Faculty Economics and Business

Chair Technology and Operations Management

Master Thesis

Topic:

DRIVERS AND BARRIERS OF THE KPI-DEFINITION

WITHIN AN OKR-FRAMEWORK IN INFRASTRUCTURE

PROJECT COMPANIES

Submitted by: Katharina Ackfeld

Student number: 4482689

Supervisor: Dr. Nick Szirbik

Co-assessor: Prof. Dr. Christos Emmanouilidis

Submission date: 21-06-2021

Word count: 11,836

II

Abstract

Infrastructure project companies often face the problem of meeting their production target.

Since the management of a project portfolio is complex by nature, overruns often occur. Often,

the reasons lie in a non-functioning KPI system according to which management is carried out.

To achieve the set production target, the uncovering of drivers and barriers for the KPI-defini-

tion is essential. Research is conducted with an exploratory approach based on a case study.

Specifically, data are collected by conducting semi-structured interviews. The results of the

study reveal that the factors complexity, proactive use of data, top management support, effec-

tive communication and accountability are among the five main drivers and barriers of KPI-

definition. Limitations of the present study invoke, among others, the timing of data collection

and the lack of data validation. In future, it is useful to adopt the design of a KPI framework

with concrete drivers and barriers that can be used for infrastructure project companies in gen-

eral.

Keywords: KPIs and portfolio management of infrastructure project companies; performance

management criteria of multi-projects in infrastructure companies; OKR as framework for

portfolio management; OKR method and infrastructure project companies

III

List of content

Abstract ........................................................................................... II

List of content ................................................................................. III

List of figures ................................................................................... V

List of abbreviations ........................................................................ VI

1 Introduction ............................................................................... 1

1.1 Initial situation – drivers and barriers of the KPI-definition within

infrastructure project companies ............................................................... 1

1.2 Study overview of drivers and barriers of KPIs in infrastructure projects ....... 1

1.3 Aim of the paper and research question ...................................................... 2

1.4 Procedure in developing a framework of drivers and barriers of KPIs

within infrastructure project companies ..................................................... 2

1.5 Structure of the paper ............................................................................... 3

2 KPI, OKR, project portfolio management and project-based

companies – Theoretical background .......................................... 4

2.1 KPI – definition, aim, process and characteristics ....................................... 4

2.2 OKR – definition, connection to MBO, components and procedures ............. 5

2.3 Project portfolio management – definition, aim, main activities .................... 6

2.4 Project-based company – definition, aim, differences towards functional

organizations, challenges .......................................................................... 7

3 State of research regarding KPI-definitions in infrastructure project

companies .................................................................................. 9

3.1 Procedure for selecting and evaluating relevant studies ................................ 9

3.2 Findings of the study review ................................................................... 10

3.3 Research gaps with respect to drivers and barriers of KPI-definitions in

infrastructure project companies ............................................................. 14

4 Methodology of the empirical analysis of drivers and barriers in the

KPI-definition of infrastructure project companies .................... 15

4.1 Derivation of the detailed questions for the analysis .................................. 15

4.2 Selection and justification of the research methods ................................... 16

4.3 Presentation of the case study company and its challenge .......................... 18

4.4 Selection of the interviewed person set .................................................... 18

4.5 Presentation of the interview guideline and justification of the questions ..... 19

4.6 Procedure for the analysis....................................................................... 20

5 Results of the definition of drivers and barriers of KPIs within

infrastructure project companies .............................................. 21

5.1.1 Business process-related factors as drivers or barriers of KPI-

definitions ................................................................................... 21

IV

5.1.2 Soft skills factors as drivers or barriers of KPI-definitions ................ 25

5.1.3 Company-related factors as drivers or barriers of KPI-definitions ...... 30

5.1.4 External factors as drivers or barriers of KPI-definitions .................. 30

6 Discussion ................................................................................ 31

6.1 Main drivers and barriers ....................................................................... 31

6.1.1 Business process-related factors as drivers or barriers of KPI-

definitions ................................................................................... 31

6.1.2 Soft skills factors as drivers or barriers of KPI-definitions ................ 32

6.2 Implications and recommendations for action ........................................... 33

6.3 Limitations ........................................................................................... 39

6.4 Future research ...................................................................................... 40

6.5 Summary of the drivers and barriers relevant for KPI-definition in

infrastructure project companies ............................................................. 41

7 Conclusion ............................................................................... 42

List of Appendices .......................................................................... VII

Appendix ...................................................................................... VIII

List of references ........................................................................... XIV

V

List of figures

Figure 1 - Portfolios, programs and projects ................................................................ 6

Figure 2 - Functional vs. project-based organization ................................................... 7

Figure 3 - Types of project organization ....................................................................... 8

Figure 4 - Conceptual model based on evaluated studies .......................................... 16

Figure 5 - Complexity - order entry and change within the process ........................ 22

Figure 6 - Complexity - building permit process ........................................................ 23

Figure 7 - Proactive data use - inadequate risk management ................................... 23

Figure 8 - Proactive data use - missing use of data analytics .................................... 24

Figure 9 - Proactive data use - missing use of general contractor utilization

board ....................................................................................................... 25

Figure 10 - Accountability - process when threshold values are exceeded............... 28

Figure 11 - Accountability - missing implementation of process optimization ........ 29

Figure 12 - Accountability - missing acceptance and uncertainty of

responsibility .......................................................................................... 29

Figure 13 - Recommended order process .................................................................... 33

Figure 14 - Recommended building permit process ................................................... 34

Figure 15 – Recommended risk management ............................................................. 34

Figure 16 – Recommended use of data analytics ........................................................ 35

Figure 17 – Recommended use of general contractor utilization boards ................. 36

Figure 18 - Recommended “sites above thresholds process” .................................... 37

Figure 19 – Recommended “securing general contractor resources process” ........ 37

Figure 20 - Recommended accountability procedures ............................................... 38

VI

List of abbreviations

CSFs Critical Success Factors

KPI Key Performance Indicator

OKR Objectives and Key Results

RII Relative Important Index

1

1 Introduction

1.1 Initial situation – drivers and barriers of the KPI-definition within infrastructure

project companies

Companies executing infrastructure projects often face the problem of delays and cost overruns

(Mohamid & Bruland, 2011; Rathi & Khandve, 2014; Amandin & Kule, 2016). Factors dis-

cussed in this context include poor coordination among stakeholders involved, financial issues,

and delays in decision making (Alhomidan, 2013; Chan & Kumaraswamy, 1997).

Apart from the factors that influence the success of an individual infrastructure project, compa-

nies that carry out these types of projects are often structured project-based. These companies

manage many projects simultaneously and thus concentrate on a project portfolio to achieve

high production output. (Lindkvist, 2004; Turner & Keegan, 2001) While the characteristics of

single infrastructure project failures have been extensively researched in literature, the focus

has rarely been on critical factors of multi-project management in infrastructure. (Blismas et

al., 2004; Patanakul & Milosevic, 2008).

It is often argued that managing a project portfolio is challenging and complex (Pennypacker

& Dye, 2002). Assuming that the key project management elements of individual infrastructure

projects are not in question, the success of the project portfolio often depends on effective man-

agement at strategic level (Garland, 2009; Turner, 2009). To control the company goal of reach-

ing a specified number of production quantity, and therefore the finalization of many individual

projects of the portfolio, key performance indicators (KPIs) are used (Parmenter, 2015, p. 87).

Considering that the problem is likely to originate at management level, the existing KPI-defi-

nition and project implementation approaches are considered inadequate to achieve business

objectives (Blismas et al., 2004). Of the various project management approaches available, the

use of Objective and Key Results (OKR) offers potential to provide the framework for perfor-

mance management. (Doerr, 2018, p. 120).

1.2 Study overview of drivers and barriers of KPIs in infrastructure projects

Insights into drivers and barriers of KPIs that need to be considered in the framework of a multi-

infrastructure project portfolio to achieve the set production target is the goal of this paper. Until

now, numerous authors have dealt with drivers and barriers of KPIs of single infrastructure

projects and OKR as agile project management method.

2

Derakshan et al. (2019) examined the position of stakeholders in project governance by ana-

lyzing 87 articles. Similarly, Oppong et al. (2017) conducted an extensive literature review to

find out various drivers and performance indicators affecting the performance of construction.

Next to this, Unegbu et al. (2020) investigated the relationship between performance and criti-

cal success factors (CSFs) of construction projects by means of a survey. Likewise, Durdyev et

al. (2017) conducted a survey to find out critical factors relevant for construction project delays

in Cambodia. Yeung et al. (2007) focused with their survey on performance measurement fac-

tors of partner projects in construction in Hong Kong. Horlach et al. (2019) developed design

goals and principles for achieving agility in portfolio management. Radonić (2017) investigated

the correlation of personal success value on firm success value when using the agile project

management method OKR.

1.3 Aim of the paper and research question

In literature, no studies can be found that investigate drivers and barriers for KPI-definition on

achieving a set production target of infrastructure projects from a multi-project management

perspective. The analysis of these performance drivers and barriers within the development of

a framework at management level will assist in closing this research gap.

Therefore, the research question is:

“Which factors have what influence as drivers or barriers on achieving the production target

by changing the KPI-definition within an OKR-framework of infrastructure project compa-

nies?”

1.4 Procedure in developing a framework of drivers and barriers of KPIs within infra-

structure project companies

Given the complexity of the topic, no homogeneous literature can be found. As case studies can

be used to examine unexplored situations including multiple variables, the approach is used to

collect primary data (Yin, 2018). To qualify for the study, the case study company must meet

certain criteria. The company which operates in the infrastructure sector must be organized

project-based. Therefore, its daily business should consist of managing a portfolio of projects

and it has already been doing for several years.

The case study firm used in this paper provides the framework and data source to answer these

research questions. In addition, insights are gained into factors that act as drivers or barriers of

KPI-definition of achieving the production target within an OKR framework of infrastructure

project companies.

3

The aim of this paper is to provide insights into critical factors of KPI-definition, considering

the multi-project management portfolio and the achievement of the production target of one

infrastructure project company. Additionally, solutions are proposed to overcome barriers and

to strengthen drivers. The outcome is a catalogue of barriers and drivers and a second catalogue

of measures. Infrastructure project companies managing a portfolio of infrastructure projects

can benefit as the outcome offers guidance on how KPI-definition should be modified to ensure

production target achievement.

1.5 Structure of the paper

After the introduction, the second chapter discusses theoretical principles. In the third chapter,

the current state of research is presented. The fourth chapter describes the procedure of the

empirical analysis. This includes the derivation of the interview questions, the determination of

the interview partners and the description and justification of the methods used to assess the

interviews. Chapter five contains the results of the analyses which are presented in detail. In the

discussion part, the results are compared with the current state of research and critically exam-

ined. The discussion section also includes limitations, further research and implications. The

paper closes with a summary, a conclusion and an outlook.

4

2 KPI, OKR, project portfolio management and project-based companies

– Theoretical background

2.1 KPI – definition, aim, process and characteristics

Key performance indicators (KPIs) are assigned to performance management, derived from the

strategy of an organization, and are used to measure overall organizational performance (Arm-

strong, 2006, p. 4; Cokins, 2004, p. 53). Parmenter (2015) adds that KPIs are only those indi-

cators that relate to the aspects of organizational performance. They are most important to the

current and future success of an organization. In addition, KPIs are a navigation system for

managers as they assist in discovering areas for improvement (Marr, 2012, p. xxv).

The aim of a KPI system is to provide a strategic, operational and financial overview. In addi-

tion, progress becomes visible and space for feedback is created. At the same time, an improved

decision-making process is established. Lastly, the application of a KPI system also aims to

ensure long-term performance consistency and increased motivation (Cokins, 2004, p. 3; Par-

menter, 2015, xvii).

According to Nagyova & Pacaiova (2009), Franceschini et al. (2007), Procurement Executives'

Association (1999) and Armstrong (2006), a leading KPI system includes the following char-

acteristics:

▪ a regular reporting rhythm

▪ a clear target setting

▪ underlying reliable data

▪ a clear definition of KPIs

▪ a high level of data significance

▪ effective communication between stakeholders

▪ an open organizational culture

▪ top management support

▪ a clear allocation of responsibilities

▪ a limited number of KPIs

▪ the encouragement of competence and growth development

▪ proactive and reactive use of data

▪ empowerment of employees

▪ a reduced complexity of business processes

5

2.2 OKR – definition, connection to MBO, components and procedures

Objectives and Key Results (OKR) is an agile framework used by organizations to achieve their

goals. It was developed by John Doerr and Andy Groove in the 1980s. With OKR it is possible

to develop a company strategically, to close the gap between long-term goals and operational

activities, and to engage involved employees in a self-committed way. Today the framework is

successfully used by many growing companies such as LinkedIn, Google, Twitter and Zalando

(Solomon & Blumberg, 2020, p. 16).

Basically, OKR is a further development of the Management by Objectives (MBO) method in-

troduced by Peter Drucker in 1954. The aim of Drucker was to link operational performance to

corporate goals. Therefore, managers themselves formulate goals for their own department,

simultaneously linking them to the next higher level. This results in a cascade effect (Roth,

2009, p. 36; Niven & Lamorte, 2016, pp. 3). In intervals of one year, managers are encouraged

to measure their progress and to adjust their performance (Mello, 2019, pp. 15).

Groove adapted the MBO approach by limiting the number of objectives. According to him,

focus is key. Increasing performance measurement to quarterly cycles is another adaptation.

This allows feedback to be converted faster and allows the company to adapt more quickly to

environmental settings. What is more is that targets are not only set top-down, but also bottom-

up. (Niven & Lamorte, 2016, p. 5).

OKR is based on core values. Companies can only grow sustainably if there is a common ori-

entation towards the strategic corporate goals, as well as towards the goals of the individual

departments. Therefore, "alignment" is a central component. Further values are "transparency"

and “commitment”, which lead to high productivity and team spirit (Doerr, 2018, pp. 18).

In addition to the values, the following events belong to the OKR cycle, which are carried out

by the role "OKR Master":

• OKR Planning

• OKR Weekly

• OKR Review

• OKR Retrospective

Progress is recorded in a tool called an OKR list, which records the percentage progress. OKR

planning is often done on a three-month cycle but can also be adjusted as needed (Niven &

Lamorte, 2016, p. 102).

6

2.3 Project portfolio management – definition, aim, main activities

Project portfolio management, also named multi-project management, is aligning the portfolio.

It consists of multiple programs and projects used to achieve the strategic goals of the organi-

zation. In general, project portfolio management activities consist of identification, monitoring,

evaluation, integration, selection, prioritization, balancing, authorization, transition, control and

termination of portfolio components (Project Management Institute, 2017, p.5). Project portfo-

lio management is defined as managing the set of programs and projects that are carried out in

total in an organization (Rajegopal et al., 2007, p. 12).

Figure 1 - Portfolios, programs and projects (Project Management Institute, 2017)

The objective of project portfolio management is to balance conflicting portfolio components

and to allocate resources including personnel, finances, assets and knowledge according to or-

ganizational capacity as well as given priorities (Project Management Institute, 2017, p. 5; Ra-

jegopal et al., 2007, p. 11). Based on this, a decision is made as to which project initiatives

should be funded, maintained or eliminated (Rajegopal et al., 2007, p. 13).

Moreover, Rajegopal et. al (2007) explains the main tasks of project portfolio management:

Next to the internal and external coordination of resources, reporting relevant data and progress

belongs to portfolio management as well. The development of a simple and understandable

process is crucial, too. As well Rajegopal et al. (2007) indicates that the assignment of roles

and responsibilities at strategic and operational level is as important as keeping track of the

progress of all projects within the portfolio at any time. Moreover, the implementation of a risk

management system that provides an overview of the overall risks and possible mitigation

measures for the individual projects is crucial in ensuring quality in portfolio management.

7

2.4 Project-based company – definition, aim, differences towards functional organiza-

tions, challenges

Project-based companies handle multiple projects at the same time. A typical example of an

industry in which project-based companies appear is the construction industry. Managing pro-

ject-based companies is challenging because knowledge-sharing between projects is required

and projects that initially seem separate and independent may compete. This is the case for

resources, attention, and commitment. As this is very complex, projects are often separated

from each other and carried out autonomously. (Blomquist & Söderholm, 2002).

The aim of project-based organizations is to manage a given number of resources to achieve

project goals successfully in time and quality. Thereby it is important to choose the right num-

ber of resources. With a lack of resources a company works ineffectively, while with too many

it works inefficiently (Turner, 2009, p. 123).

The main differences between functional organizations and project-based organizations can be

seen in figure 2. For example, while functional organizations are characterized by stability and

continuous operation, project-based organizations operate dynamically and focus on their tem-

porary arrangements. However, according to Lundin & Hartman (2000), nowadays, functional

organizations and project-based organizations are more closely related as theory depicts.

Figure 2 - Functional vs. project-based organization (Koskinen & Pihlanto, 2008)

Further, according to Turner (2009) several types of project-based organizations exist. They

can be structured into either functional line, project line, secondment matrix, coordinated matrix

or balanced matrix.

8

Figure 3 - Types of project organization (Turner, 2009)

One problem that project-based organizations often encounter is the individual and sometimes

specialized expertise of employees (Dougherty, 1992). For this reason, common understanding

is often hindered, which deteriorates the shared knowledge base. Project-based companies fre-

quently are said to operate in a highly decentralized manner and have a loose coupling (Orton

& Weick, 1990). Based on the challenges listed, project-based companies face a governance

challenge that has a lot of impact. (Koskinen, 2009, p. 7).

9

3 State of research regarding KPI-definitions in infrastructure project

companies

3.1 Procedure for selecting and evaluating relevant studies

The keywords for research were KPIs of infrastructure projects, KPIs of construction projects,

performance measurement in infrastructure projects, and OKR as a project management method

for companies. Only a few studies were found for the keywords infrastructure projects and KPI.

Their focus was on executing individual construction projects rather than an entire project port-

folio.

Only studies from 2007 onwards were included in the evaluation. In addition, emphasis was

placed on the fact that the studies investigated had conducted empirical surveys. In two studies,

this criterion could not be met. These have been carried out by detailed literature review. Studies

focusing on the target group "executives" were particularly relevant, since they are considered

the main actors in governance of multi-project management in infrastructure companies and

thus provide insights into practice. The Google Scholar and EBSCO search catalogues were

used to find relevant studies.

The evaluation of the studies followed the Harris Cooper approach, proposing that the most

important contents of the studies have to be collected. This includes the factors studied, the

models used, the sample, the methodology, the results, and open questions (Cooper et al., 2019).

First, the studies of the authors Derakshan et al. (2019) and Oppong et al. (2017) were reviewed.

In both studies, the authors conducted extensive literature reviews of 87 and 110 articles, re-

spectively. Derakshan et al. (2019) focused on the position of stakeholders in project govern-

ance while Oppong et al. (2017) conducted analyses on various drivers and performance indi-

cators of stakeholder management that affect the performance of construction projects. De-

rakshan et al. (2019) developed a conceptual framework that highlights the roles and relation-

ships of stakeholders in project management internally and externally. Contrary to this, Oppong

et al. (2017) present a conceptual model to measure the success of stakeholder management

performance in construction projects.

Likewise, the empirical study of the authors Unegbu et al. (2020) was consulted to find con-

nections of project performance and CSFs in construction industry. They achieved to collect

221 completed questionnaires in Nigeria. The results were analyzed by using the Relative Im-

portance Index (RII).

10

The empirical studies of Durdyey et al. (2017) and Yeung et al. (2007) are also included.

Durdyev et al. (2017) investigated attributes of construction project delay and Yeung et al.

(2007) performance measurement of partner projects. The authors used 48 and 31 filled in ques-

tionnaires for analysis. These focused on the survey of contractors and consultants registered in

Cambodia Constructors Association and secondly the practitioners/ academics of the private,

public, infrastructure and academic construction sector in Hong Kong. For analyzing the results,

Durdyey et al. (2017) applied the RII, whereas Yeung et al. (2007) used the Kendall's Coeffi-

cient of Concordance.

Furthermore, the studies by Horlach et al. (2019) and Radonić (2017) were considered. First,

design goals and principles for achieving agility are derived in portfolio management by Hor-

lach et al. (2019). Secondly, Radonić (2017) investigated the dependence of personal success

value on firm success value by using OKR. Horlach et al. (2019) used the design science re-

search approach and Radonić used the case study approach. To achieve their goal, Horlach et

al. (2019) conducted a qualitative, cross-sectoral study by focusing on six interviews and a

focus group discussion. They also reviewed public and private records and then used existing

literature to validate the research extension. In contrast, Radonić (2017) applied the case study

approach by focusing on quantitative analysis using Pearson's r-correlation. Specifically, he

studied 20 participants from a case study company called FishingBooker.

The assessment focused on the collection of the factors studied, the data basis, the methods

used, and the results of the studies. The formulated need for research was also considered.

3.2 Findings of the study review

Several authors assessed drivers and barriers of KPI-definition of single infrastructure projects

and the role of OKR as management method in companies. An overview of the most important

studies and their results is presented below.

In their study, Derakshan et al. (2019) examined the role of stakeholders in project management

inside and outside the organization. The results include the provision of a conceptual framework

demonstrating relationships of internal and external stakeholders on project, portfolio and or-

ganizational level. It could be proven that the implementation of strategic decisions on portfolio

level influences practices of stakeholders on project level.

Furthermore, Oppong et al. (2017) focus on stakeholder management in construction industry.

Stakeholder management performance attributes are presented based on a conceptual model,

11

which includes performance objectives, success factors, and performance indicators that can be

used to manage stakeholder management performance in construction.

Unegbu et al. (2020) investigated the relationship between project performance measures and

critical success factors of construction projects for the construction industry in Nigeria. Ques-

tionnaires were used to obtain data on 19 project management performance measures and 54

CSFs on a five-point Likert scale. The main findings reveal that customer-related factors have

a direct impact on project performance. Moreover, external environmental factors have a direct

impact on project performance and contractor-related factors have a direct impact on project

success. Further, project planning and management factors directly influence customer satis-

faction and project manager-related factors have a direct impact on project performance.

Contrary, Durdyev et al. (2017) used residential construction projects to investigate various

attributes for construction project delay. The results demonstrate that lack of materials at the

construction site, unrealistic project planning, late delivery of materials, lack of skilled labor,

complexity of the project, absence of labor, late payments by the owner for completed works,

poor site management, delays by subcontractors and accidents due to lack of site safety are cited

as the main causes of project delays in Cambodia.

Yeung et al. (2007) developed a model to objectively measure the performance of partnering

projects in Hong Kong. The results show seven weighted KPIs assessing the success of part-

nering projects in Hong Kong. The derivation of a composite Partnering Performance Index

also took place to provide a comprehensive assessment of partnering performance.

Horlach et al. (2019) derived design principles for an agile portfolio management system. Pre-

viously, no approaches to principles based on proactive enterprise systems have been identified

to provide insights into aligned portfolio practices or generalizable statements for an agile or-

ganizational set-up. Components of the design cycle are for example the enterprise level, do-

main level and team level.

Radonić (2017) used a case study company to measure the correlations between the company's

goals and the employees' personal goals through the implementation of OKR as an agile man-

agement method. The results reveal the significance of the bottom-up management concept

through the correlation between personal development, the success value of individuals and the

success value of the company.

Durdyev et al. (2017) demonstrate that the top ten reasons for project delays are lack of mate-

rials on site, unrealistic project planning, late material deliveries, lack of trained staff, staff

12

absenteeism, weather impact on construction activities, design changes, supplier delays and

accidents due to lack of site security. Interestingly, the project planning factor is also found in

the study by Unegbu et al. (2020). They validate 15 of 18 tested hypotheses on the topic between

CSF and its relation to project performance as well as to project success. Among them, they

can prove that project planning and management have a positive influence on project perfor-

mance. Furthermore, according to their results, contractor-related factors have a positive influ-

ence on project performance, which also correlates with the results of Durdyev et al. (2017).

Among their top ten factors there is also the delay caused by suppliers.

Other significant finding of the study by Unegbu et al. (2020) is that project manager-related

factors strongly influence project performance. The path coefficient of 77.26 can prove this. In

addition, consultant-related factors have a strong positive influence on project performance

with 77.4 and thus represent the highest value. Furthermore, external environmental influences

also play a role in influencing project performance but not its success. The factor weather in-

fluences is again found in the results of Durdyev et al. (2017). However, the three hypotheses

that clients, consultants and the external environment directly influence project success were

disproved by Unegbu et al. (2020).

Similarly, Yeung et al. (2007) studied success factors for construction projects in Hong Kong.

Their results indicate that the top seven KPIs, ranked according to their weighting, are time

performance, cost performance, top management commitment, quality performance, trust and

respect, effective communication and innovation and improvement. Time performance is the

highest weighted factor with 0.167 and innovation and improvement is the lowest weighted

factor with 0.106. Interestingly, the factor top management commitment can also be found in

the study by Oppong et al. (2017).

In their study, the authors identified 22 performance factors based on a literature review that

have a critical influence on project results. Among them is the factor management monitoring

and response. This confirms the importance of the continuous involvement of this hierarchical

level. In addition, the factor effective communication can also be found. It is also part of the

most important factors of Yeung et al. (2007). It is also visible that smooth project facilitation,

innovation enhancement and trust and respect relationship are also found among the perfor-

mance factors which are reflected in the evidence of the other authors. In addition to the factors

referred to, it is noticeable in the study by Oppong et al. (2017) that factors such as uncertainty

and risk mitigation as well as improved organizational foresight play a significant role.

13

Horlach et al. (2019) also had these insights. With their study, they contribute to closing a sig-

nificant gap in research regarding the application of agile methods, especially OKR, for portfo-

lio management in practice. They can also prove that the expansion of information by innova-

tion serves to improve actions. The design components of Horlach et al. (2019) consists of the

portfolio system, processes as well as structures and roles. Furthermore, they present a need for

a multi-level cross-functional portfolio governance body. This ensures coordination among the

stakeholders and thus confirms the findings of the study by Derakshan et al. (2019), who ex-

plicitly deal with the question of what influence project governance has on project success.

Their research confirms that the correct inclusion of project governance initially means project

success and, in later stages, organizational success.

Horlach et al. (2019) additionally contribute to the research by emphasizing the importance of

short and coordinated portfolio cycles for harmonized planning, which fits in the previously

mentioned factors of effective planning as a success factor. In addition, top management sup-

port can also be found here, as a coordinated autonomous portfolio decision-making process is

crucial for success. Therefore, it becomes clear that the components that should be considered

for the implementation of agile methods in companies correspond to many of the critical factors

of the previously mentioned factors.

Radonić (2017) confirmed the usefulness of OKR on company success. In his study, he exam-

ined the correlation between company goals and personal goals in relation to OKR. It could be

shown that the correlation between the personal success score and the company success score

per quarter has a medium correlation of r=0.55. This means that the hypothesis could be con-

firmed, even if only on a low level of significance. Furthermore, personal development and the

influence of OKR were tested. This could be confirmed with a correlation coefficient of r=0.75,

which indicates that the method provides motivation among the employees. Finally, the corre-

lation between the number of OKRs and the company's success was measured. This hypothesis

can be rejected, as no significance could be proven.

14

3.3 Research gaps with respect to drivers and barriers of KPI-definitions in infra-

structure project companies

The assessment of the studies available demonstrates that some research gaps exist. These gaps

can be closed by future research and are presented in the following.

Durdyev et al. (2017) suggest investigating which concerns are most relevant to project delays

and how these can be minimized. Contrary, Oppong et al (2017) proposes to take care of vali-

dating their model and to execute an empirical test of the variables based on real construction

projects in future. Moreover, it is suggested to examine more complex relationships among the

attributes to determine which performance goals were achieved and to illustrate how success

factors are related to performance goals.

In addition, Unegbu et al. (2020) suggest investigating whether all or part of the structural

equation model is suitable for application in other countries. To highlight possible similarities

and differences in using the same approach, Yeung et al. (2007) recommend considering geo-

graphic locations other than Hong Kong in future studies.

Following the suggestion of Derakshan et al. (2019), future governance researchers should have

a broader perspective when choosing a theoretical perspective that covers the social and psy-

chological aspects of managing external stakeholders.

Radonić (2017) states that in future there is a need to investigate the motivation of employees

during OKRs as well as the duration of OKR implementations in complex, non-technical sys-

tems. Horlach et al. (2019) emphasizes that for generalization, future validation of the results

is necessary. Furthermore, an extension of knowledge about portfolio management and its links

with agility should be analyzed related to processes such as investments, architecture and pro-

curement.

Considering all the above suggestions for future research, the result is a framework whose prov-

ability is still questionable and thus has not yet been scientifically tested. The evaluation of the

existing studies reveals that drivers and barriers of KPI-definition for production target achieve-

ment of infrastructure project companies have not been explored yet.

15

4 Methodology of the empirical analysis of drivers and barriers in the

KPI-definition of infrastructure project companies

4.1 Derivation of the detailed questions for the analysis

The aim of this research is to gain insights into drivers and barriers for KPI-definitions relevant

for production target achievement within an OKR framework for infrastructure project compa-

nies. To achieve this, it is necessary to find out which factors have which influence as drivers

or barriers for KPI-definitions. The research question is therefore:

“Which factors have what influence as drivers or barriers on achieving the production target

by changing the KPI-definition within an OKR-framework of infrastructure project compa-

nies?”

To investigate the question further, four detailed questions were formulated. These are used to

determine the factors that have an influence as drivers or barriers for the KPI-definition on

production target achievement within an OKR framework of infrastructure project companies.

• Which business process-related factors have which influence as drivers or barriers on

KPI-definition of infrastructure project companies?

• Which soft skills factors have what influence as drivers or barriers on KPI-definition of

infrastructure project companies?

• Which company-related factors have what influence as drivers or barriers on KPI-def-

inition of infrastructure project companies?

• What external factors have what influence as drivers or barriers on KPI-definition of

infrastructure project companies?

For this reason, a conceptual model was developed based on the state of research of the seven

selected studies (Figure 4). It contains the drivers and barriers of KPI-definitions of infrastruc-

ture projects, which led to agreement in the studies. Based on this model, the results analysis as

well as the evaluation of the data collection take place.

16

Figure 4 - Conceptual model based on evaluated studies (image created by author)

Based on the conceptual model, relevant drivers and barriers for KPI-definition are tested.

4.2 Selection and justification of the research methods

In general, a distinction of the data type is made between exploratory or explanatory research

(Ghauri et. al, 2020, p. 63). As the research field of drivers and barriers in KPI-definition for

achieving a set production target of infrastructure project companies has been little or not at all

explored, the problem fits to the main characteristic of exploratory research (Ghauri et. al, 2020,

p. 63, Bairagi & Munot, 2019, pp. 75).

Further, data collection can either be done by means of a quantitative or qualitative method

(Bairagi & Munot, 2019, pp. 8). Quantitative methods are characterized by measuring data with

the help of statistical methods. Contrary, qualitative methods are often chosen when studying

behavior, organizational processes or social environments (Ghauri et. al, 2020, p. 97, Bryman

et al., 2003; Layder, 1993; Sinkovics et al., 2008). By keeping the objective of this research in

mind, interactions and organizational processes of a companies’ KPI-set are to be investigated.

Therefore, qualitative methods will be applied.

From the qualitative methods applicable, the case study is assessed to be the most appropriate

method for analyzing the research gap at hand. According to Yin (2018), choosing the case

study approach is useful if previously unexplored situations, multiple sources of evidence and

the behavior of subjects are to be studied.

17

In general, the methods belonging to qualitative research distinguish between historical review,

group discussion, interviews, survey and experiment (Ghauri et. al, 2020, p. 99). In the absence

of historical data on the situation under study, only looking at secondary data can be excluded.

When deciding for observation as method, in literature it is mentioned that observations are

often executed over longer time periods. (Ghauri et al., 2020, p. 111). Therefore, conducting

interviews is the method chosen for data collection although gaining subjective insights need

to be considered as a main negative aspect. However, this critical aspect can be weakened as

the different perspectives allow the observation of many interesting angles (Creswell, 2009, p.

179).

In addition, the choice was made in the narrower sense of guideline-based interviews, since

these do not specify the questionnaire fully. They allow an orientation towards the prepared

questions. This prevents restricting the flow of conversation. It gives access to the subject's

imagination, interests or feelings regarding the topic (Bairagi & Munot, 2019, p. 135). Further,

it allows to react flexibly to unpredictable, previously unknown aspects (Creswell, 2009, p.

181). The prerequisite for the interviews is a sufficient examination of the theoretical approach,

the questions and the state of research of the project.

A small sample is already sufficient for gaining knowledge. However, a small sample of inter-

viewed people might end in less representativeness and is harder to be generalized in the end

(Hagg & Hedlund, 1979; Hillebrand et al., 2001; Thomas, 2015, p. 71). Therefore, to ensure

gaining representative data, a validation is recommended (Mukherjee, 2019, pp. 221). However,

due to the critical kind of data, the case study firm does not allow organizing a validation work-

shop. Nevertheless, an adequate familiarity with the theoretical approach, the research question,

and the state of research on the topic is a prerequisite to ensure the collection of qualitative data

from the interviews.

The requirements for a good interview guide are divided into clarity, a logical structure as well

as the comprehensible and open formulation of questions. Generally, the questions are divided

into introductory questions, main part and exit with review, outlook and thanks. Using the guide

guarantees that no important questions are left out during the interview (Mayring, 2002, pp. 25;

Ghauri et. al, 2020, p. 98).

18

4.3 Presentation of the case study company and its challenge

The case study firm is an infrastructure manufacturer that implements more than 1000 infra-

structure projects annually. For this reason, the company is structured on a project-by-project

basis. The production process, that each individual project passes through, ranges from planning

and approval to construction and handover.

The main challenge is to achieve the annual target of a high number of infrastructure projects

in time, with sufficient quality and at acceptable cost. Currently, it is apparent that many of their

infrastructure projects are delayed and require too much management effort. The individual

project itself is clearly defined, the technology to be used and legal issues have been clarified.

From an individual project perspective, there are no open questions.

Evidentally, the projects are well organized and there has been a long trail of successful projects

for years. Based on these facts, everything seems to be in order. However, the number of real-

ized projects is far from the number required. Only about 86% of the target are achieved. Fur-

thermore, has been considered that the number reached also includes provisional arrangements,

which would normally have to be excluded. It should also be noted that there has been changes

in the target during the year.

This directs the focus to project portfolio management and KPI-definition. The challenge seems

to lie in managing the entire project portfolio, which requires appropriate KPIs. For this reason,

it is worthwhile to investigate which drivers and barriers are relevant for KPI-definition to

achieve the set production target. Therefore, the chosen company fits the profile of a research

object.

4.4 Selection of the interviewed person set

Case studies are equivalent to the illustration of real events. They explain complex causal rela-

tionships and provide a holistic picture of the social world (Ghauri, 2004; Marschan-Piekkari

& Welch, 2004). The paper refers to drivers and barriers of KPI-definition in achieving the set

production target within an OKR-framework in infrastructure project companies.

For this reason, a real-life company is used to provide insights and serve as a case study. The

chosen infrastructure company is project-based and focuses on achieving the implementation

of many infrastructure projects per year. The answers to the guiding questions of the interviews

will lead to elementary and significant findings.

19

As qualitative research aims at making generalizable statements that go beyond the individuals

studied, and at investigating complex backgrounds as well as interaction models. Representa-

tiveness for a basic population is not applicable. The goal is to choose a group of people as

heterogeneous as possible for the study, with a maximum contrast in relevant characteristics

(Bairagi & Munot, 2019, p. 37; Charmaz, 1990, pp. 1162).

The selection of the interview partners will be based on the different roles along the production

process. Only executives are selected and in total eight individual interviews are conducted to

receive a variety in data. By interviewing the Head of Controlling, Head of Purchasing, Head

of Production, Head of Central Production Control, Head of Decentralized Production Control,

Head of Acquisition, Head of Planning and Head of Quality Assurance & Acceptance, elemen-

tary and significant insights can be gained for answering the main research question. Other

criteria, such as age and gender, will not play a role in the selection (Bairagi & Munot, 2019, p.

37; Byrne, 2001, p. 498).

Due to the current covid pandemic, the first contact has been made by inviting the identified set

of persons by direct calls. The interviews themselves were conducted by video calls. The eight

interviews took place over a period of three weeks. The respective interviews had a duration of

30 to 50 minutes.

4.5 Presentation of the interview guideline and justification of the questions

The structure of the interview guide is based on the four detailed questions. Accordingly, the

interview questions are formulated based on the elements of an ideal-typical KPI system men-

tioned in the theory chapter as well as on the factors discussed in the various papers of this

thesis. The guideline is structured as a catalogue of questions. These were formulated along the

given production process of the case study firm, relating on drivers and barriers to achieve the

set production target.

The formulation of the questions allows detailed answers. The frequence of the questions moves

from general to special as well as from concrete to abstract. With the initial question "If you

imagine the entire production process, where do you primarily see weaknesses?" An introduc-

tory question which is meant to serve as an icebreaker is formulated for various interview part-

ners. Afterwards, based on the different roles of the interview partners appropriate questions

were chosen out of the interview guideline prepared (Appendix 2).

20

To ensure comprehensive and precise answers, the company’s production process was analyzed

before. This increased the probability of receiving critical in-depth information about weak-

nesses of the production process.

4.6 Procedure for the analysis

Before conducting the interviews, the topic as well as the aim of the work will be introduced.

After agreement, the interviews will be recorded and transcribed. That ensures that all relevant

information is covered.1 After transcription, the coding process starts. The data collected are

analyzed by using content analysis according to Mayring (2002). He proposes a "summarizing,

explicating and structuring content analysis". As described in his paper, the material will be

reduced to the essential content and then summarized in categories. This enables text interpre-

tation and the associated answering of the research question based on a category system.

During data collection, questions relevant to the role of the respective interview partner were

selected from the previously prepared interview catalogue. To be able to use the text material,

the questions were assigned to the KPI concepts defined in the literature and in the state of

research part above.

After data collection, the results were analyzed, sorted and reduced, then the main findings were

presented in a table. Within the text, the focus was placed on the presentation of the five main

uncertainty factors that were determined based on the interview results. This enables concrete

conclusions and explicit recommendations for further action.

1 Due to the confidentiality obligation towards the case study firm, the transcripts will not be attached.

21

5 Results of the definition of drivers and barriers of KPIs within infra-

structure project companies

The key findings of the empirical research are presented below. Due to data confidentiality,

further detailed information cannot be attached.

5.1.1 Business process-related factors as drivers or barriers of KPI-definitions

According to the data, the factor complexity belongs to the main drivers or barriers for KPI-

definition to achieve the set production target. Several respondents raised concerns about the

ordering process and the lengthy building permission process.

In particular, the customer's unpredictable and package-based order leads to extremely high set-

up costs. Specifically, these higher set-up costs are caused by the fact that the quantity, the

region and the order type of each package are unknown. For this reason, there is a risk that the

preliminary work does not match the actual order.

"…So, if we are unlucky, they are all in the north and very few in the south. …It can

also be that they…(are)…spread over the country …(or) first in the East, and with a

long delay in the West. So, it is very difficult...the client also does not work continu-

ously on XX, but rather in packages..." (IP1)

Interviewee 1 explains why it is important for the production process to get more accurate and

earlier information from the customer.

"…To see, okay, I…need two or three more general contractors... That means I have

… one and a half to two years until the first one is built. Accordingly, if a customer

surprises us, it's difficult…. it's a very slow system..." (IP1)

In addition, changing the modification within the current production process also slows down

the process.

"...And then a ping-pong starts, a back-and-forth about what is really feasible. Then

you tell him back that it's not possible, you have to (change the plan). Then he

(changes the plan) but would still like it. And so it continues,..." (IP1)

Next, interview partner 1 points out that, together with the customer, the company works on a

system to predict earlier which orders will come in. However, there is still a lack of precise

information on region and order type.

22

"… where we are looking much more in advance… It will cover about 1000 sites...But

of course, we don't know where they are ..." (IP1)

Confirming this, interviewees 5 and 7 also state again that this still existing problem needs

further attention to finally solve it.

"… if we now had a plan for 2022 at some point and said, … so and so many sites in

the individual regions, … then of course we can act there in advance..." (IP5)

"... (Delivery is) not continuous right now… (we have) to see what we can do..." (IP7)

Figure 5 - Complexity - order entry and change within the process (image created by author)

The lengthy building permit process is also affected by complexity. Compared to other com-

panies, the average lead time until the building permit is obtained is very long, about 9 months.

In opinion of interviewee 3, the reason is the incomplete submission of building applications.

“... But when I talk to companies that do this full-time, they say it can be done in

three or four months...And we often notice that…the building authority say, some-

thing is still missing…” (IP3)

However, an idea exists how this process can be improved.

“… can we not already have checked…in the acquisition, whether it also fulfils all

the requirements for construction… check at the beginning,…which area clusters fall

into these areas, i.e. nature conservation…bird conservation, nature parks, etc..."

(IP3)

23

Figure 6 - Complexity - building permit process (image created by author)

Statements can also be made regarding the factor of proactive use of data. Interviewee 6 stated

that most of all, he misses early risk management based on data, which provides clarity and

does not wait for a reporting date.

"...this awareness is there, I think, quite early. But then to act in this way … I think

that's inadequate. For this, the times of the forecast or the planning are always

used...Earlier would be better..." (IP6)

Figure 7 - proactive data use - inadequate risk management (image created by author)

Furthermore, forecasting also plays a role in terms of proactive data use. Interview partner 1

wishes to focus more on data analytics methods to better predict future developments.

24

"...you can draw certain conclusions about the future from the…past. And not with a

look into a crystal ball … but with analytical methods. I would like to develop that

further..." (IP1)

Interview partner 7 mentions that there are problems with data history and changes in quantities

over the years needed, which is why there is too much variance in the data.

"… we often don't have enough data, especially with historical data, and then the

quality doesn't get any better … because the rollout has really changed a lot, what's

in it has become completely different. ... (and) due to this reorganization, somehow

certain reference areas cannot be found any more..." (IP7)

In addition, the partly unreliable data situation in the current IT system is reported.

"... is the milestone correct or whatever. And... thinking about plausibility in general,

that stinks..." (IP5)

Figure 8 - Proactive data use - missing use of data analytics (image created by author)

To get a better overview of the data set, interviewee 3 created a general contractor utilization

chart that enables him to see exactly which orders are in which status and thus improve control

and enables him to allocate orders.

"… I was astonished that a company that had the fewest employees… had the highest

number of orders in the quota…they were completely overloaded... " (IP3)

Interviewee 3 says that so far only he makes use of the dashboard and he has only been using it

for a short time.

"...This is also relatively new, I've only had it since this year..." (IP3)

25

Figure 9 - Proactive data use - missing use of general contractor utilization board (image created by author)

Based on the large negative influence of complexity and missing use of proactive data within

the process, it is evident that it strongly influences the KPI-definition. Therefore, the business-

related factors are among the main drivers or barriers in the KPI-definition.

5.1.2 Soft skills factors as drivers or barriers of KPI-definitions

Furthermore, according to the findings of the interviews conducted, the factor top manage-

ment support plays an important role regarding drivers and barriers of KPI-definition.

Based on the data collected, it appears that the situation concerning human resources in building

permit management is currently inadequate for some regions and should be reviewed by man-

agement again.

"... building permit issue needs to be looked at more deeply... The result of this cal-

culation was that XX actually needs three additional people…and according to the

existing key …it suit(s) the staffing I had..." (IP4)

Furthermore, the management decision of how to deal with the topic of building permit man-

agement took much time in the past.

"…It was discussed back and forth for a long time, do we do it, do we not do it, under

which conditions…" (IP4)

According to the interviews, it becomes clear that if there are problems with external partners,

the management level is also involved. However, whether this leads to the desired success is

questionable.

26

"... XX wasn't so excited about it, he probably spent a long time arguing with the

general contractor XZ. The effect is that I still can't get planning done earlier..."

(IP2)

"... I've gave him my opinion…(so he discussed it) in the general contractors’ XY

board meeting. But nothing happened, to be honest..." (IP2)

In terms of management support, there is also the question of how honestly facts are shared.

"... how risky - do I maintain these KPIs? How do I order my people to maintain the

topics?…And I think this is a psychological component, I think it also plays a very

big role in production reporting at the moment...Therefore, a KPI is not necessarily

a KPI..." (IP6)

However, interview partner 7 counters this fear.

"…in principle I have the impression that we deal with things openly and honestly…”

(IP7)

Interview partner 7 adds that being honest is not punished. On the contrary, it is bad to

hide problems.

“… honesty isn't punished...Yes, well, the only thing that is really not nice is to keep things

under the table and take away options for action …" (IP7)

Like top management support, the factor effective communication also belongs to the soft

skills factors. The results indicate that it is considered a driver or barrier in relation to the KPI-

definition of infrastructure project companies.

Many interview partners note that the interface with the customer is often tough, which leads

to numerous delays in the production process.

" ... that we have an incredible amount of intermezzo with the customer..." (IP7)

"... Because the matrix issue really drives me crazy. Sometimes they only have to

press a button, and they don't do it for months. It can sometimes be that a site is there

for half a year..." (IP2)

According to the interview partners, however, there are also delays due to a lack of coordination

with general contractors.

"… One is, of course, because the general contractor may simply be asleep, or is

inactive, or has sent it to the wrong place …" (IP1)

27

"… that the deficiencies are dealt with by our general contractors on their own, and

we don't have to keep asking, send out lists..." (IP8)

Moreover, it becomes visible that the internal interface to the general contractors needs to be

improved, too. The reason is that there is sometimes a lack of coordination between the man-

agement level and the operational level.

"… I know that there are these board meetings, especially for general contractor XY,

…but the meetings have an unconnected feeling. So, this- this- there is still a bit of

an interface missing for me..." (IP2)

Moreover, accountability is also a factor related to soft skills. Based on the interviews con-

ducted it is also regarded as a driver or barrier in KPI-definition.

First of all, regarding accountability, interview partner 2 mentions that for individual projects

which are above the normally agreed thresholds in terms of costs, accountability is not always

clearly defined. That slows down the process enormously.

"… So everyone is hiding away in some way. The project application has actually

been approved, but I can't get the offer through..." (IP2)

The process is also delayed because, depending on the amount of money, the right committee

must first be found.

“… And even they sometimes don't have decision-making authority. And then the

whole thing is somehow postponed again…” (IP2)

Interview partner 6 has a suggestion on how to shorten the process.

“… If the customer pays for it, …the order can be carried out. Then we will also get

the money. And if the customer doesn't pay, the site is not so important, and it won't

be built...” (IP6)

Furthermore, interview partner 6 wonders if this process is supported by IT.

“… I'm not sure if that one has good IT technical support either…” (IP6)

28

Figure 10 - Accountability - process when threshold values are exceeded (image created by author)

In addition, interview partner 5 states that the possibility of co-negotiating the supplier’s con-

tract when a new general contractor is selected may lead to a simplification of the process.

"… Bundling, bundling, … the question is why do I have to make it so complicated,

distribute it on so many…shoulders…” (IP5)

The only question is whether it is possible to also cover the technical part.

“… I can say little about whether this could also be done here from a technical point

of view...” (IP5)

According to his statements, it would lead to less coordination effort and therefore to a reduc-

tion in time.

“… The time I need for the internal coordination…I wouldn't need it if I negotiated

this part with the contractor...” (IP5)

However, so far it is questionable who will take responsibility for pushing this improvement

proposal forward.

“… (but) to be honest, it's as old as this business is old,... there are also many, many

… soft factors, arguments, reasons in it, where (someone has to have)…a lot (of)

passion … about the topic..." (IP5)

29

Figure 11 - Accountability - missing implementation of process optimization (image created by author)

In addition to accountability for individual process steps, interviewee 3 also refers to the general

readiness of taking responsibility.

"… In the beginning, people were completely irritated with me. Because, I say: Do it

yourself. So what do you need me for?…” (IP3)

Related to this topic, interview partner 7 remarks that it might still be unclear up to what point

someone can decide something and when permission should be obtained from the next higher

level.

"… I think that a lot of it is due to past experiences...I think you also really have to

practice that … what can you still decide yourself..." (IP7)

Figure 12 - Accountability - missing acceptance and uncertainty of responsibility (image created by author)

30

According to the results there is a lack of top management support, effective communication

and accountability. Therefore, soft skills factors are among the five main drivers or barriers in

KPI-definition to achieve the set production target.

5.1.3 Company-related factors as drivers or barriers of KPI-definitions

According to the database, company-related factors also influence the KPI-definition of infra-

structure project companies as drivers and barriers. However, these are not among the main

drivers and barriers for KPI-definition.

Poor data quality in the current IT system will be improved fast by the introduction of a new IT

system. In general, according to the interviewees the innovation and improvement factor

counteracts as currently data quality is low.

"… I hope that the process steps will be better documented, and that the quality of

the milestones (in the system) will be better...I hope that with the new system, through

certain automatisms, dependencies, etc., something like a planned deadline, etc., will

then be much better documented..." (IP6)

"… but that's what makes the evaluation so stressful at the moment, for everyone

involved…because you always have a resentment in the back of your mind, is this

really the case or has it been forgotten, that is still such a point..." (IP4)

"... still need to be better in terms of historization or data entry, but … this is already

very well integrated into the new system project..." (IP7)

Based on the results shown above, company-related factors are affected but are not among the

main drivers and barriers in defining KPIs.

5.1.4 External factors as drivers or barriers of KPI-definitions

The data obtained demonstrate that external factors affect the KPI-definition. However, no main

drivers or barriers for the KPI-definition of infrastructure project companies can be derived.

In terms of obtaining permit from municipality, interviewee 3 notes that the way the

building authorities work is generally very slow.

"... And they work according to the classic principles of today's civil servants, what's

on top…according to the order..." (IP3)

Interview partner 1 adds that each procedure is very individual.

31

“… And every building authority…also has its own preferences as to how they would

like something to be...” (IP1)

Moreover, the pandemic also has a negative influence on the length of the temporal procedure.

“…the building authorities are not as well staffed as they normally are. That means

you have to make a lot of phone calls to get a solution at all. And it can sometimes

take a year or more…” (IP1)

Based on the data obtained through the interviews, external factors are affected but are not

among the main drivers and barriers of KPI-definition.

6 Discussion

6.1 Main drivers and barriers

6.1.1 Business process-related factors as drivers or barriers of KPI-definitions

The answers to the questions in the interview guide demonstrate that the project portfolio is

highly complex as orders arrive uncoordinated in terms of time, place and quantity. For this

reason, a barrier for the KPI-definition exists. According to Unegbu et al. (2020), it was as-

sumed that the complexity factor is too insignificant to be considered a critical success factor.

However, a contradiction of this result is visible in the results analysis.

Research by Durdyev et al. (2017) provides a possible explanation for this result. Durdyev et

al. (2017) conclude that high complexity often leads to project delay. You speak of high com-

plexity when complex plans and schedules are used to manage the project. Conversely, this

means that a reduction of complexity is required to avoid delays.

The findings also reveal that the proactive data use is important and needs to be developed

further. Adequate risk management is just as important as controlling the utilization of general

contractors by dashboards or improving the forecast using data analytics methods. This expec-

tation is supported by Oppong et al. (2017). The more the proactive use of data is established,

the more likely it is to ensure the reduction of conflicts and uncertainties that affect projects and

their environment. According to their research, it becomes apparent that an understanding of

risks and the initiation of countermeasures should already take place in the planning process.

32

6.1.2 Soft skills factors as drivers or barriers of KPI-definitions

According to the results of the interviews, the factor top management support is also a critical

factor in the KPI-definition. The experience gained regarding this factor has a significant influ-

ence on the success of the project portfolio. To ensure success, top management needs to be

involved when needed and fast decisions are necessary. Unegbu et al. (2020) also confirm this

statement. If top management is not supportive, this is one of the top three reasons for project

delays. In addition, Derakhshan et. al (2019) state that a high level of top management support

favors stakeholder relationships and resource allocation decisions. If verified, the top manage-

ment support factor acts as a driver in the KPI-definition.

The results of the analysis reveal effective communication as another main influencing factor.

The results indicate that communication between the parties involved is tough and becomes

even more complicated by the high number of interfaces. The lack of effective communication

is thus a major barrier in achieving the set production target. This is also what the findings of

Durdyev et al. (2017) point out. They were able to prove that low communication between

stakeholders negatively affect the completion of construction projects in time. This statement

is also shared by Yeung et al. (2007). According to their research, the factor of effective com-

munication is one of the top seven factors in KPI-definition for success in construction projects.

The last main factor influencing KPI-definition of infrastructure project companies can be de-

scribed by "accountability". Coming from a hierarchical structure, it is difficult for employees

to recognize the degree to which decisions can be made independently. In addition, it is visible

that accountability is sometimes not clearly handed over. Derakhshan et al. (2019) highlight the

fact that the dependencies of process participants regarding handover and takeover of account-

ability should be clarified at the beginning and be transparent for everyone in order to ensure

success.

33

6.2 Implications and recommendations for action

The findings of this study can also be used in practice. They are particularly interesting for

several target groups of infrastructure project companies.

Improving the current order process

To reach the set target production volume, it is first advisable to obtain a significant improve-

ment of the current order process. The production unit should first prepare a presentation

which specifies the potential loss of possible sites as a result of an order process that the com-

pany has to deal with at short notice. Then, based on this presentation, the senior management

should have an in-depth conversation with the key customer. The goal of the conversation

should be to adjust the order process in such a way that key information such as time, place,

size and cluster is communicated in time. Also, the order, once placed, should not be altered.

Figure 13 - Recommended order process (image created by author)

Streamlining the building permit process

In order to shorten the often lengthy building permit process, senior management should de-

cide on the proposal to have the acquisition departments include environmental concerns in

their workflow from the beginning The rationale of the proposal is to only submit complete

applications in order to avoid the authorities needing to get back because of missing infor-

mation. Should senior management agree with this proposal, the central production control

unit should detail the workflow to be followed in the acquisition departments. The central

production control unit would also be responsible for communication this to all other produc-

tion departments There should also be an updated visualization, accessible for all employees on

the company's intranet.

34

Figure 14 - Recommended building permit process (image created by author)

Establishing an appropriate risk management

The production business unit should immediately install a risk management system to be used

in all departments. In their weekly meetings, managers should discuss risks as they emerge.

The risk management system should also include senior management to ensure its implemen-

tation across the whole company. Managers should notify their respective superiors of risks

they cannot handle. Also, managers should encourage their employees to discuss risks openly.

In addition, the introduction of OKR could help to streamline this process. OKR's various com-

ponents would ensure that vital information is communicated throughout the company. It is

therefore recommended that senior management decides on the implementation of OKR.

Figure 15 – Recommended risk management (image created by author)

35

Long-term implementation of data analytics

With respect to data analytics, senior management should first decide if, when, and to what

extent it should be implemented. If approved, the central production control unit should con-

duct a survey among all employees with the goal to find out which employees already have

experience with data analytics and are interested in getting involved. Based on this survey,

senior management should appoint a project leader. At the same time, it is important to ensure

that a reliable database is available. To this end, the person appointed should coordinate with

the team responsible for installing the new IT-system that everything is in place with respect to

a successful operation of analytics-based processes. It is of great importance that the data from

before the reorganization are fully recovered. Once such historical data will have been recov-

ered, variances would be reduced. Also, the introduction of data analytics could start earlier

Setting up the team, the appointed project leader should review the survey to identify potential

internal candidates before asking HR to hire external consultants. Forecasting would make a

good first use case. To get started, the data analytics team would meet with the people respon-

sible for the forecasts in order to define future collaboration and to identify optimization poten-

tials.

Figure 16 – Recommended use of data analytics (image created by author)

36

Achieving a company-wide use of general contractor utilization boards

The central production control unit should ensure that the dashboard is accessible across the

whole company. It should also offer pertinent trainings. The central production control unit

should create a second dashboard which shows the total utilization of all general contractors.

Production management could use this second dashboard for control purposes, while the pur-

chasing department could use it to ascertain if additional general contractor resources are

needed. All production departments should use the dashboards also to detect and prevent

risks at an early stage.

Figure 17 – Recommended use of general contractor utilization boards (image created by author)

Improving the process “sites above threshold values”

With respect to the process "sites above threshold values", the central production control unit

should make transparent who within the company is responsible for forwarding which docu-

ments to which deciding body. In addition, it should communicate when the various bodies

meet and which body decides on which amounts. All this should also be available in written

form accessible for anybody at any time. Also, the production management should inform the

customer of the costs that are the result of a complex and lengthy decision-making process The

goal is to create a sense of urgency in order to enter into a discussion with the customer about

improving the current workflow. Finally, the central production control unit should ensure

that employees are able to track the status of these sites in real-time.

37

Figure 18 - Recommended “sites above thresholds process” (image created by author)

Improving the process “securing general contractor resources”

With respect to the proposed improvement in the area of "securing general contractor re-

sources", the purchasing department, in a first step, should prepare a presentation for the

senior management. This presentation would highlight both, time savings but also potential

risks. Once senior management has agreed, the customer's approval must be obtained. Moreo-

ver, both parties should appoint two responsible persons from each side, one from purchasing

and one from production. This team would then define the terms and conditions which subse-

quently would constitute the basis for the infrastructure project company to negotiate with the

general contractors on its own. Senior management should set a time frame to ensure a speedy

implementation.

Figure 19 – Recommended “securing general contractor resources process” (image created by author)

38

Improved handover and acceptance of accountability

OKR allows for a quick identification of misunderstandings with respect to accountability. Any

questions concerning individual responsibilities can be addressed and resolved in the weekly

meetings. Assuming acceptance and active participation of everybody, OKR ensures that ac-

countability is communicated and made transparent across all hierarchy levels. Here, the OKR

Masters play a significant role. They regularly coordinate among each, thus facilitating an

alignment across the company. Another aspect with respect to accountability is that an outdated

mindset still exists in parts of the company due to years of strict hierarchy management. To

overcome this, specifically designed leadership trainings should be offered. As in the case of

the OKR implementation, also these leadership development programs should be accompanied

by the transformation department.

Figure 20 - Recommended accountability procedures (image created by author)

39

6.3 Limitations

Until now, there have been few findings on the topic of drivers and barriers in the KPI-definition

of infrastructure project companies regarding production target achievement. This thesis was

able to contribute some insights. However, the validity of the results is limited due to the spe-

cific time point at which the interviews were conducted.

The challenge is to identify data on long-term drivers and barriers which currently could not be

achieved. This requires monitoring and observing the actors along the production process by e.

g. conducting a three-month series of experiments.

Furthermore, a major deficit lies in the choice of the qualitative approach. By choosing guided

interviews and informing all interview partners about the initial situation beforehand, it was

possible to gain more detailed insights. However, the subjectivity of the statements made by

the individual participants should not be neglected.

In addition, the length of the interviews conducted indicates that further important insights

could possibly have been gathered. Due to the limited scope this was not possible. The short

time frame also meant that the number of interviewees had to be limited and validation was not

possible. Expanding beyond the eight interviewees and conducting a validation workshop with

additional employees of the company would have led to more precise data and to a confirmation

or revision of the collected findings.

The restriction to the company-related factors, business-related factors, soft skills factors, and

external factors with their respective sub-factors provided interesting insights. However, due to

the subjective view of the studies, it is possible that other interesting studies on the topic that

would have focused on different factors have been overlooked.

Moreover, only the five main influencing factors of the interview results were examined in

more detail. Further results were identified that have an influence on the KPI-definition as well.

However, due to the scope and data confidentiality, the detailed list could not be attached.

Finally, the selection of the participants should be considered. By selecting eight different in-

terview partners working along the production process, different perspectives and therefore

high data quality could be ensured. However, the extension to further focus groups, like the

management, might have led to even more qualitative results.

40

6.4 Future research

This study contributed to drivers and barriers in the KPI-definition of infrastructure project

companies. However, further efforts are needed to develop a model of concrete drivers and

barriers.

In short term, a more valid data base should be achieved. That can either be done by studying

the actors over a longer period through personal observation or by expanding the interviewed

persons set. By conducting a period-based analysis possible subjective variations in the state-

ments will be reduced. Further, a more valid data base can also be achieved by interviewing the

management or employees from the respective divisions. In this way, both the operational and

the strategic perspective can be integrated even more into the research.

In mid-term view, designing a KPI framework with concrete drivers and barriers usable for

infrastructure project companies is necessary. To achieve this, a company with the same pre-

requisites is to be chosen to validate the results. This ensures comparability and enables re-

searchers to answer the following research question:

Which principles do apply for an effective KPI system to achieve the set production tar-

get of an infrastructure project company?

Furthermore, in mid term, factors supporting or hindering OKR implementation in terms of

employee acceptance should be identified. Based on the knowledge gained, the use of OKR as

a framework contributes to achieving the set production target. Therefore, answering the fol-

lowing research question is relevant:

Which factors are relevant to achieve high employee acceptance through the introduc-

tion of the agile management method OKR as framework?

In long term, the quantitative effects of a changed KPI-definition according to the main drivers

and barriers identified needs to be specified. The quantitative contribution to the achievement

of the set production target should be investigated. Therefore, the research question is:

“What quantitative effects has the change of KPI-definition on achieving the set produc-

tion target of an infrastructure project company?”

41

6.5 Summary of the drivers and barriers relevant for KPI-definition in infrastructure

project companies

The research so far has mainly focused on the KPI constructs business-process related factors,

company-related factors, soft skills and external factors. The aim of this thesis was to uncover

drivers and barriers for KPI-definition to achieve the set production target of infrastructure pro-

ject companies. For this purpose, it was essential to identify which of the mentioned factors

have a main influence.

The results reveal that the main influencing factors lie in the KPI constructs business-process

related factors and soft skills factors. Results were also obtained for the remaining KPI con-

structs. However, these have less influence on KPI-definition of infrastructure project compa-

nies.

The influence of the factor "complexity" on the KPI-definition is mainly that orders are placed

unpredictably in terms of time, quantity and place. In addition, there are change requests during

the production process, so that the production potential is slowed down. Furthermore, the neg-

ative influence of the factor "proactive use of data" is obvious. An insufficient proactive use of

available data increases the risk of leaving further expansion potential behind.

The factor "accountability" is also considered a major critical factor for KPI-definition. The

results reveal that the scope of responsibility of individuals is sometimes unclear. Consequently,

there is a high demand for good coordination between the hierarchical levels, which will avoid

unnecessary delays in execution.

42

7 Conclusion

Regarding the achievement of the set production target of infrastructure project companies,

company related factors, business related factors, soft skills factors and external factors are

both, drivers as well as barriers in the definition of KPIs. Here, business related factors and soft

skills factors stand out.

It has been shown that an overly complex order process containing many unknowns has had a

particularly negative impact. As important parameters of the order packages were not known

until the order was placed, a multitude of sites underwent a preliminary screening and prepara-

tion process thus committing unnecessary resources. As a result, processes were delayed, and

the achievement of the set production target was severely jeopardized. For this reason, the order

process should be altered in such a way that important parameters (time, size, place, cluster)

are known early on in order to be able to efficiently manage the production process.

As demand for realizing a high number of infrastructure projects in the shortest possible time

will continue to increase, refocusing on the drivers and barriers of their KPI-definitions will

become crucial for infrastructure project companies to remain competitive. An overview of the

main drivers and barriers of their KPI-definition supports management to achieve the set pro-

duction target.

This alone, however, does not suffice. Other characteristics of an ideal KPI system, such as

regular reporting or limiting the number of KPIs, are of great importance as well. (Nagyova &

Pacaiova, 2009; Franceschini et al., 2007; Procurement Executives' Association, 1999 & Arm-

strong, 2006)

It should be emphasized that it has not been possible to validate the findings of this study. Future

research should focus on systematizing divers and barriers, thus contributing to a KPI-frame-

work that could be widely used by infrastructure project companies.

VII

List of Appendices

Appendix 1: List of interview partners.................................................................... VIII

Appendix 2: Interview guideline ................................................................................. IX

Appendix 3: Overview of recommendations for action as table .............................. XI

VIII

Appendix

Appendix 1: List of interview partners

Interview partner 1 - Head of Central Production Control 13 April 2021

Interview partner 2 - Head of Decentralized Production Control 13 April 2021

Interview partner 3 - Head of Acquisition 14 April 2021

Interview partner 4 - Head of Planning 15 April 2021

Interview partner 5 - Head of Purchasing 15 April 2021

Interview partner 6 - Head of Controlling 16 April 2021

Interview partner 7 - Head of Production 28 April 2021

Interview partner 8 - Head of Quality Assurance & Acceptance 30 April 2021

IX

Appendix 2: Interview guideline

1. I am writing my master’s thesis on the topic of drivers and barriers in the KPI-definition

of infrastructure project companies, and I would now like to discuss the production pro-

cess of company XX with you, i.e. from the moment of searching to the moment of hand-

over to the customer. Which sections of the production process represent real showstop-

pers?

2. How far in advance is the specific order known? How many sites, which cluster and

where?

3. Can the customer spontaneously place an order that was not previously expected?

4. Are more sites processed on a percentage basis, so that the desired number comes out in

the end?

5. And how would you view the interfaces? Well, there is not only the company, but also

external partners in between. How do you view the overall process in regard of complex-

ity?

6. What does the process section XY look like then? Does it run through relatively quickly?

Or would you say it takes time?

7. Is there an option to shorten the process section XY?

8. Do certain process steps also require a certain preparation time?

9. If, for example, XY is not yet available, is the process then stopped? Or can it continue

anyway?

10. Can certain processes run in parallel so that the lead time is shortened? Where is this pos-

sible? Where is it rather difficult?

11. And in the case of sites that differ significantly from the set threshold values in terms of

cost, who makes the decision and according to what criteria?

12. And let me say that we are now in the situation where a new general contractor is to be

sourced. What are the criteria for the general contractor to be listed at the end?

13. Where else are you involved in the process? So, where do colleagues contact you?

14. And what happens if a general contractor exceeds a deadline? Will there be any penalties

imposed?

15. Are the resources on the market sufficient?

16. How is it ensured that sufficient resources are available? What is the strategy then?

17. Are there also differences regarding the regions in terms of general contractor availabil-

ity?

18. And do you currently already have general contractor resources abroad?

19. How many people are involved in the construction inspection?

20. What do you report, in what intervals, and to whom?

21. And what is the time schedule like then? So, is it every two weeks that you present fig-

ures?

22. What does the information chain look like, so to say? How does the information from the

quarterly meeting go into the organization after the management has looked at it?

23. How do you spread information into production departments? So where are your inter-

faces? Do you have meetings with different managers or how do you pass on infor-

mation?

24. Is the production process visible to all employees?

25. How do suggestions for improvement get implemented? Who is then usually contacted?

26. How reliable do you consider the data in the IT system?

X

27. How do documents of external partners get into the system? Are there automatic inter-

faces?

28. Does the system give enough possibilities to keep track of the respective status of the

sites?

29. What exactly will be the improvements of the new IT system?

30. Where do you perceive the current weaknesses in the IT system?

31. Do you also exchange information nationwide when someone has, let's say, a good idea

to simplify the process?

32. How is the cooperation with external partners organized?

33. Do you have the impression that external partners are open for optimization needs?

34. What about the employees' own initiative?

35. How honest are people with each other when it is already visible that certain figures can-

not be achieved?

36. Does the management support the honesty of employees?

37. How does management support when a general contractor does not perform adequately?

38. Are proactive demands for improvement also made by management?

39. And if you report critical aspects to the management, will they also decide or support in

deriving concrete measures?

40. Who is responsible for the process steps XY? Is there a clear distribution of responsibili-

ties?

41. What is the competence of the general contractors about? Is it the same everywhere or are

there differences?

42. What happens when a general contractor has weaknesses? What is the approach?

43. What training does the company offer?

44. Would it be possible to draw a certain percentage of construction plans yourself? Or is

that a bad idea?

45. What percentage of deficiencies are found at sites that need to be reworked?

46. If I have understood correctly, it doesn't happen overnight that a general contractor

builds. How does such a process work, how do you proceed?

47. When data is analyzed, are concrete measures derived for each process step?

48. Is sufficient risk management in place?

49. What is your opinion on the use of data analytics?

50. And if you notice weaknesses of the external partners, do you also hold discussions to in-

itiate improvements? If so, is this also followed up?

51. Do you think that the available data will be used for the coming years to derive

measures?

52. How do you perceive the leadership approach nationwide?

* The questions are based on the criteria of a leading KPI system, on the factors of the studies and along the pro-

duction process of the company. Relevant questions were selected from the following catalogue for the respec-

tive interview partner, based on his or her role in the company.

XI

Appendix 3: Overview of recommendations for action as table

XII

XIII

XIV

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