Systems nature of large complex projects

PM World Journal (ISSN: 2330-4480) Systems Nature of Large Complex Programs
Vol. IX, Issue VIII – August 2020 by Bob Prieto
www.pmworldjournal.com Featured Paper
© 2008 Robert Prieto www.pmworldlibrary.net Page 1 of 32
Systems Nature of Large Complex Programs1
Bob Prieto
Chairman & CEO
Strategic Program Management LLC
This paper explores the system characteristics and behaviors of large engineering and
construction programs with a particular focus on those that would be characterized as
complex. It recognizes the interrelated and interacting elements of both programs and
projects as they strive to form a complex whole. Large complex programs and projects are
not well bounded as classical project management theory as espoused by Taylor, Gantt and
Fayol2 would have us believe but rather behave in both independent and interconnected
ways in a dynamic systems environment.
Large complex programs demonstrate the evolutionary nature of all complex systems;
uncertainty; and emergence that comes with human actions and interactions. They struggle
from insufficient situational awareness, treating the program to be more well-bounded than
reality would suggest and using simplified models to understand the complexity inherent in
execution. Best practices from project management literature were typically not derived from
such environments and, worse, have fallen short on other large complex programs and
projects.
Large complex programs are characterized by boundaries that change in response to
changing environments (traditional PM theory limits communication across boundaries);
emphasize coping with challenges and change (traditional PM theory restrains/limits
managerial response to changes); go beyond uncertainty and require change in perspective
(Agile PM helps deal with uncertainty); face a high level of unknown unknowns and
unclear/incompatible stakeholder needs. They encourage and likely require innovativeness
in execution which is beyond the mechanistic approach of traditional PM theory.
General Systems Theory and Key Characteristics
Systems theory represents a different way of seeing, thinking and acting.3
1
How to cite this paper: Prieto, R. (2020). Systems Nature of Large Complex Programs; PM World Journal, Vol IX,
Issue VIII, August.
2
See R. Prieto, Theory of Management of Large Complex Projects
3
De Rosnay, Macroscope: A New World Scientific System, 1975

Systems are viewed as greater than the sum of their parts. A system’s holistic properties
can never be completely known. Different perspectives will provide different views that may
overlap and not be completely compatible. Complexity of systems may exist at multiple
levels – component, sub-system, system and system of systems. Flexibility, adaptability and
responsiveness provide resilience in complex systems and redundancy of information flows
and critical resources are essential characteristics in well performing systems. Time must
be managed to accommodate disruptions and disturbances and provide adequate time for
the system to recover. Positive feedback loops may drive multi-finality while negative
feedbacks aid equilibrium and stability. Systems methodologies are characterized as either
hard or soft systems methodologies.
Hard systems methodologies sometimes referred to as operations research does not deal
as effectively with complex human conflictual problems as does soft systems methodologies.
The later consider the broader environment including human and sociological elements. Soft
systems methodologies are often iterative, learning at each stage.
While systems may be considered to be closed or open, the focus in this paper is on open
systems which are more analogous to large complex programs.
Large Complex Program Characteristics Align with General Systems Theory (GST)
Large complex programs and projects inhabit the open system world described by general
systems theory. The adoption of a systems approach to the management of large complex
programs carries with it a requirement to think strategically.
Shared concepts and best practices of large complex programs and projects and general
systems theory include:
• Life cycle approach
• People-centric issues
o Leadership
o Stakeholder engagement and benefit clarification
o Communication
o Motivation and team building
o Negotiation
• Importance of processes
• Focus on taming complexity
• Clarity of purpose (SBO)
Systems tools that can aid in management of large complex programs and projects
include:

• Rich pictures4
• Root definitions5 (SBO)
• Soft systems methodology using a 7-step approach:
o Entering the problem situation.
o Expressing the problem situation.
o Formulating root definitions of relevant systems.
o Building Conceptual Models of Human Activity Systems6.
o Comparing the models with the real world.
o Defining changes that are desirable and feasible.
o Taking action to improve the real world situation.
• Integrative thinking using holistic models
• System of systems understanding in programs (multi-project domains) and trans-
domains (program to supply chains as an example). Interactions deliver important
emergent properties.
4
Rich pictures are informal drawings that express how an individual feels about a situation. The goal is richness of
personal
expression, unrestrained by social conventions and predetermined frameworks. The rich picture identifies the issues and
related processes in a problem situation. Rich pictures are useful in surfacing the mental models and metaphors
associated with the situation. The metaphors are indicative of mental models, values, and attitudes that are unstated but
extremely influential in the governance and management of the project. They provide an excellent method of surfacing
the true diversity of stakeholders’ goals.
5
A root definition of a project is a high-level definition of overall purpose, its SBOs if you will.
6
Steps in italics are iterative

System of Systems System Sub-System
System of Systems
Figure 1
System of Systems

Table 1 compares traditional PM theory and neo-classical theory of PM from a systems
perspective.
Table 1
Comparison of Traditional and Neo-Classical PM Theory from a Systems
Perspective
Traditional PM Theory Neo-classical PM Theory
(Systems Theory)
Predominant Project
Type
Traditional Large complex programs
and projects
Foundational
Thoughts
Taylor; Fayol; Gantt von Bentalanffy
Nature of Projects “Newtonian”7; mechanistic;
deterministic (Descartes)
Relativistic (Einstein,
quantum physics);
organismic (Darwin,
evolutionary theory); they
represent change, not just
are changed
Nature of PM Control Synthesis
Thinking Reductionist Anti-reductionist, holistic
Project Boundary Well bounded; closed
systems do not interact with
their environment
Open exchange with
environment; open systems
have an ongoing
relationship with their
environment; part of a
larger System of Systems
(SoS)
View of project Well-bounded Embedded in and
interacting with other
systems (SoS)
Feedback loops Defined to support positive
control (negative feedback
loop)
Emergent; positive and
negative feedback;
reactions to changes in
environment (also change
environment)
Properties Defined; fixed; derived from
sum of the parts
(components)
Emergent; systemic8
7
Newtonian view held that the Universe was made up of closed systems.
8
Metaphysics (Aristotle) recognized that…many things have a plurality of parts and are not merely a complete
aggregate but instead some kind of whole beyond its parts…”

Table 1
Perspective
(Systems Theory)
Organizations
(individuals, groups,
departments)
Machine like closed
systems; mechanistic
structures (highly
specialized,
compartmentalized, strict
rules, well defined and rigid
hierarchy; well defined
formal tasks)
Flexible organismic
structures (decentralized,
self-organizing (ongoing
process of order-disorder
interaction), distributed
leadership, extensive
interdependence, high
individual discretion,
informal tasks,
360°communication)
Planning basis Environment is “knowable”;
predictable; limited impact
on strategy and execution
Continuous stakeholder
engagement
Stability More stable closed system;
in equilibrium with no
exchange with their
environment
Less stable open system;
potential disequilibrium
(bad = disruption; good =
change, creativity,
innovation); stabilized by
flows
Structural stability relative
as it is transferred by
exchanges with
environment
Emergence Non-emergent Emergence of novelty
Strategic Business
Objectives; goals
Fixed Exist in continuous
interaction with
environment
Complexity Reductionist approaches do
not handle well;
complexities considered in
isolation from their
environment
Complexities considered in
context of broader
ecosystem; arises from
inclusion of relationships as
a dynamic property at
various levels starting with
components and activities9
9
See Appendix 1, Program Action Matrix

Table 1
Perspective
(Systems Theory)
Most valuable
contributor
Specialist Generalist
Project execution Master schedule; recovery
to the plan
Equifinality10 recognized;
provision for contingent
execution
Predictability Predictable (order); outcome
determined by initial
conditions
Unpredictable (shifting
balance of order and
disorder); outcomes
influenced through
interaction with
environment; continual
evolution
Logic Binary; evaluation separates
behavior (inside) from
environment/context
(outside)
Spectrum of possibilities;
relational context matters
Nature of Flows Steady, laminar; clear
information
Turbulent; information
admidst the noise
Implications for Management of Large Complex Programs
Large complex programs can benefit from greater attention to systems theory and availing
themselves of many of the hard and soft tools available. These include:
• Soft systems methodology
• Strategic assumption identification, characterization and monitoring
• Scenario planning and contingent strategy development
• Critical system heuristics11
• Gap analysis
10
Equifinality is way systems can reach the same goal through different paths
11
Critical System Heuristics provides a framework for questioning a program’s purpose, source of legitimacy and
intended beneficiaries. It is used to surface, elaborate, and critically consider boundary judgments. It views
understandings of any situation as inherently incomplete, based on the selective application of knowledge. Through
systematic questioning it makes boundary judgments explicit and defensible.

Additionally, large complex programs benefit from understanding the impacts of various
program elements at all levels interacting on other program elements. Appendix 1 includes
a Program Action Matrix developed from a System of Systems perspective that one would
encounter in a large complex program. The reader should consider the description of the
various elements in the accompanying legend.
To be successful, large complex programs must:
• Ensure alignment, continuous alignment, on the program’s strategic business
outcomes and individual project objectives. This begins with strong and continuous
communication, especially important given the dynamic nature of implementing
organizations over the extended time-frames often associated with such programs.
Feedback is essential.
• Continuously engage stakeholders in reaching consensus on the newly emergent
stakeholder issues that are inevitable given the fluid boundaries associated with
large complex programs.
• Seek broader input into what is often dynamic problem solving. This expertise may
be crowd sourced in manners similar to those employed in open innovation. The
crowd may include stakeholders recognizing that owner led ‘engagement’ often
shifts to a perceived ‘management’ of stakeholders as the execution team is
established and begins operations. During execution, engagement grows in
importance and the notion of stakeholder management should be discarded to the
dustbin of failed best practices.
• Recognize that project plans, no matter how well developed, will likely not survive
real world contact. Work sequencing and established organizational and
communication hierarchies will break down to different degrees. The resultant
requirements of contingent execution and broad 360°communication represent
organizational properties which must be inoculated into project planning.
• Incentives work and careful pre-thought about the best type of incentives to be
deployed (given the project setting), the level of such incentives, the clarity of
outcomes to be achieved to earn such incentives and importantly, the timing of their
use. This last point is important. All too often incentives are deployed when the
program has already come off the rails whereas they may be more effective in
keeping the program on the rails. One excellent example is in mature safety
programs where safety bonuses are earned as the projects advance and lost until
sustained safe performance returns for a defined period.

• Focus on flows12, better managing their timing and coordination; understanding their
impact on other flows; and, importantly, anticipating their changes and rates of
change13.
• Prepare the organization and execution strategies and plans for four types of
operations:
o Regular
o Irregular (often the norm)
o Emergency
o Catastrophic/contingent – this mode of operations focuses on true resilience
of the program execution operation and plan. It most certainly aids in
handling Black Swans but also the Black Elephants14 we often ignore. This
concept of operations is characterized by flexibility, adaptability,
responsiveness, capabilities and capacities.
• Define team to include not only the resources immediately available and under the
program’s day to day control but also the broader set of skills, knowledge and
authorities that will act to enable execution. Importantly, stakeholders need to be
viewed as team members and not adversaries and appropriately engaged in
successful program delivery. This last concept is often the very antithesis of
traditional project management’s closed system thinking.
• Empower the execution team by defining outcomes, expectations, behaviors,
values, responsibilities and engagement with the broader team. Emphasize
360°communication and prudent risk taking. Emphasize use of self-directed teams
focused on contributing to achievement of overall outcomes (SBOs). This is the
antithesis of Taylor’s assembly line where each team member is only focused on a
narrow accomplishment.
• Ensure team composition matches the range of potential changes and challenges in
the external environment. Adequate team diversity of skills, experiences and
thoughts is essential. When problems are complex, diversity (cognitive differences)
trumps ability. Access to required diversity can be accomplished by access to
others outside the project team.15
12
See R. Prieto, Theory of Management of Large Complex Projects
13
R. Prieto, Generalized Analysis of Value Behavior over Time as a Project Performance Predictor, PM World Journal,
Vol. I, Issue III – October 2012
14
R. Prieto, On the Subject of Black Elephants, PM World Journal Vol. IX, Issue VII – July 2020
15
Law of requisite variety from cybernetics

• Recognize that sole-decision making may be required under chaos but even then
decisions benefit from a diversity of views and challenge.
• Strong process, procedures and performance are supported by strong social
capital. Connections between people (team members; stakeholders) must be built
early and continuously sustained and nurtured. Alignment, collaboration and true
leadership act to increase social capital. Effective use of social networks to gather
knowledge and support are leading indicators of project success.
• Risk and opportunity must be equally managed. Recognize that entropy (disorder
and randomness) are present and create or contribute to threats and opportunities
depending on how we address them.
• Ensure comprehensive understanding of changes, including disruptions, on the
entirety of the program. They are not discrete or localized events; they change the
program in ways we must seek to understand. Emergent properties are visible only
when considering the program as a whole.
• Related to this is ensuring root causes are understood and not acting elsewhere in
the program or subject to recurrence at a later stage.
• Recognize that stakeholders do not exist in isolation and that they are part of a
broader interacting ecosystem. Even when the number (N) of potential stakeholders
may be limited there are still (N2 – N)/2 potential communication channels between
them that may act as sources/precursors to influencing flows.
• Understand that traditional project control systems actually control nothing but
rather act to inform16 and influence the real control points, the individuals on the
team and to a lesser degree various stakeholders. This does not alleviate the need
to strengthen project foundations17. Also recognize the broader environment often
acts to constrain or otherwise dictate the actions which individuals can or choose to
take. Leadership is important.
• Recognize the key points of leverage in large complex programs shown in Table 2
in order of significance.
16
Estimating uncertainty and measuring variance
17
National Academy of Construction Executive Insight, Foundations for Success

• Meaningfully deploy strategies for leverage shown in Table 3 to guide the program
to its desired outcomes.
Table 2
Key Leverage Points in Large Complex Programs
1. Business and environmental context in which the industry, enterprise or
program exists
2. Strategic Business Outcomes (SBO) the program is to deliver
3. Who makes the rules (shareholders, stakeholders, regulators)
4. Rules that impact program execution (resources, constraints, incentives,
penalties, latent risks and opportunities)
5. Information flows (leading (insight), contemporaneous, lagging; information vs
noise)
6. Logistical flows (supply chain; management/sequencing/coordination of
engineering and construction)
7. Advantaging negative feedback loops (stabilizing)
8. Limiting/controlling positive feedback loops (drive multi-finality)
9. Monitoring/controlling assumption migration
10.Fixed parameters, standards, regulations
Table 3
Strategies for Leverage18
Preserve flexibility of response (contingent execution)
Provide for decentralization of decision making and action (Workface Planning)
Encourage 360°communication
Resist opening of regulatory and control loops without dealing with full effects on the
program (Law of unintended consequences)
Identify critical points of weakness or control and act upon to reinforce or retard
change
Decentralize program and project control to retain overall control on large complex
programs
Resist changes unless full program impacts understood
Do not remove or impose constraints without understanding why they existed initially
or the systemic impact of imposing them
Encourage diversity of thought (Avoid cognitive lock)
Encourage prudent risk taking and require people to “tell, tell, tell”19
Set outcomes. They allow for feedback.
18
Adopted from De Rosnay “The Ten Commandments” of the Systemic Approach”
19
Admonishment to young staff earlier in my career: “If you don’t screw up at least once a day you are not doing your
job!” Corollary was “tell, tell, tell”. Then we can help you fix it and learn from it.

Table 3
Strategies for Leverage18
Transparent broad distribution of information leads to good outcomes20
Value time and timing
Conclusion
Large complex programs are not well served by traditional PM theory and require a
significantly changed perspective. Their nature more closely resembles open systems first
defined as part of General Systems Theory. This paper seeks to succinctly highlight the
open systems nature of large complex programs, contrast it with traditional PM theory and,
importantly, provide meaningful guidance on mindsets, behaviors and practices required to
improve achievement of successful outcomes.
References
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J.E. Bartolomei, D.E. Hastings, R. de Neufville, D.H. Rhodes; Engineering Systems Matrix:
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De Rosnay, Macroscope: A New World Scientific System, 1975
G. Deshpande, Can we apply systems theory to Project Management, 2011
20
Knowledge is most powerful if everyone has it.

D. Meadows, Leverage points: places to intervene in a system, The Sustainability Institute,
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(https://www.naocon.org/insights/)
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content/uploads/2013/02/PMWJ3-Oct2012-PRIETO-GeneralizedAnalysisValueBehavior-
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Letter-to-Editor-on-black-elephants.pdf
R. Prieto, Theory of Management of Large Complex Projects
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Appendix 1
Program Action Matrix
Program Action Matrix Legend
System of Systems – The interaction between a capital asset program (system),
consisting of one or more projects, with other systems, independently managed and
subject to similar and different system drivers. The behaviors of one system may act as a
system driver on other systems in the system of systems. They represent trans-domain
networks of heterogeneous systems that exhibit operational and managerial
independence, geographical distribution (distributed) and emergent behaviors not apparent
if looked at separately.
System Drivers – This represents the broader ecosystem in which the program and other
systems it interacts with exist. The program (and other interacting systems) also act on this
ecosystem which acts organically as a living and open system. System drivers include
economic, social, political, cultural and technical and technology influences. System
drivers act to enable, accelerate, constrain or modify system behaviors at the system or
lower levels (functional element, component, activities). Stakeholders as specific system
drivers are treated separately.
External Stakeholders – Together with internal stakeholders, external stakeholders are a
key component of the social domain. They may represent individuals and organized or ad
hoc groups with defined interests which may change over time. External stakeholders
influence a program’s SBOs, define program (system) boundaries and may exert a degree
of control over functional elements, components and activities. External stakeholders may
include regulatory authorities, the general public and users or customers of the capital
asset being developed.
Internal Stakeholders – These represent a 360 degree scan within the enterprise
undertaking the program. These may include an organization’s board of directors, C-suite,
other organizational elements outside the program’s span of control and employees, most
notably those engaged with the program. In some instances shareholders and key outside
investors may be considered as if they were internal stakeholders.
Strategic Business Outcomes/Objectives – Strategic Business Outcomes are typically
associated with enterprise level objectives or significant mega or giga programs. Strategic
Business Objectives have a less broad implication and are often associated with discrete
projects. While the focus here is on capital asset projects (first delivery) the same thinking
process is extendable across a full lifecycle perspective. Let me reinforce one point, which
is the cascading of Strategic Business Objectives (SBOs) throughout the project lifecycle.
While it is appropriate, and even necessary, to translate SBOs into more specific key
performance indicators (KPIs) or key results areas (KRAs), it is essential that the SBOs
themselves not be lost. In effect they provide the guideposts for the alignment activities

that must cascade down and outside the organization, touching all key stakeholders. In
conducting lifecycle analysis it is important that achievement of ALL SBOs represent a
pass/fail criterion for any strategy, set of tactics, and project or projects that are
undertaken. SBO migration (to be polite) is a symptom of programs that are not well
founded and are usually accompanied by delay and cost overruns. This in effect calls for
the development of outcome type metrics linked to the SBOs.
Finally, achievement of multiple objectives is often the result of an efficient frontier
optimization process.
Program – This represents the coordinated and often simultaneous delivery of a family of
projects in a coordinated way to deliver a desired Strategic Business Outcome.
Project – Delivery of a capital asset meeting well defined Strategic Business Objectives
which may or may not be able to achieve an enterprise’s Strategic Business Outcomes
alone.
Functional Element – These would represent integrated portions of an overall project and
typically would comprise one or more related systems or structures. Functional elements
achieve their intended purpose and contribute to overall project achievement of defined
SBOs. An example would be onsite power generation for a remote process unit. The
functional power element could be complete and operational but the project not yet
delivering its product. A tunnel could be complete but the tunnel “system” not yet ready for
traffic.
Components – These comprise the physical elements of the project that comprise the
functional elements and are necessary for the project to achieve its SBOs. This would
include related infrastructure and the various tools to execute the project.
Activities – The processes, procedures and tasks to execute the various elements of the
project and program.
Instructions for Reading the Program Action Matrix
In the Program Action Matrix that follows, the columns represent the various systems
elements of a large complex engineering and construction program and how they interact
on other elements of the program.
Reading the columns provides a perspective of how a given systems element impacts
different aspects of the program. Reading across the rows provides a perspective of the
various influencing elements that will act on a given aspect or system feature.

Appendix 1
Part 1
Acted On Acting On
System
of
Systems
System
Drivers
External
Stakeholders
Internal
Stakeholders
Strategic
Business
Outcomes/Ob
jectives
(SBO)
Acted
On
System
Drivers
Interaction of
multiple system
drivers on a
program
(system) may
dramatically
shape the SBOs
that may be
achievable or
the ways in
which they may
be achieved. An
example might
be constraining
political drivers
that limit
economic
achievement of
SBOs to a
range other than
what might have
been optimally
desired.
Stakeholder
activism acts to
modify
legislation,
regulation or
local
ordinances.
Internal
stakeholder
decision can
act to
constrain or
amplify the
impacts of
various
system
drivers. These
can include
political and
economic
drivers for
example.
Failure to
meet SBOs
related to
operating
performance
may effect
one or more
system
drivers
(demand;
availability of
financing;
level of
regulatory
oversight)

Appendix 1
Part 1
Acted On Acting On
System
of
Systems
System
Drivers
External
Stakeholders
Internal
Stakeholders
Strategic
Business
Outcomes/Ob
jectives
(SBO)
Acted
On
External
Stakeholders
System Driver
affects external
stakeholder
composition,
attitudes and
issues
(changing
demographics)
This represents
the social
network with a
plurality of
stakeholders
and
stakeholder
issues and
objectives.
Effectiveness
of
engagement
with external
stakeholders
is often a
primary
determinant of
outcomes in
large complex
programs.
SBOs may
act to create
stakeholder
opposition,
often broader
than the
concerns
associated
with the
specific
program
(expansion of
coal fired
project at one
location leads
to broader
stakeholder
opposition to
enterprise's
climate policy
Acted
On
Internal
Stakeholders
System Driver
affects focus
areas of internal
stakeholders
(social justice;
pandemic)
Shareholder
activism
changes Board
of Directors or
causes them to
modify original
program
objectives.
This is the
land of
organizational
politics and
less than full
readiness by
the owner
organization
SBOs act to
disenfranchis
e an existing
organizationa
l segment
resulting in
passive
resistance

Appendix 1
Part 1
Acted On Acting On
System
of
Systems
System
Drivers
External
Stakeholders
Internal
Stakeholders
Strategic
Business
Outcomes/Ob
jectives
(SBO)
Acted
On
Strategic
Business
Outcomes/
Objectives
(SBO)
System Driver
affect demand
or requisite
timing modifying
an SBO. (Sharp
rise in global
iron ore
demand/ price
drives SBO for
greater than
originally
contemplated
volumes,
sooner.
Stakeholder
engagement
acts to modify
the original
SBO's
conceived.
Often
stakeholder
satisfaction
demands the
addition of one
or more ESG
objectives
Internal
stakeholders
are the
primary
influencers of
SBOs. They
must reflect
the art of the
possible not
the
improbable.
SBO migration
may come
from internal
stakeholders
where initial
SBO
development
was
inadequate or
incomplete.
The
achievement/
reconciliation
of multiple
SBOs amy
result in
multiple
potential
solutions
along an
efficient
frontier.

Appendix 1
Part 1
Acted On Acting On
System
of
Systems
System
Drivers
External
Stakeholders
Internal
Stakeholders
Strategic
Business
Outcomes/Ob
jectives
(SBO)
Acted
On
Program
System Drivers
shape program
execution plans
and represent a
primary source
of emergence.
External
stakeholder
engagement
which should
have
proceeded
program
initiation must
be continued in
the execution
phase.
Stakeholders
must become
part of the
solution and
not an
adversary to be
vanquished.
They have the
capacity to
significantly
impact program
performance.
Internal
stakeholders
can impact the
efficiency of
program
execution.
Stagegate
processes
provide
necessary
structure and
governance to
the program
but unbridled
changes or
introduction of
“wants” versus
“needs” can
significantly
negatively
impact the
program.
SBOs guide
and shape
the program.
The program
team must
have well-
articulated
SBOs that
are agreed to
and
continuously
communicate
d. SBO
migration
significantly
impacts
program
outcomes
irrespective
of the forces
driving the
migration.

Appendix 1
Part 1
Acted On Acting On
System
of
Systems
System
Drivers
External
Stakeholders
Internal
Stakeholders
Strategic
Business
Outcomes/Ob
jectives
(SBO)
Acted
On
Project
Similar impact
to what
programs may
experience but
here the drivers
may be more
discrete (one
element of a
project specific
supply chain) or
localized (one
trade unique to
one project in
program)
External
stakeholder
impacts on
projects can be
significant as
they would be
at a program
level or could
reflect a death
by a thousand
cuts (persistent
delays in RoW
permits or
utility
relocations)
Internal
stakeholders
with interest in
per projects
have the
potential to
delay and
disrupt
elements of
oone project
to the
detriment of
the entire
program)
SBO clarity
with an
objectives
focus is
required at
the project
level and
SBO
migration,
driven by
“wants” vs
“needs” is a
major source
of project
disruption.

Appendix 1
Part 1
Acted On Acting On
System
of
Systems
System
Drivers
External
Stakeholders
Internal
Stakeholders
Strategic
Business
Outcomes/Ob
jectives
(SBO)
Acted
On
Functional
Element
(systems
and
structures)
System Driver
acts to modify
nature of
functional
elements (green
power)
Relationships
between
functional
elements is
modified by
external
stakeholder
actions. This
could be added
reporting;
stakeholder
oversight
boards;
requirement for
batch vs
continuous
operations of
specific
functional
elements.
Internal
stakeholder
engagement
in functional
reviews must
be clearly
established
and basis of
design agreed
to and
established at
the onset of
design.
SBOs act to
define the
functional
decompositio
n of the
system
(program/
project). Own
or buy
choices are
affected by
description of
the SBOs.

Appendix 1
Part 1
Acted On Acting On
System
of
Systems
System
Drivers
External
Stakeholders
Internal
Stakeholders
Strategic
Business
Outcomes/Ob
jectives
(SBO)
Acted
On
Components
System Driver
acts to prohibit
use of China
sourced
electronics in
critical
industries and
infrastructure.
Employee or
user
stakeholders
drive
modifications to
various
components
out of health,
safety or
comfort
concerns.
Internal
stakeholder
engagement
in component
reviews must
be clearly
established
and limited
based on a
basis of
design agreed
to and
established at
the onset of
design.
SBOs that
have
extensive
impacts on
component
design and
selection
should be
limited to the
dominant
technology
(reactor type;
turbine
vendor;
transit car
provider)

Appendix 1
Part 1
Acted On Acting On
System
of
Systems
System
Drivers
External
Stakeholders
Internal
Stakeholders
Strategic
Business
Outcomes/Ob
jectives
(SBO)
Acted
On
Activities
System Driver
limits work after
dusk or requires
excessive
number of "hold
points" for
regulatory
inspection.
Organized
labor or trade
organization
representing
staff drive
changes in
work
processes.
Internal
stakeholder
reviews of
specific
execution
activities
should occur
at defined
points or
reflect ongoing
safety, quality
or other check
and audit
processes.
Injection of
internal
stakeholders
deeper into
the execution
process is
often
indicative of
weak
governance
regimes or a
program
already in
significant
trouble.
SBO impacts
of various
program
execution
activities
should be
focused on
conformance
with law,
regulations,
standards
and
stakeholder
agreements.
Changes in
SBOs can
affect the
planned
execution of
the program.

Appendix 1
Part 2
Acted On Acting On
System
of
Systems
Program
Project
Functional
Element
(systems
and
structures)
Components
Activities
Acted
On
System
Drivers
Programs may
act on various
system drivers
including
supply chains
and general
labor markets.
Their success
or failure may
influence other
similar
programs in
the world.
Project
impacts on
system drivers
are more
localized than
programs.
Projects
potentially
modify local
labor markets
and logistics
chains.
Functional
elements
may
impact
various
systems
drivers
through
temporary
or
permanent
resource/
supply
chain
consumpti
on.
Component
design and
specification
influence
susceptibility
to various
system
drivers.
Performance
based
specification
s can act to
inoculate
components
to volatility in
various
system
drivers.
Activities
often act to
inform
system
drivers,
reinforcing
implemente
d activities
or driving
their
modification
.

Appendix 1
Part 2
Acted On Acting On
System
of
Systems
Program
Project
Functional
Element
(systems
and
structures)
Components
Activities
Acted
On
External
Stakeholders
21
Programs may
act to modify
stakeholder
concerns and
desires both in
the local
setting but
also in similar
global
markets.
Elevated
concerns may
include
requirements
for increased
mitigation
measures or
broadened
efforts to resist
this and
similar
programs.
Negative
project
experiences
may elevate
general
stakeholder
concerns,
impacting
other project
in the
program. This
impacts
overall
program
performance
and outcomes.
Scale and
visual
appearanc
e of
structures
may invoke
stakeholde
r
opposition
to
“eyesores”
or out of
local
character
appearanc
es. System
properties
such as
noise or
condensat
e plumes
may
similarly
impact
external
stakeholde
rs.
Component
selection
may evoke
stakeholder
reactions
with respect
to sourcing
(Buy
America;
child labor;
modern day
slavery;
conflict
minerals)
Activity
performanc
e informs
external
stakeholder
s and may
modify
stakeholder
beliefs and
perceptions
21
Supporting System Documentation - Stakeholder Matrix (reflect changes in stakeholder characteristics
over time)

Appendix 1
Part 2
Acted On Acting On
System
of
Systems
Program
Project
Functional
Element
(systems
and
structures)
Components
Activities
Acted
On
Internal
Stakeholders
22
Program
performance
influences
other internal
stakeholder’s
programs;
overall
enterprise
performance
and benefit
realization
associate with
program
outcomes.
Internal power
balances and
support for the
program are
also modified.
Discrete
project
performance
acts as a
precursor of
broader
program
performance,
often
modifying
internal
stakeholder
governance
regimes.
Internal
discipline
stakeholde
rs may
modify
standard
approach
and best
practices
as
functional
elements
are
deployed
Program
component
selection
may
influence
internal
stakeholder
repair and
replace
decisions
elsewhere in
the
enterprise.
Activity
success in
delivering
desired
safety,
productivity,
cost and
schedule
outcomes
and a key
element of
manageme
nt oversight.
22
Supporting System Documentation - Stakeholder Matrix

Appendix 1
Part 2
Acted On Acting On
System
of
Systems
Program
Project
Functional
Element
(systems
and
structures)
Components
Activities
Acted
On
Strategic
Business
Objectives
(SBO)
23
Programs are
emergent and
may act to
modify the
outcome
based SBOs
originally
established.
Project
objective
achievement
may act to
influence
enterprise
level benefit
realization
especially with
respect to
timing.
Functional
element
performanc
e directly
(or
indirectly)
relates to
achieveme
nt of SBOs
Significant
variance in
component
performance
, especially
that
associated
with new
technologies
can
measurably
impact SBOs
and in the
extreme can
lead to
abandonmen
t of the
program.
Activities
that are
associated
with
extreme
HSES risks
and for
which a
substitute
approach is
not readily
available
may drive
modification
of SBOs.
23
Supporting System Documentation - SBOs linked to Execution Strategy, KPIs and KRAs. Cascaded
through Program and Projects; SBO x Stakeholder Matrix

Appendix 1
Part 2
Acted On Acting On
System
of
Systems
Program
Project
Functional
Element
(systems
and
structures)
Components
Activities
Acted
On
Program
Program to
program
impacts may
arise in
resource
(capital)
constraints
within a given
enterprise;
denial of
resource to
other similar
programs; and
from a
systems
perspective
impact other
global supply
chain
programs
focused on
input supply.
Project
performance
may impact
the program it
is part of
through any of
a number of
negative
performances.
Challenges
in overall
functional
system
and
structures
delivery
can cause
program
approach
to be
modified.
Component
and related
material
shortages or
recurrent
unresolved
quality
problems
(defective
welds) can
impact
overall
program
execution
plans.
Programs
may be
affected by
negative
interactions
of activities
from one or
more
projects
(interferenc
e) or
common
activity
challenges
across
projects
linked by
common
(now
changed)
assumption
s.

Appendix 1
Part 2
Acted On Acting On
System
of
Systems
Program
Project
Functional
Element
(systems
and
structures)
Components
Activities
Acted
On
Project
Program
impacts on
projects within
the program
may be
(positively)
associate with
program
optimization or
(negatively)
associate with
constraint
coupling.
Project to
project
impacts can
be both direct
as well as the
result of
constraint
coupling.
Challenges
in overall
functional
system
and
structures
delivery
can cause
project
approach
to be
modified.
Component
and related
material
shortages or
recurrent
unresolved
quality
problems
(defective
welds) can
impact
overall
project
execution
plans.
Modified
sequence of
project
activities
resulting
from
delayed
precedence
s;
unavailabilit
y of labor,
equipment
or
materials;
or delayed
receipt of
required
information.

Appendix 1
Part 2
Acted On Acting On
System
of
Systems
Program
Project
Functional
Element
(systems
and
structures)
Components
Activities
Acted
On
Functional
Element
(systems
and
structures)
24
Changes in
program
requirements,
often as a
result of
emergence,
may act to
modify
functional
elements
Project design
development
and late stage
O&M
requirements
may
necessitate
changes to
functional
elements.
Flows and
relationshi
ps
between
functional
elements
(informatio
n,
materials,
energy,
spatial
relationshi
ps). May
be
hierarchal.
Cost of
components
are
influenced
by functional
element
specification
s. Value
engineering
can allow
component
selection
and
functional
design to be
optimized.
Constructio
n work
process
developmen
t or
changed
O&M
requirement
s may
introduce
safety or
operational
changes to
functional
elements.
Acted
On
Components
25
Similar
impacts to
functional
elements but
may also be
driven by
desire to
reduce the
number sku’s.
Similar to
functional
elements
Functional
elements
act to
define
component
properties
and
characteris
tics.
Component
to
component
technical
interaction
Activity
interactions
with specific
components
represent a
major focus
area in
workface
planning.
24
WBS representing functional decomposition of project strategic business objectives into a set of Functional
Elements including their interactions and interfaces to achieve the SBOs.
25
Technical design delivering the Functional Elements and addressing component to component interaction
and interface.

Appendix 1
Part 2
Acted On Acting On
System
of
Systems
Program
Project
Functional
Element
(systems
and
structures)
Components
Activities
Acted
On
Activities
26
Changing
program
requirements
and timing
may change
the nature and
sequencing of
engineering
and
construction
activities.
Program
limitation and
constraints
may also
influence
planned
lifecycle
activities.
Overall project
performance
may impact
sequence of
planned
activities
necessitating
use of
contingent
execution
plans.
Functional
elements
act to
require
adaptation
of
established
processes,
procedures
and tasks
due to
changes
and
delayed
precedenc
es.
Components
required to
accomplish
discrete
activities
benefit from
innovation
and
deployment
of new
project and
construction
technologies
.
Task-task
dependenci
es. May be
coupled by
constraints.
26
. Master schedule relating project processes and tasks to each other

About the Author
Bob Prieto
Chairman & CEO
Strategic Program Management LLC
Jupiter, Florida, USA
Bob Prieto is a senior executive effective in shaping and executing business strategy and a
recognized leader within the infrastructure, engineering and construction industries. Currently
Bob heads his own management consulting practice, Strategic Program Management LLC. He
previously served as a senior vice president of Fluor, one of the largest engineering and
construction companies in the world. He focuses on the development and delivery of large,
complex projects worldwide and consults with owners across all market sectors in the
development of programmatic delivery strategies. He is author of nine books including
“Strategic Program Management”, “The Giga Factor: Program Management in the Engineering
and Construction Industry”, “Application of Life Cycle Analysis in the Capital Assets Industry”,
“Capital Efficiency: Pull All the Levers” and, most recently, “Theory of Management of Large
Complex Projects” published by the Construction Management Association of America
(CMAA) as well as over 700 other papers and presentations.
Bob is an Independent Member of the Shareholder Committee of Mott MacDonald. He is a
member of the ASCE Industry Leaders Council, National Academy of Construction, a Fellow of
the Construction Management Association of America and member of several university
departmental and campus advisory boards. Bob served until 2006 as a U.S. presidential
appointee to the Asia Pacific Economic Cooperation (APEC) Business Advisory Council
(ABAC), working with U.S. and Asia-Pacific business leaders to shape the framework for trade
and economic growth. He had previously served as both as Chairman of the Engineering and
Construction Governors of the World Economic Forum and co-chair of the infrastructure task
force formed after September 11th by the New York City Chamber of Commerce. Previously,
he served as Chairman at Parsons Brinckerhoff (PB) and a non-executive director of Cardno
(ASX)
Bob can be contacted at rpstrategic@comcast.net..

Systems nature of large complex projects

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