The New Project Leader

Heidrick & Struggles reveals the increasing demands being made on the future generation of Project Directors within the fast-evolving natural resources sector

by Luigi Slaviero, Partner, Industrial Practice

and Hugues Mercier, Associate Principal, Leadership Consulting Practice

The new project leader

Professionals within the natural resources

industry are faced with ever more complex

and daunting projects within the context

of a highly competitive and political

marketplace. And in an age when mitigating

risk is more important than ever, the role of

the Project Director in particular is becoming

increasingly demanding.

The new generation of Project Directors are expected

to know as much – if not more – about the world of

stakeholder management, corporate communications,

governance and leadership as it does about engineering.

Management skills and accountability are growing in

importance. And the scarcity of Project Directors willing

and able to take on these new demands is compounding

the human resources challenge for the industry.

The risk managed by a single Project Director can

represent up to one-third of a company’s entire portfolio

risk and can therefore have a huge impact on the

organisation’s financial health as well as its corporate

image. The savvier corporations have recognised this

and acknowledge the need for professionals with

strong leadership skills as well as technical know-how.

Projects have become so complex that no one person

can master all the technical challenges. Teamwork and

communication are crucial.

Following in-depth interviews with leaders in the natural

resources industry, Heidrick & Struggles has identified the

benchmarks and best practices that are being developed

to enhance project management capabilities and, in turn,

sustain the pipeline of the future generation of Project

Directors.

Survey findings

Talent challengesThe physical and political challenges of leveraging natural

resource reserves in hostile and remote regions are

significant. Moreover, industry insiders are concerned that

difficulties in finding talent equipped with the necessary

capabilities are constraining successful and timely project

delivery. The risks of failing to address talent management

include financial loss, brand damage and team burnout,

so it may come as no surprise to learn that many

organisations are now paying closer attention to their

governance and hiring policies.

These firms are looking at the way they drive projects, and

how they address their project leadership capabilities.

They are reassessing the competencies needed by their

project management function. And they have identified

the need for strong leadership and commercial skills.

The governance environment has evolved too, along with

the increased complexity and multi-billion dollar capital

expenditure level of projects. Collaborating with new

partners such as global supply-side alliances and larger

consortia for complex projects with high political visibility

has increased the governance burden. And as the stakes

and expenditure increase, so do the risks.

Dealing with such challenges requires robust risk

management, contract management, accountability and

front-end commercial astuteness, as well as insightful

forecasting ability. And with many Project Directors now

responsible for managing stakeholders’ expectations

– including those of politicians, suppliers, clients and

external partners – the ability to carry out a plethora of

challenging and time-consuming responsibilities can

represent the key to success.

Forces of change in project management

2 The new project leader

Locating talent from other sectors, such as IT,

infrastructure or transport, is slowly becoming more

commonplace. Anecdotal evidence shows that there

have been several successful cases of senior Project

Directors moving from one sector to another, such as from

aerospace technology to gas or oil. After a few months

(or even weeks) of learning the jargon they are frequently

operating on par with their peers.

One executive agreed, “The Project Director profession has

been elevated to a leadership role, with communications

expertise a necessity, plus the ability to manage a project

via management information dashboards. Precisely

because of these additional skills, it is possible to attract

Project Directors from other sectors.”

Managerial and leadership behavioursProject Directors are no longer simply accountable for

delivery. They are acting as ‘mini-CEOs’ covering a large

spectrum of activities. Intellectual and technical skills are

of course necessary but behavioural and communicative

dimensions – or leadership intelligence – are now crucial

for success.

According to one VP global projects, “We as a firm believe

that the winning Project Director has the talent of the

general manager, or a mini-CEO – who creates a ‘company’

(the multi-billion dollar project), manages its lifecycle and

also manages its ‘closure’ (i.e. commissioning for hand-over

to operations).”

Another executive concurred, “We realised quite rapidly

that three-quarters of the skill and competency sets that

are required for successful project leadership are the

same as for the company’s general, firm-wide leadership

programme through which it develops its business and

general managers.”

This change in skill set is starting to be recognised by

organisations and is evidenced in recent hires. A large

international oil company has recently started recruiting

future Project Directors from the Navy, for example.

“Engineering and technical skills are nice-to-have but

leadership skills are a must-have. This trend has emerged

in the last decade and we try to bear it in mind when

appointing new Project Directors,” confirmed its VP

Human Resources.

Generation gapThere is another area of concern, too – the acute

generational gap in the natural resources industry. Several

of Heidrick & Struggles’ interviewees, all executives in

leading natural resources corporations, admitted that the

problem is “grossly underestimated”. Many engineering

graduates are no longer heading to exotic destinations

to work on mega-projects, but are instead turning to an

urban career in finance or consulting, and the more family-

friendly work-life balance that comes with it.

Respondents also noted a decrease in commitment to jobs

and organisations, a contrast to the historically committed

‘company people’. One VP global project services said,

“We are aware of the concerning phenomenon of younger

talent looking for immediate outcomes, or instant

gratification. There does not seem to be a high patience

or willingness to work through the learning curves.” This

trend evolved in Generation X, and seems to be even more

acute in Generation Y.

The widening gap between aging engineers and Project

Directors and the scarcity of new talent is compounded

by risk-averse companies’ reluctance to give a younger,

un-proven, project manager a high responsibility role.

Likewise, project management roles are often seen by

potential recruits as ‘too risky’.

Transferable skillsThere is also an historical tendency for the natural

resources industry to look for talent within its own sector

or, worse still, within the same natural resource, such

as gas. This practice frequently ignores the widening

role of the Project Director – that of a true management

professional first and foremost, over and above his or her

capabilities as a specialised engineer.

According to one executive, “The companies that say

‘talent must come from our sector’ are living in the past,

because what they are really saying is ‘a Project Director

is a super technician, a super engineer, a super process

wizard.’ The more advanced and informed view is ‘a Project

Director equals a project management professional and a

leader of people.’”

Heidrick & Struggles 3

Effective teamworkIn addition, Project Directors are increasingly finding

themselves in the position of “talent officer”, acting as

human resources managers as they take on accountability

for managing and developing their project team. Projects

have become so complex that no one person can master

all the challenges. The required expertise is so vast that

specialisation at the top of the organisation can in fact be

damaging to the project, with the risk of time and money

being spent unwisely on the smallest engineering details,

rather than the bigger business picture.

Teamwork and the presence of varied expertise have

become crucial. Teams need to be multi-disciplinary

and multi-cultural. To manage such a diverse team, an

efficient Project Director must have an entrepreneurial or

commercial (“P&L”) attitude and excel at developing and

communicating with people.

This new focus on the need for emotional intelligence and

astute communication skills in Project Directors cannot

be underestimated, especially in the face of increasingly

demanding projects and with billions of dollars at stake.

One of the executives interviewed commented, “There

is a risk of underestimating the psychological profile of

a Project Director. Not all engineers or technical profiles

have the right psychological decision making profile –

far from it.”

For another executive, recognising “good work on a dirty

job” is a vital part of appraising Project Directors. He

explained, “Acknowledge people who are stepping up

to the plate on a train-wreck project where no one else

would or could: it is a sign of leadership and courage.”

The role of Project Director has become so important that

one global transport and infrastructure company is now

telling its young talent that “for an advanced, executive

level career in our company, project manager or Project

Director experience is a must-have on your CV.”

It will no longer be surprising to see a mega-Project

Director holding a vice-president or even a senior vice-

president rank, reporting directly to the CEO of the firm,

especially if they are involved in projects of high-value to

the overall organisation.

A word of warningProject Directors, however, are not always the saints of

mega-projects. With the scarcity of Project Director talent

and the increase in responsibility has come an increase in

power, something that some Project Directors are wielding

to the detriment of the wider company.

Business efficiency suffers – and company risk increases

– when Project Directors have a low acceptance of

firm-wide methods, for example, or yield too easily to

figure 1

The skills and expertise of the new Project Director

A typical Project Director in natural

resources has an Engineering degree, often

complemented by a business education.

They have occupied various roles in project

engineering, project construction and

corporate project/function, and have

been exposed to project complexities.

A successful Project Director will have

had experience in leadership and people

development, finance and technology.


client demands. As one global HR director explained,

“Today, the Project Director is king. They have a high

degree of freedom and discretion. With the liberty and

empowerment they enjoy, some Project Directors have

conceded business too much or too easily to clients.”

Developing Project Directors

Best practicesThe methods adopted by the most forward-thinking

organisations to nurture and develop Project Directors

are evolving to meet the increasing demands of the role.

These companies are using three main strategies, which,

when combined, can significantly impact individual

development. Heidrick & Struggles’ research indicates that

individual development is driven by:

• on-the-job training

• internal mentoring/external coaching

• formal academic training (which can also

be delivered internally)

1 On-the-job trainingSuccessful companies have developed initiatives to

encourage efficient on-the-job training opportunities,

including internal reorganisation, streamlining reporting

processes and methods for early detection of potential

talent.

Internal organisation

Organisational models have evolved to help support

projects and develop talent. Large projects are being

divided into packages and smaller semi-autonomous

tasks, for example, which not only increases individuals’

responsibilities but also helps manage the risk associated

with the project. Being given the opportunity to lead

these tasks helps to develop talent, and represents an

opportunity for future Project Directors to experience

the company’s standard processes and protocol. Project

control or executive assistant positions are also a way

to increase exposure to political, project and control

complexity. Moving between functions and projects

allows junior staff to cross-fertilise experience and

expertise while mitigating company risk.

Reporting line

Large projects may have multiple partners, which can

create complex relationships between project teams

(which can be composed of different companies’ staff)

and parent companies. Streamlining reporting routes

shortens the decision-making process while ensuring

efficiency. Given that natural resources Project Directors

bear a significant part of the company’s financial risk,

many organisations have adapted their reporting line to

aid communication with top management.

Early detection of potential

A major tool in improving staffing decisions is a ‘people

review’, in which a leadership team reviews a group

of people and collectively builds a consensus on each

individual. This enables the organisation to identify

potential next steps for career development while

ensuring any potential risks are acknowledged. These

collective decisions emphasise the fact that no manager

owns his or her resource pool. Not only does early

detection of talent shape careers, it also helps to ensure

that staffing decisions take into account individual

development needs as well as project requirements.

2 Internal mentoring or external coaching Successful companies are using mentoring to enhance

and to improve the transfer of knowledge and experience

between seasoned Project Directors and more junior

project managers. The mentor relationship reinforces the

feeling of community within the ‘project population’ and

is a way to impart non-written information or unofficial

protocol. Mentoring can be complemented with external

coaching to accelerate career trajectory.


3 Formal Academic trainingIn order to ensure Project Directors are effective and best

practice is shared, some companies are sending their

high performers to top academies to provide them with

training in finance, HR, legal, PR and negotiation skills. This

training is often completed by in-house workshops. This

is an effective way for companies to create a community

of seasoned managers. It also supports the sharing and

use of company standards, tools and processes, ensuring

structured project delivery, and making talent more

portable within the organisation.

The need to develop leadership and behavioural

competencies has led forward-thinking companies to

invest in leadership development training too. In order

to measure the impact of this training, companies

have developed competency models tailored to their

population of Project Directors. These frameworks are

similar in terms of emphasis and scoring to those used

by executive search firms when assessing executive level

candidates.

Training can be used at different stages of the Project

Director’s career. In the early stages, the emphasis will be

on technical skills such as finance, HR and law. Later the

focus is on leadership.

The impact of such strategies is two-fold. Individuals are

developed faster and more effectively, while staffing risks

are mitigated by balancing inexperience with control

and by supporting people with processes and expertise.

The head of a project academy for an international oil

company said, “We have been pleasantly surprised by

the power of combining development training and

community building. Project Directors regularly go to the

academy to learn, close a specific competence gap or to

teach. This reciprocity has proven highly motivational for

all involved.”

Is your company growing the new breed of Project Directors?Analysis of Heidrick & Struggles’ survey findings identified

three critical questions that organisations need to consider

in order to optimise project management and to control

related risks:

• What project governance is in place?

• How do we nurture talent within the project

management function?

• How do we promote the leadership competencies that

are necessary for successful Project Directors?

All this requires support from senior management as well

as a robust training and development programme. Those

responsible for nurturing the talent pipeline – which

should include the Executive Committee as well as HR –

need to have a clear understanding of the necessary skills

and competencies in this ever-changing profession. They

need to know that there is now a need for an emphasis

on ‘soft’ metrics as well as technical expertise. Successful

project management is not just about delivering projects

on time and within budget. It must also involve a focus

on the team, effective people management, a persuasive

leadership style and true client and partner satisfaction.

A talented Project Director will display managerial flair

by building internal and external relations, fostering

open participation and non-hierarchical communication,

proactively leading teamwork across a variety of situations

and thinking ahead while also learning from past

experiences. Tomorrow’s success depends on growing

this talent and on helping this new breed of Project

Directors to deliver ever more complex, multi-billion

dollar projects.

MethodologyHeidrick & Struggles conducted a survey on project management in the natural resources industry in 2009. This involved

38 in-depth and confidential interviews with Project Directors and other senior executives. Almost 40% of Project

Directors interviewed had a distinct non-technical experience within their career – such as a managerial, financial or

commercial position. The scale of project management represented in the survey exceeded US$63 billion.


Industrial PracticeOur Industrial Practice team, which consists of the

Natural Resources Practice and other specialty practices,

combines unparalleled search resources with a deeply

consultative approach. Working closely with the client,

we develop the ideal candidate profile against the

organisation’s unique competitive challenges, business

objectives, and leadership culture. By considering far more

than candidates’ functional or industry backgrounds,

we enlarge the talent pool to help find the talent most

qualified to meet those business objectives and address

the client’s real hiring needs. Perhaps most importantly,

this approach helps avoid the disastrous mismatches

between candidate’s capabilities and role requirements

that have plagued many industrial companies during this

time of dramatic change and increasing complexity.

Our dedicated group of over 125 consultants has deep

experience in each industry sector. We serve every region

around the globe, including China, Russia, the Middle East,

Eastern Europe and other emerging markets. The more

than 1200 assignments we conduct for clients each year

include executive search, leadership development and

consulting projects. This work has earned us outstanding

customer satisfaction ratings and created long-standing

relationships marked by the trust we develop and the

results we deliver in every engagement.

Luigi Slaviero is a Partner at Heidrick & Struggles,

and co-leader of the global Natural Resources Practice.

[email protected]

Leadership Consulting PracticeHeidrick & Struggles partners with the world’s most

prestigious companies to build and develop winning

leadership teams. Our experience has taught us that

managing leadership talent is as important as acquiring it.

To help clients transform how they manage their leaders

– and ensure the sustainable business success their

stakeholders demand – we have assembled a global team

of deeply skilled consultants well-versed in leadership,

senior team dynamics and strategic human capital

management.

Our services are designed directly with clients to

address Leadership Risk at the individual level (Strategic

Leadership Assessment, On Boarding), team level (Top

Team Effectiveness and Alignment) and organisational

level (Board Performance, M&A due diligence and Talent

strategy). Our Leadership Consultants offer clients

tailor made leadership solutions that drive required

organisational change, enhance leadership teams, develop

top talent and improve business performance.

Hugues Mercier is an Associate Principal in the Paris office

of Heidrick & Struggles, and is a member of the global

Leadership Consulting Practice.

[email protected]


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Heidrick & Struggles is the leadership advisory firm

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The New Project Leader

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