primacy to objective technical and other considerations and suppressing personal predilection and bias. The message to be conveyed is that the contractor has been engaged to use his best efforts and resources to provide a product or a service. He can be responsive only to the extent that he does this.
Circumstances may arise in which the customer, on the basis of its own experience and needs, will want to insist on courses of action that the contractor would not recommend as the preferred ones. Both parties should be clear about the matter when this is the case. They should also assure that the prerogative to make such decisions as are involved is not exercised on either side by individuals who are not authorized to make them.
The need for the demanding customer to have "in-house" capability emphatically should not be taken to imply that the numbers of personnel be large. A customer operating in a sound managerial relationship vis-a-vis a contractor should be able to provide the needed managerial oversight with far fewer numbers than the contractor is obliged to use. As problems arise, however, pressures often develop to increase numbers within the customer organization, to better cope with problems. As such demands arise, continuing vigilance is needed to avoid falling into the trap cited earlier of trying to compensate for contractor weakness by doing the job for him. The job of customer management is to convey assessments of contractor performance to contractor management, taking problems as high and as rapidly up the managerial ladder as is necessary to bring about corrective action and results. The ability to do this depends more on competence than numbers. Thus, the objective should be to keep competence up and the numbers down. It is impossible to place too much emphasis on the role of customer top management in this process. They must have the competence to satisfy themselves that their key personnel are qualified to provide direction and guidance to the contractor, but never doing his work for him.
The difficulty which customer personnel often have in keeping the interests of their own organization in mind can be heightened when the site or sites at which the work is carried out are located at a distance from the place at which the customer's management, technical, and other capabilities are mainly located. Under these conditions, a field office will ordinarily be established at the work site. Here the customer's representatives interact with the more numerous contractor personnel. In proximity to the contractor's forces, field representatives easily lose the objectivity so essential to representing the customer and its interests effectively. Surrounded by contractor personnel, field representatives often acquire an outlook that more nearly represents the contractor's viewpoints than judgements consistent with the customer's own interests. When this happens, the representative needs to be replaced.
The matters cited thus far concern interactions between customer and contractor in line activities like design, construction, procurement, and testing. The avenues for assuring effective management during these activities are pretty much self-evident. It requires more managerial acumen to be aware of the full potential of the opportunities provided by the contractor's quality assurance program. A strong quality assurance program in the contractor's organization reinforces the efforts of the customer to assure strong line management. Such quality assurance is at its best when it anticipates the customer and operates to head off problems before the need arises for customer action. Operating inside the contractor's organization, the quality assurance organization is usually in a better position than the customer to discern developing problems and also to get a full understanding of the contributing causes. Yet managers in customer organizations often fail to appreciate these advantages and, thus, do not give sufficient attention to making sure that contractor quality assurance is strong.
Sometimes customer managers may resign themselves to the quality assurance function within the contractor being less than adequate. Again, they try to compensate for this contractor weakness by adding more quality assurance personnel in their own organization. The problem should be attacked where it is found -- by insisting that the contractor's program be upgraded as needed until it is performing effectively. The customer just cannot afford to lose the advantages such a program provides. The demanding customer will not do so.
In closing, it may be well to recall that in coping with intractable problems, the temptation is to look for ever more elegant managerial solutions. Yet the answer is more likely to be found in a return to basic principles. In coping with the massive problems of building large-scale, technically-oriented projects, there is the need to return to management fundamentals -- those of the demanding customer. The greatest need will be to establish an ordered, disciplined, well-documented relationship between customer and contractor. This means a relationship in which the customer, fully endowed with the capability to manage, uses that capability in all its technical and other dimensions to insist that the contractor meet the standards of excellence agreed upon between them. It also means not doing the contractor's job for him. Accomplishing these very modest objectives of good management may not bring popularity; however, it will most surely go a long way toward bringing in projects within costs, on schedule, and meeting technical requirements.