Realizing the benefits of a New Canada Infrastructure Bank

Last November, Finance Minister Bill Morneau announced, as part of the government’s fiscal update, plans to establish the Canada Infrastructure Bank. The initiative is part of the government’s comprehensive plan to invest $185-billion in infrastructure over the next 10 years. With an initial investment of at least $35-billion in the Infrastructure Bank, the government hopes to attract private sector investment at a ratio of $4 to $1. The announcement came on the heels of the first report from the Advisory Council on Economic Growth, established by Morneau in March 2016, in which one of the key recommendations was the establishment of an infrastructure development bank. The council’s recommendation, however, was that it act not only as a bank but also as a national centre of expertise on infrastructure projects. As the council noted in its report, while financing the projects is important, the government and its partners will need to do a better job of delivering new projects on time and on budget. It’s a sound move economically. Infrastructure projects are known to attract investment dollars and agencies can justify the investment by minimizing the risk to taxpayer dollars via strategic partnerships. Additionally, the establishment of the Canada Infrastructure Bank is consistent with the Trudeau government’s newfound focus on the concept of “deliverology,” whereby the process of setting priorities, and measuring and reviewing outcomes, drives government to actually execute on its commitments and produce results for the public. But the road from goal to execution for an initiative of this scale includes many factors that could make it a long and challenging one. What is exciting about the plans for the Canada Infrastructure Bank is the sharp focus on process improvement. The Advisory Council’s analysis demonstrates that following best practices can yield a 23 per cent savings on infrastructure spending. Further to a 2016 joint report by Project Management Institute and Boston Consulting Group, companies that report having mature benefits realization capabilities are 1.6 times more likely to realize project objectives and three times more likely to meet or exceed the targeted ROI on individual projects. Yet most organizations still struggle to realize the full potential of their strategies. PMI’s studies show that one in four organizations do not identify expected benefits before the start of a project, and only half have any idea whether their projects are delivering those identified benefits. PMI’s report on Benefits Realization Management also notes that many organizations continue to focus on executing individual projects and judge their performance using traditional output-driven metrics such as time, scope, and budget. However, what gets lost along the way is a clear understanding of whether the projects are truly helping the organization achieve its ultimate strategic objectives. Benefits management helps maximize value by incorporating accountabilities across stakeholders to identify, execute, and sustain strategic outcomes. Canada’s Treasury Board Secretariat is taking these elements seriously as part of its policy reset initiative that is evaluating government policies relating to project and programme management. The Canada Infrastructure Bank will need a deliberate approach for how it selects and manages infrastructure projects. Three elements are critical: Manage the portfolio of projects based on real strategic outcomes—specifically value creation. Projects that come in on time and under budget may be counted as wins based on traditional metrics, but may no longer be connected to the current strategy. A broader view of performance includes an organization’s benefits realization maturity level, which involves the collective process of identifying benefits at the outset of a project and ensuring, through purposeful actions during implementation, that the benefits are realized and sustained once the project ends. Create space for meaningful dialogue among senior-level executives/municipal and provincial government leaders, business owners, and project managers. Transparency on how well projects are helping to achieve strategic outcomes creates space for dialogue and enables senior leaders to have broader strategic discussions early on and make course corrections. Drive executive sponsorship. Insist on senior executive sponsorship. Actively engaged executive sponsors continue to be the top driver of whether projects meet their goals. When organizations embark on projects and programmes, they do so with a clear mission: to add value, advance strategies, and increase competitive advantage. The more mature they are with project management, the more likely they will achieve their goals. Like any other organization, the Canadian government and specifically, those responsible for running the Canada Infrastructure Bank, may be practicing good strategy development and good project management. But in order to truly succeed, they must link the two to deliver on well-intentioned promises. Mark A. Langley is president and CEO of the Project Management Institute. The Hill Times Editor's Note: This piece has been changed to update the byline with the correct author's name.

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Realizing the benefits of a New Canada Infrastructure Bank

Prioritizing projects and measuring outcomes for successful delivery.

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