The Institute of Civil Engineers has produced a timely and though-provoking report: “Reducing the gap between cost estimates and outturns for major infrastructure projects and programmes”.
The report, which should be recommended reading for all in the infrastructure sector, highlights the problem that major projects and programmes suffer from a tendency to cost more or take longer than initial estimates outline.
This is a global issue – not just about the UK. Projects are routinely awarded to the lowest bidder, often regardless of their ability to deliver in a positive, flexible and collaborative manner. And, even where collaborative projects are shown to have a significant positive impact on keeping costs and delays down, there’s a remarkable sluggishness about adopting their principles.
Many in the sector are taking steps to move away from a transactional arrangement to an enterprise model, with seven early adopters forming part of the Infrastructure Client Group’s Project 13. This group seeks to develop a new model for delivering infrastructure projects “...to boost certainty and productivity in delivery, improve whole-life outcomes in operation and support a more sustainable, innovative, highly-skilled industry.”
The concept of Project 13 was originally set out by the Institute of Civil Engineers in its ‘From Transactions to Enterprise’ report. It incorporates the Infrastructure Client Group, which has panel members from key infrastructure organisations and projects, including HS2, the Environment Agency, Highways England, Network Rail, Scottish Power the Transforming Construction Alliance and UK Power Networks.
All these groups, and those involved directly in designing and facilitating project alliancing, believe that more collaborative working, better governance, data-led frameworks and sharing of best practice can all support improvements in project delivery.
The fundamental causes of these hugely expensive and politically sensitive delays include:
Many of the above issues are well known but still often bedevil large projects and programmes. So how do we at JCP address these issues in our work across major projects and programmes?
Complexity can be overwhelming. People are often more comfortable working within environments where cause and effect are clearly linked – even if those environments are complex. Unfortunately, large projects and programmes rarely work as simply as this. So a key to embracing complexity is working collaboratively. By developing closer relationships with partners and other suppliers, we can gain the wider, more measured and more realistic insights needed for accurate project scoping. We work to bring all stakeholders involved in such exercises together at an earlier stage to get the best possible scope set as early as possible.
Leadership Behaviour is always mentioned as a key factor in the success or failure of large projects, and yet it is often ignored in favour of more mechanistic solutions or measures. Leaders often don’t want to change or question their own behaviour (after all it is what has got them where they are), but in our experience leadership behaviour is one of the biggest single influences on the day-to-day success of any project.
In times of extreme financial and performance scrutiny, to which large programmes are often subject, inappropriate leadership and combative governance behaviours result in obfuscation and an overreliance on measurement, process and procedures. Uncollaborative leadership behaviours drive similarly poor behaviours and performance across projects – why should others behave well if leaders don’t?
Projects should be thriving because of the behaviours of their leaders, not despite them. That’s why we coach leaders; challenging them and helping them to understand how to deploy more effective leadership behaviours. Setting the collaborative agenda from the top is key to success – but is only credible if leaders are seen to continuously role model these behaviours in a sustainable way. This also applies to client leadership – they cannot stand separately from, or provide lip-service to, the drive to collaborate or improve.
Better Relationships need to be invested in early. Through the foundations of trust and early collaboration you are able to apply sound and joint foresight to address any lack of thinking and planning. This in turn enables the team to be set up for success – avoiding retrospective sticking plasters – and will provide a positive environment where people want to come to work.
Credible activities underpinned by the right behaviours need to put in place. This isn’t about everyone being friends – it’s about getting collaborative relationship capital in the bank and building relationships between partners so that when things go awry – as they undoubtedly will – there is a credit balance of trust available.
When those unforeseen circumstances arise, you need to be able to focus on what you can influence and control. This is a key driver of better results, and we work with clients to help them build these relationships and realise the benefits of this approach.
Long-running projects or programmes are a risk to maintaining the momentum of effective performance and collaboration. If a project is going to run for years, the onboarding of new staff into the expected way of working in a collaborative environment is vital. We use a robust system to measure and reinforce collaboration, allowing focus to be maintained throughout the life of the project. These systems also allow for the sharing of best practice between partners on large projects and programmes.
Poor management of project risk is also highlighted in the ICE report. The ICE is exactly right to note that: “A failure to work more collaboratively, as part of an enterprise as encouraged by the Infrastructure Client Group’s Project 1322 can lead to risk being pushed down the supply chain or managed poorly by those least able to manage it.” Collaborative working allows risk to be managed in a more appropriate way – with the risk being transparent and sitting with the people best able to manage it.
The challenges of managing diverse stakeholder expectations needs to be approached head-on with innovative solutions and ways of involving them as early as possible. Through collaborative engagement we have helped large projects and programmes improve relationships and buy-in with all kinds of stakeholders, including organisations like the Department for Transport and the Environment Agency.
Procurement processes which focus on cost as the key factor in selecting successful bidders end up encouraging the very behaviour that collaboration tries to avoid. Frustratingly for many, this encourages a win-lose culture with a lack of openness and trust. Twenty-five years ago, the Latham Report on construction highlighted the fact that some forms of procurement encouraged transactional and adversarial behaviours resulting in poor project performance, including cost and timescale overruns.
It remains true today that those transactional and adversarial behaviours are often born out of the procurement and contract negotiation phase. At JCP we believe it’s far more productive to shift the focus of procurement so that bidders are aware of and engaged with the values and behaviours the client is looking for in the long term, designing a procurement process to measure them. Embracing focused collaborative working is an essential element of modern infrastructure project success, we have worked with several large clients to help them do this.
You can see how ready you are for collaboration by taking our quick collaboration tests, and taking a look at the tools we use when introducing collaborative principles to large infrastructure projects.Read the full ICE report here
For More Information Contact:
JCP Press Office on: 01252 711025
JCP Website: http://www.jcpconsultancy.com
Notes to Editor:
JCP Consultancy Ltd was born out of John Carlisle Partnerships in 2002 with original board members and shareholders being: David Curtis, David Maxwell, Diarmid de Burgh Milne, Malcolm Newman and Simon Vaughan. Over the coming years both David Curtis and Malcolm retired from the business and in 2014 Diarmid left JCP to pursue new opportunities. For more information on the JCP board members and the company associates, click here.
JCP specialises in helping major clients, contractors and their supply chains realise the benefits of reduced cost, speedier delivery, increased profit and improved relationships from working collaboratively with each other. They have a 91% success rate in helping clients win work. The company has worked with leading names including Network Rail, National Grid, Highways Agency, Welsh Water, London Underground and Thames Water and with Central Government including DfT, BIS, and HMT Infrastructure UK.