Page 50 - Megaprojects Playbook

Diageo began the line strategy program with the decommissioning of their Menlo Park facility. This meant that they had no way
of supplying product to the market without successful execution of the balance of the project. This had the effect of “jumping
out of an airplane and building the parachute on the way down” and created a very dynamic environment of problem solving.
After securing the facility scope of work, the packaging scopes were awarded to Haskell on a negotiated basis.
Finally, Diageo requested Haskell take on the processing scope, enabling us to offer Diageo a full EPC contract
with Haskell as the single source of responsibility for delivering the project and performance guarantees.
The full scope approach positioned us to develop and execute Haskell's first major EPC contract.
A primary challenge was alignment on the details of the project scope as it related to the contract price. Specifically, the scope
was not validated with the operations team who would operate the facility, there wasn’t alignment on the start-up and testing
plan and responsibilities, and the process scope was not well defined. We mitigated these challenges through project staffing
and change control. Most notably, a Haskell executive team operated as a program manager and interfaced directly with the
Diageo Steering team. This allowed for frequent and clear communication with the Diageo decision makers to manage through
issues and the change control process. However, the lack of alignment led to cost increases for both Haskell and Diageo.
Furthermore, the stressful nature of the relationship between the project teams resulted in contentious environment
that contributed to the departure of 20 Haskell team members upon completion of the project. Additionally,
many of the Diageo project team members were reassigned following the line strategy project and it took more
than five years to repair the customer relationship despite the success of the project. The project was ultimately
completed in 18 months and utilized more than 150 Haskell team members. When the project was finally completed
and turned over, Diageo commended Haskell for our flexibility and client focus. Haskell’s ability to be flexible and
maintain urgency and timeliness of decision makings is credited to the project team and staffing plan.
◆ Haskell created an executive steering team to manage the project as a program and communicate with the Diageo Steering team.
◆ Haskell used a dedicated procurement team to manage contracts with OEMs (Original Equipment
Manufacturers) and manage our commercial negotiations and obligations with Diageo Procurement.
◆ The project was managed as multiple sub-projects led by Project Management staff allocated by scope.
However the program was managed by the Haskell Steering team that had full financial oversight
and leveraged a shared contingency that was allocated as needed across the projects.
◆ Cost risk and liability limits were allocated to the separate projects, so as
milestones were achieved Haskell’s contract risk was reduced.

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