TETRA TECH EC AND RISK MANAGEMENT

As Don Rogers, chief operating officer of the remediation firm Tetra Tech EC (Tt EC), left the meeting of
project managers, he reflected on the risk management process he had championed over the last 10 years.
Had he gone too far, or not far enough to enhance the companys strategy? He wondered whether the process
was too rigid since it limited innovation, or whether the risk management discipline required by the process
was the reason for the strides in safety and efficiency that had proven profitable to the firm.
COMPANY BACKGROUND
The Electric Bond and Share Company (EBASCO) was founded by Thomas Edison in the early 20th century.
Since 1978, it had been owned by ENSERCH Corp. (ENSERCH), an expanding energy company, which had
grown out of a local distribution gas pipeline company, or LDC, in Dallas, Texas. In 1992, EBASCO found itself
facing increased exposure risks on several Superfund remediation projects, which involved cleaning up
environmental pollution, including toxic, hazardous or nuclear waste. Prior to 1992, the Superfund projects had
been protected from third-party risk for exposure to such hazards through indemnification by the
Environmental Protection Agency (EPA). However, the EPA was in the process of removing its indemnification
for remediation projects. This change would expose companies, including EBASCO, to increased risk in this
work.
Several large engineering companies, such as EBASCO, had moved into remediation work because both the
federal government and many U.S. states were concerned about cleaning up the environment and had
invested resources, either through fiscal policy (i.e. taxes) or by regulating commercial enterprises to ensure
that they reduced their negative impact on the environment. These actions created a context in which the
remediation market grew rapidly, with fairly low barriers to entry. Large companies with engineering and
construction competence, such as EBASCO and Bechtel, were very interested in entering this market since it
was seen to be potentially very lucrative. Yet, the problem with remediation was that it dealt largely with
subsurface contamination: you dont really know what youve got until you start digging. Such unexpected
conditions created economic risk since cleaning up an area could be more costly than anticipated and
contracted for, exposing a company to potentially heavy losses on a project. In 1992, this was the case for
EBASCO, when there were two large remediation projects that were either losing money or about to lose
money:
In the Bridgeport Remedial Oil Services (BROS) Superfund project in southern New Jersey, the contractor
was indemnified for claims of injury or loss to third parties related to environmental pollution. This
project involved cleaning up a 500-acre (202-hectare) waste-oil pit site where the owner (a farmer)
had accepted, knowingly or otherwise, all kinds of hazardous waste onto his property, which now
needed to be remediated.
The environmental group at EBASCO had taken on the Times Beach project, a $110-million commercial
remediation project, but senior management was very concerned about the potential risk. Times
Beach was founded on a flood plain along the Meramec River in 1925, during a promotion in which
the now defunct St. Louis Star-Times newspaper gave away properties along the river as part of its
subscription drive. A purchase of a 20!100 foot (6!30 meter) lot for $67.50 included a six-month
newspaper subscription. In 1971, plagued with a dust problem, due to its 23 miles (37 kilometers) of
dirt roads and lack of pavement funds, the city of Times Beach hired a waste hauler to oil the roads in
the town. From 1972 to 1976, this hauler sprayed waste oil on the roads at a cost of six cents per
gallon used. The roads were then paved. Polychlorinated biphenyls (PCBs) were subsequently found
in the Times Beach soil, and EBASCO was hired to remediate.
EBASCO was facing the possibility of losing tens of millions of dollars on the BROS Superfund project; the
Times Beach project was in its infancy, but was assessed by senior management as having a high potential to
lose money. EBASCO realized that it needed to develop a process that would protect its assets in such an
uncertain and risky business. EBASCO hired Don Rogers, the former head of EBASCO Development Co., to
develop a remediation group and manage these projects. His approach, which evolved gradually, involved
management of, rather than avoidance of, risk: take on risk if you can identify it correctly, ensure the proper
operational controls are in place, hire competent people to execute the controls and implement a verification
process to ensure that the plan you defined is being executed faithfully.
At the time, EBASCO had an environmental remediation consulting division within EBASCO Services, Inc. and
a construction company, which operated as two independent profit centers. Since it took both entities working
together to complete the remediation work, Rogers requested that he be made an officer of both companies
senior vice-president of Remediation and Construction. The company also instituted a regulatory compliance
program. A regulatory manager1 was assigned to develop this program. At the same time, personnel changes
were made in the safety program.
During this period, EBASCO was sold to Raytheon. However, since Raytheon did not want to take on the risk
associated with such environmental projects, ENSERCH retained the two groups under Rogers and formed
ENSERCH Environmental Corp., with the rest of EBASCO being sold to Raytheon. ENSERCH Environmental
Corp. lasted about 18 months and, in the end, thanks to the success of the compliance, safety and risk
management programs, was doing about $140 million worth of business annually. Despite this success,
ENSERCH decided to focus on gas exploration and distribution, and sold ENSERCH Environmental Corp. to
Foster Wheeler in October 1994. Foster Wheeler had a small environmental group (with revenues of
approximately $60 million per year), which eventually merged processes with ENSERCH Environmental Corp.
and became Foster Wheeler Environmental Corp. At that point, Rogers became executive vice-president and
chief operating officer (COO) of Foster Wheeler Environmental Corp.
Foster Wheeler Environmental Corp. emerged as a successful company. The management and staff of Foster
Wheeler Environmental Corp. attributed a significant part of its success to the risk management and
compliance programs. At one point, the head of human resources (HR) at Foster Wheeler approached Don
Rogers regarding his training programs, but was overwhelmed by their comprehensiveness. The program
appeared to be too big of a deal, and Foster Wheeler decided not to adopt it company-wide. In March 2003,
Foster Wheeler sold the assets of Foster Wheeler Environmental Corp. to Tetra Tech (Tt) for $80 million. Tetra
Tech renamed the company Tetra Tech EC (Tt EC), one of approximately 20 different companies owned by
Tetra Tech. (See Exhibit 1 for the chronology of these events.)
THE EVOLUTION OF THE RISK MANAGEMENT AND COMPLIANCE PROCESS
The elemental steps of the risk management and compliance process that Rogers proposed to ENSERCH in
1993/94 was referred to as the Task Initiation Procedure or TIP. At its core, the TIP was as simple as
understanding the project, identifying the risks and defining the risk management plan for each risk. Since its
earliest inception in 1993, the process included a focus on risks associated with five broad areas and the
management of the identified risks to be included in 11 planning elements. The five broad areas were
1. site conditions,
2. technical performance and how the process of performance and the outcome affect the site,
3. stakeholder issues,
4. regulatory issues, and
5. contract issues.
The 11 planning elements were
1. the work plan,
2. the quality assurance/quality control plan,
3. the staffing plan,
4. the cost/schedule control plan,
5. the communication plan,
6. the health and safety plan,
7. the status and monitoring plan,
8. the risk management plan,
9. the documentation plan,
10. the cash management plan, and
11. the regulatory compliance plan.
The approach required the project manager to consider these issues, which focused on identifying the risks
associated with the project being planned.
Once the risk management plan was prepared and approved, the appropriate operational controls for each
identified risk were included, as appropriate, in one or more of the 11 planning elements listed above. The plan
was reviewed by specialists and experts, and approval was needed before the project would be allowed to
move forward. The final stage was to execute the project exactly as it was planned, with any need to deviate
from the plan leading back in an iterative way to re-planning the project. The mantra in the company was We
like to say we plan our work and work our plan. After projects were up and running, they were regularly
reviewed to ensure that the plans were actually being followed.
The purpose of the Task Initiation Procedure (TIP) was to identify potential risks on a project and develop
quality objectives and measures, and operational controls and/or mitigations for these risks in a risk
management plan. Through this process, environmental aspects that required conformance with the
Environmental Management System (EMS) were identified, as were design characteristics that required a
technical sponsor to ensure that experts approved work that could be technically complicated. Resource
specialists, discipline leads, task previewers and TIP approvers were all involved in the process.
The TIP review process began long before a bid was actually placed on a potential contract (see Exhibit 2).
Clients typically provided information on a contract approximately six months or more in advance of the
request for proposal (RFP) release. At this time, Tt EC would begin the TIP process. Based on the clients
scope, Tt EC evaluated the risks and communicated this assessment to the client. This information helped the
client to be more precise about expectations when it actually issued the RFP. This early negotiation also
enabled Tt EC to sell its approach to the client, in hopes of ensuring the client would be more appreciative of
Tt ECs approach and view of the project risks.
Tt ECs approach meant that business from new clients that were not familiar with this process was often
difficult to secure; although Tt EC was competitive, it was not typically the low-cost bidder. However, Tt EC had
more than 90 per cent repeat business because the companies that worked with Tt EC found that Tt EC was
able to deliver on its projects consistently, whereas other companies were not able to deliver as consistently,
possibly because they had failed to identify the risks upfront. On most if not all the projects that Tt EC had lost
for not being the low-cost bidder, the issues of concern that Tt EC had identified in the TIP process became
real problems for the winning company. For example, on one particular project, Tt EC proposed to excavate
and then de-water material before the water was taken off in trucks and disposed of. The competitors bid was
much cheaper because it had proposed pumping the material that Tt EC claimed was not pumpable. The
lower priced contractor won the bid. However, the competitor subsequently found that the material could
indeed not be pumped, as Tt EC had predicted. The lower priced contractor could not accomplish the work as
intended and, as a result, got in deep trouble on the project. The client turned to Tt EC to complete the project.
This example illustrates how the Tt EC approach to risk management created a higher barrier for Tt EC in
winning bids, but nevertheless led to a situation where contracting companies learned to trust Tt EC precisely
because of its risk management approach.
Given the comprehensiveness of this risk management approach, there was a steep learning curve for new Tt
EC employees, even those who were very experienced in remediation work. However, once employees
understood the TIP and the associated risk management approach, they were able to work on any project
because Tt EC does everything the same way.
TT ECS APPROACH TO RISK MANAGEMENT
Tt EC adopted an approach to risk management that was different from most companies. For most companies,
a risk appetite decision occurred even before a risk assessment, when the company identified the level and
kind of risk it was prepared to take and then assessed whether or not an RFP met its criteria. If the risks were
higher than its appetite, the company would not bid for a contract. However, at Tt EC, the mantra was that
there is absolutely no risk we cant deal with, even though the company had a very limited risk appetite. Tt
EC was therefore able to take on any risk because the TIP process ensured that a high-risk activity would be
converted to a low-risk activity through the planning process and by implementing operational controls that
would cope with any problems that might emerge.
There were two aspects to the risk management approach adopted by Tt EC. First, it assessed up-front and
tried to both anticipate the risks and identify solutions that would overcome or mitigate those risks. Second, its
bid included a very tight specification of the activities it proposed and included a statement to the effect of
We dont know what is going to happen once we start digging, and our bid is based on the assumptions we
have defined in detail in our offer. If these assumptions hold then we will go with this price. But if they dont
hold then the scope is different than we have bid, and we will start renegotiating.
In other words, Tt EC mitigated risk by being precise in its bid about what it would do to complete the work at a
site, and stated that if it found conditions that were not anticipated and were therefore unable to complete what
it had stated in the bid, then the additional work would be the basis for renegotiating the contract.
Thus, a fundamental aspect of the TIP and risk management approach was that projects were stopped when
the plan could not be followed. The initial TIP stages meant that a comprehensive plan was necessarily
developed. However, every time something unexpected occurred, that aspect of the project was required to be
stopped in order to involve the necessary expertise involved. The project then needed to be re-planned before
starting again. Employees were told that, In the end, it will cost the client and the firm more to continue than if
you didnt stop and restart.
Stopping and restarting a project could put project managers behind schedule. Thus, many were tempted to
sweep problems under the carpet. To avoid this temptation, Tetra Tech EC followed a comprehensive
approach that began with the hiring process. In orientation training, new hires were taught that slower was
faster: if you dont stop and re-plan, eventually you will have a problem that you did not plan for, and the
project will take infinitely longer. Also, the teachers/trainers were project managers who could point to their
personal experiences. Finally, people were held accountable for the decisions that they made and the
processes that they used to make them. Employees were told: You would be in more trouble with us if you
didnt stop and plan and made the target than if you did stop and plan and didnt make the target. This
philosophy was illustrated in a story that became a legend in the company, when there was a need to enter a
confined space that was not on the original plan. As told by Don Rogers:
Early in the game, we had a Navy project in the northwest. It included a confined space entry. If you have to go
into any confined space, a tunnel, a vessel, a ditch, you go through a protocol, including testing the air and
following a sign-off process. We had someone who entered a confined space as a shortcut activity, without
going through the protocol. The person felt comfortable in the confined space, that it was not going to be
hazardous, expected to get in and out quickly, and in fact, accomplished it. He got in and out quickly without a
problem. We found out about it maybe four or five weeks after the event. The supervisor was not on site at the
time, but got wind of it and raised the flag. It turned out that there was a safety person on the site, who allowed
this individual to do that, and the safety person had called the local office safety supervisor and told them they
were going to let him do it and the safety person supervisor there said okay. We fired the person who entered
the space; the safety person, who was on site and said it was okay was reprimanded but not fired since he had
sought management input; and the home office person, who said it was okay was also fired. We didnt fire the
person who raised the flag.
Tt EC had three different oversight processes to ensure that projects were working as planned. First, peer
reviews occurred during the execution of the work for each stage that resulted in a deliverable or completed
sub-project. The peer reviews referred back to the risk management plan to see the risks that were identified
and the operational controls that were supposed to be executed. The reviewers then determined whether
these controls were being executed. Every project was peer-reviewed by project managers and discipline
leads. Every discipline had peer-review rules. The disciplines wrote their own quality peer-review
requirements, which were consistent with regulatory requirements (e.g. 14001 certified). If there were a
variation between the planned operational controls and the action that was actually taken, it was considered
perfectly acceptable, as long as the changes were documented, explained and peer-reviewed before being
implemented.
Tier two was project reviews. Every quarter, each project was reviewed by senior management. Which
projects were reviewed by executives and which were reviewed at the office level were determined by the
office manager. Projects in excess of $2 million, or high-risk projects, were reviewed by executives. Office
managers were also required to provide to the executives a sample of projects that were indicative of the work
in their office and for which the office manager would like executive input. There was a project review protocol
a standard package prepared for the project review. In general, people looked forward to these reviews. Tt
EC did everything to make them a positive experience and bad news was treated sensitively. The companys
philosophy was: The primary responsibility of executives is to make sure that the person who gives you that
bad news leaves glad they brought you the problem.
Further, project managers found that a quarterly review was not just an opportunity for the executives to look
at the projects and be comfortable that risks were being addressed and customers were being satisfied; it was
also an opportunity for the project to reach up to the company level and say, I cant execute this part of my
project efficiently because . . . or the IT system needs to be fixed or the procedure doesnt exist to do this
or we havent been able to hire this staff. Again the value of the project reviews was illustrated in a story
about a previous project as described by Rick Gleason, vice-president and a senior program manager in the
Boston office:
We had a situation three or four years ago on our New England project; we were just gearing up into a very
major part of work down at New Bedford Harbor, and we needed to hire staff, and we needed some more
emphasis on . . . I think we wanted to implement some slightly different cost and schedule systems, and we
actually scheduled a project review and brought some extra people in and had the right discourse at the
project review; got approval from the right areas and support from the right areas to make some hiring, get
some IT [information technology] support, change some systems . . . and thats really when the project review
works best. You get both the peer review, kind of that additional layer of protection, but you also have the
project reaching up to the corporate systems and saying, Heres what we need to do our job better.
The third level of review was the audits, which covered both quality and compliance. Projects needed to be
shown to be compliant with both the Federal Acquisition Regulations (FAR) and with internal Tt EC systems
and processes. The two audit groups coordinated schedules so that they each reviewed a project once per
year, on a semi-random basis.
The performance of projects bore testimony to the effectiveness of this rigorous TIP and risk management
approach approximately 98 per cent of the companys work in the last 10 years was completed either on or
ahead of schedule. The key to this track record was that the schedule changed when the company
encountered a situation that it had not contracted with the client. Clients accepted this approach because
everyone in the remediation business was aware that no one really knows what is underground.
IMPLEMENTING THE TIP APPROACH
Don Rogers believed that the critical issue in remediation was managing engineers, construction workers and
scientists who tended to be anxious to get on with it, and therefore did not spend enough time in the planning
stages. The TIP was introduced to change this mindset. However, the comprehensiveness of the TIP, made it
initially difficult to implement, as recalled by a program manager in Boston:
When we first started these (TIPs) . . . about 1993 . . . those reviews were unpleasant events because you had
project people thinking that they had all the answers and how dare these people who are both outside the
project and not even necessarily really technical people, who are asking questions that are almost more from a
laymans perspective? and this is a waste of my time, and Im doing it just because theyre making me.
However, it soon became clear that even nave questions could promote a discussion that could help identify a
risk. The process had evolved so that the project managers generally thought through all the risks while
working through the TIP. As a result, after the project managers submitted their TIPs for review, reviewers did
not identify many risks that had not been anticipated by the project managers. The TIP on complex projects
was reviewed by a group of reviewers.
Moreover, not only were project managers providing more thorough TIP documents but the reviewers were
also more experienced so that they were less likely to ask off-the-wall, laymans questions. Instead,
questions from reviewers were phrased more sympathetically: I realize you may have covered this, but can
you explain it to me? Reviews had, thus, evolved over 12 years from initially being viewed as nasty,
contentious, unpleasant, no-value-added procedures to a valuable part of the process that all involved
understood and accepted. It was the iterative and the give and take of discussions that appeared to help, as
explained by Jim Leonard, general counsel for Tt EC:
We used to have a TIP reviewer, who prided herself on knowing nothing about these projects. And who asked
off the wall questions. [She would] say How are you going to do that? and if the project team didnt answer
pretty quickly then it was evident that they hadnt thought through how to do it. One example was a very simple
job. There was an old barge the Navy had docked at the end of a pier. There was old residual oil in it and the
Navy needed merely to get the oil out of the barge. The Navys proposed scope was, very simple, go get an
oil truck, pump it out, take it away and dispose of it. Our nave questioner asked How do you know the pier is
going to hold the truck after it is full of oil? The team could not answer the question and the reviewers made
the project manager go back and find out. And it turns out the pier wouldnt hold the truck. It was an old pier.
So what is the solution? Run a hose out; dont put the truck on the pier. If we had done what the Navy had
suggested, we could have lost the driver and truck with all that hazardous oil in it. It is one of the things that the
process does for you. It makes us the least-cost provider [even though our bid may be higher].
In order to ensure that each project was following the Tt EC brand of risk management, extensive training and
access to corporate procedures were required of all employees. The corporate office provided corporate
training at three levels: Project Management (PM) 100-, 200- and 300-level courses. The PM 100-level course
was previously a four-hour in-person module, but had evolved to an online format an initial quick
indoctrination into what projects were about. The PM 200-level course was a multiple-day course; two two-day
weekends that covered the Tt EC work process. It included a substantial compendium of training manuals
and lectures and hands-on exercises and quiz material. The PM 300-level course was actually beyond the
work process; it focused on advanced issues associated with covering baseline cost- and schedule-
management and how to deal with change and notification of change to the client.
EMERGENT ASPECTS OF THE TIP AND RISK MANAGEMENT APPROACH
The risk management approach suggested considerable importance was placed on compliance with
regulations, both internal and external. However, over the years, management at Tt EC had found that too
much regulation, whether imposed or self-imposed, could stifle innovation and interfere with the ability to
satisfy the client. Thus, several years ago, the set of online corporate procedures threatened to overwhelm the
company. Project managers felt that there were too many procedures, and since project managers were held
first and foremost responsible for compliance, there was just too much for anybody to digest and retain for
easy recall. As recalled by Rick Gleason:
For example, our task initiation procedure at the time, and still is for the largest projects, was about a 40-page
checklist . . . literally a checklist of technology questions, does your project include such-and-such? if yes,
have you done this? The idea being, as you work your way through that checklist youll come up with, is there
a risk associated with this issue, and if so, what am I going to do about it? It used to be for every project you
had to sort of work your way through about a 40-page document, and even though it was a checklist and it
might have only taken about an hour to go through it, for a small project, people felt like, this is not relevant;
not only do I have to fill out the checklist in an hour, but theres probably two or three other hours spent . . . I
have to send it off for a review, and then I have to incorporate comments, and then we have to get a legal
person and a technical person to come review and approve it, and by the time Im all done, my one hour
turned into a four- or five-hour effort, and my overall project is only a week long, or whatever. So now, there
are three or four slightly different permutations, down to the simplest one, which is a page or two of material
that you look through; you fill it out, and if youre a small fisheries consulting project in the Seattle office, the
person who reviews it is the office manager who has oversight of this project. It used to be everything had to
go up to a V.P.-level for review and approval. Now, that particular project is literally a page or two, and the
review is done locally by the office manager, and off you go.
Tt EC recognized the complexity of the process that it had developed and set up working parties to look at
simplifying it. This exercise led to procedures being categorized by discipline. Project managers then had a
specific set of about 10 to 12 procedures that guided them in terms of the must-know, must retain information,
as did the engineers, scientists and all other disciplines. Moreover, while the most complex projects involved
all of the planning elements; for simpler projects, the TIP process has been simplified so that a project
planner could be used as a simple checklist.
The culture had therefore been nurtured, which encouraged people on projects to identify where the
regulations were stifling the ability to conduct the necessary work You have an obligation to raise your
hand and say if I do it the way you are making me do it, it is not going to be optimal. Everything is about
continuous improvement. In other words, the approach recognized that regulations needed to be continuously
updated and responsive to changing circumstances. The TIP (and all the other procedures at Tt EC) therefore
included a button on the online form that allowed the person preparing the documentation to write an email to
the compliance department, which said I need this variance from this procedure. This statement was
reviewed and could lead either to the project being allowed to vary from the established procedure or to a
change in the procedure, where the procedure was considered to be problematic more generally, or to include
a better idea:
Its through that constant challenge that makes it relevant, that makes the system work. That is really the heart
of the issue. You have got to be willing to say, you know what, filling out this form doesnt make any sense.
You have got to be able to say the emperor has no clothes; otherwise, it doesnt work.
The biggest difference between the process in place in 2006 and the process followed initially in the early
1990s was in terms of ownership. Initially, the process belonged to the COO who was trying to get people to
follow the process. In 2006, the process belonged to the employees and they changed it all the time. For
example, during a recent project review out of the Philadelphia office, a detailed discussion ensued about the
forecasts and budget models on the website. Attendees admitted that many project managers (including some
of the discussants) did not use the model on the website for their forecasts, using self-created spreadsheets
instead because they found it difficult to import and export information on the website models. Since the
website was scheduled for a revision, the project managers wanted to get their remarks heard and decided as
a part of the review to hold a brown bag lunch the following month at the Philadelphia office on the use of the
website for project managers. The result was that a decision was made to change the website models.
LESSONS-LEARNED METHODOLOGY
Employee moral was high at Tt EC. Employees believed that compliance with the companys risk management
plan and regulatory mandates mattered to the companys success and was rewarded. Human nature was for
the incident person to cover up, but Tt EC required this person to report it. You cant succeed if the person
who identified a problem to you is sorry that he did. You dont know (and therefore cant rectify) what nobody
tells you. The importance of reporting incidents was stressed:
We had a terrible compliance violation that hurt the company very badly. It was a really important lesson for
me because one of my basic assumptions has always been where you have two people you have safety.
One person might break the rules, but with a buddy there, this is less likely. This was a team of five people.
The team was working on removing unexploded ordinance from a site. It was Thursday before a 4th of July
weekend, a long weekend and they were supposed to complete a removal of unexploded ordnance before the
weekend began. If you find an unexploded ordnance, there is a protocol you have to use to destroy it. You
build a protective facility. If its not clearly marked that there is no fuse on the unit, you have to treat it as if
there is a fuse and explosive in it. They found not one but many of these things that are not marked and
realized that they would not be able to complete the job. What they should have done, of course, is follow our
rule: stop, re-plan, tell the client we found some new ones and will have to do this again next week, even
though we are supposed to be finished this week. Instead, they moved this ordnance to a place 100 or so
yards away, which would be cleared in the future. What they did when they did that was they moved a piece of
material that is regulated by the range rule. They picked it up and moved it and it became potentially RCRA
[Resource Conservation and Recovery Act] waste. Where they put it down became potentially an unlicensed
RCRA landfill. The five of them conspired to do this. The least experienced person had more than 20 years as
a UXO [unexploded ordnance] specialist in the armed services. In the armed services what they did would
have been commonplace. They didnt know whether they would do the area they placed this stuff in next or
not, but they knew it was going to be done and they knew there were no explosives in the materials that were
moved. This is in a secure place, protected from the public area. The public cant get into this place. So as far
as they were concerned, they did not create a danger. However, they broke serious regulatory rules. Six or
eight weeks later, a disgruntled employee blew the whistle. The employee called the state department of
environmental management and brought the state people to that ordinance and showed them that the material
had been moved. We would have fired all five immediately, but they quit as soon as the event became known.
We lost some projects because of this incident because we had a black eye and it cost us about $1.5 million to
remedy the problem. What we had to do was go out and survey every piece of work we had done before
because the regulatory agency had to assume and not unreasonable of them that this team had done it
before. We investigated, of course to determine why this happened; to figure out the lesson learned. One of
the five people turned in the other four, so there were some personal dynamics involved in that process.
Candidly, we didnt learn a lot about it. It was probably as simple as it sounds. They wanted to get home to
their families. These guys were working 60-hour weeks. It was the last day before a long weekend. They just
wanted to get it done. They thought that they knew enough to be certain they were not causing a hazard. I
think if they had known what they were doing from a regulatory perspective, they probably wouldnt have done
it. They didnt know there was a whole set of other regulatory criteria that had to be met. One of the corrective
lessons we took is we now teach those regulatory requirements in the field. We used to just put them in the
work plan. Now we teach them to those who will execute the plan.
Given this background, the company introduced incentives to report incidents and near misses, ranging from
electronic, formal accolades to t-shirts to spot bonuses. Incident reports were based on a concept from loss
control in safety management. Perturbations that arose on the job were reported, and a root cause basis for
the perturbation was determined. The incident reports ranged from very simple zero incident performance
(ZIP) slips, which were provided online to extensive investigative tools. The ZIP slip was used when there was
something that was minor enough that it really didnt merit a major investigation, but Tt EC wanted to make
note of it (see Exhibit 3). The idea for the ZIP slip came out of a lesson learned from a Rocky Mountain
Project.
The person who was involved in the incident did the investigation under the supervision of the technical
supervisor. To ensure reporting and to ease the paper-work burden, the supervisor aided in filling out the
forms, evoking the lesson from the process and documentation. Management continually reminded employees
to look for near misses; report near misses. The rule of thumb was that an incident report should be made
every 3000 hours: if not, management assumed that it was not being advised of something. Incident reports
were required documentation in project review protocols.
These incident reports were then circulated to other people/projects that would benefit from the knowledge.
The supervisor, the quality person and the safety person would make a decision about who owned this
incident, from a technical perspective, called procedure owners. The discipline lead determined who could
benefit from this lesson and got that lesson to those people, either through e-mails or bulletins (called ZIP
bulletins). The system of checks and balances supervisory chain and discipline lead chain was designed
to avoid forgetting incidents. Should the manager forget the lesson learned the discipline lead would likely not
forget.
Some of these lessons ended up changing work plans and/or procedures. Every two or three days, targeted
staff received an email notice from the administrator saying Procedure Changed. This usually meant several
procedures had been changed, resulting from either an incident report or a variance request. It was Lotus
Notes based. We take the old one out and put the new one in. Quite a few companies describe these kind of
things in their project management and knowledge management processes, but...to do it is rare.
Lessons learned were proactively distributed by program managers who oversaw several projects. Program
managers may have spotted things that were worthy of being disseminated throughout the organization as a
part of its oversight process. Because program managers were overseeing multiple projects, there was an
ability to disseminate those lessons learned within the sphere of influence of the individual at the next level.
And because they were listening to all of the projects across the country and they were looking for those things
that were working well, they were disseminating that information as they moved around the country.
Sometimes the lessons learned were written, and sometimes they were just discussed in the course of having
a review of a project. They would say, You know, on the Rocky Mountain Arsenal project, our folks are doing
this and such, and often they would prompt a write-up on that from the project that they had heard about.
Then they would broadcast that information across the company. An example was provided by Rick Gleason:
About two or three months ago, I guess it was, the senior vice-president of Remediation, had sought out from
the group of us, in advance of the teleconference, the things that we felt were happening under our programs
that were sort of safety best practices. So, there were probably 10 to 12 of us on the call; each of us within
the domain of our individual programs went in and took a look at what we were doing within those programs
that we thought were a little bit unique, a little bit different, and then, during the course of that phone call we
each had about two or three minutes to lay out we actually gave him an email in advance what we were
doing. One of the things that came out was a remediation project in Corpus Christi, Texas dealing with a fair bit
of work in and around a wetland. It appeared that Hurricane Rita looked like it was going to come ashore in the
Corpus Christi area. The team did not have time to return the equipment before the storm hit, so they arranged
the equipment around the site to be most protective of the materials and supplies. The proactive nature of
what they did became a lesson learned and so, the VP asked them to write it up, and then he disseminated
that to the group of his key program/project managers. Not that were necessarily going to have the same
experience with the same type of a weather event . . . but the kind of pro-activity is really the lesson learned, of
what kinds of things you need to think about and implement before the event, not after the event.
A few years ago, we probably would have made the mistake of saying the contingency plan will include the
following fifteen things and will specify the following fourteen things . . . . Weve moved more towards the
direction of the minimum requirement is that you must have a contingency plan. We stop short of saying you
must specifically include in your plan what youre going to do with your equipment and where youre going to
put it, the idea being think about all these things, but put a plan together that makes sense for you.
Ideally, lessons learned become evolutionary by disseminating them and/or writing them and incorporating
them into the work process. Yet, there is a corporate memory that is also important because it is just not
possible to read 200 Lessons Learned reports and see what is relevant for a particular project. We recognized
that if you put certain things into lessons learned in writing, they become like everything else these days:
discoverable.





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Exhibit 1

TIMELINE OF EVOLUTION OF TETRA TECH EC


1978 1992 1993 2003
ENSEARCH buys EBASCO Don Rogers Sr VP ENSERCH Environment Corp Iormed Tetra Tech buys Foster Wheeler Env.
EBASCO Irom Remediation and Construction renamed Tetra Tech EC
Remediation and Construction

1992 1993 1994 Oct.
EBASCO takes on Raytheon buys EBASCO Foster Wheeler buys
two remediation projects (but not Remediation ENSERCH Environmental
& Construction) renamed Foster Wheeler Environmental
Don Rogers named COO



Exhibit 2

SCHEMATIC OF TASK INITIATION PROCEDURE

Source: Tetra Tech EC PO-2Task Initiation Procedure (TIP), p. 4.


Preguntas de Desarrollo

Discutir la evolucin de la gestin de riesgos y el proceso de cumplimiento en Tt CE .

Revise el Anexo 2 y analice los componentes del proceso y como esto aporta a lo que respecta a la
gestin eficaz del riesgo.
Por qu los empleados sienten que son dueos de la gestin de riesgos y el proceso de
cumplimiento en Tt CE ?
Cmo ha sido este proceso ha inculcado en la cultura de la empresa?
Hay evidencia de un tono tico a nivel de gestin de Tt CE ? Hable .

Elaborar la evaluacin de riesgos en el proceso de iniciacin de tareas ( TIP) y los procesos de
supervisin. Vincula esta discusin con la sensacin de Don Rogers sobre el apetito de riesgo de Tt
CE.
Comparar y contrastar las lecciones aprendidas del enfoque que Tt CE utiliza en su sistema de
gestin del conocimiento con el enfoque utilizado por la mayora de las empresas hoy en da .
Qu ha hecho Tt CE para superar las dificultades relacionadas con la aplicacin ERM ?
Cmo ha Tt CE superar los desafos que enfrentan las empresas orientadas a proyectos ?
Establecer paralelismos y cita diferencias con estos desafos y los problemas asociados a la gestin
estratgica de riesgos (Aydese con lo respondido en la pregunta 4)

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Exhibit 3

ZIP SLIP

Source: Tetra Tech EC.