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Future Engineers: Delivering tomorrow, today

The government’s National Infrastructure Plan suggests that infrastructure projects worth an estimated £355bn are in the pipeline for the next five years or so, including transport, energy and flooding schemes.

Among them are the high profile mega projects that tend to dominate the news – High Speed 2 (HS2), Hinkley Point C and the Thames Tideway Tunnel – but the list also includes much needed flood alleviation and road junction improvement projects, as well as the water and rail sectors’ latest five year spending programmes. 

At the same time, a buoyant commercial sector in many of the UK’s biggest cities means private sector construction is also on the up – as evidenced by the number of cranes visible on the London skyline. 

You could assume that, after almost five years in recession, the industry should be rejoicing at the prospect of all this work in the years ahead. But, while consultants and contractors are jostling to pick up individual contracts and frameworks, the industry as a whole is starting to ask how on earth we can deliver all of these projects with a limited pool of skilled people. 

“What BAA achieved in terms of real programme management was that they started to align behaviours through the project’s commercial model” 

Andrew Hazard, Rhead Group 

The answer, as many industry commentators and experts have pointed out, is by not doing things the same way we have always done them before. 

Rhead

This is not new thinking. As long ago as 1994 Sir Michael Latham, in his report “Constructing the team”, identified inefficiencies, and condemned industry practices as adversarial, ineffective, fragmented, incapable of delivering for clients, and lacking respect for employees. He urged reform, and advocated partnering and collaboration throughout the industry. 

Latham realised that there was a lot of inefficiency in the industry, and believed that this would be reduced if the adversarial atmosphere prevalent in most construction projects was replaced by openness, co-operation, trust, honesty, commitment and  mutual understanding.

Change needed

Twenty years on, many of the concepts Latham identified have been adopted in the industry, but another radical change is needed in order to deliver all the projects in the national infrastructure pipeline, says Rhead Group infrastructure managing director Andrew Hazard. “Latham was a watershed. You can link everything back to that era – it’s when the industry first started thinking there’s a smarter way of doing this. 

“But the step change we need now is about thinking completely differently,” he adds. 

Hazard describes this new way of thinking as “programme management”, but his definition of the phrase is different from many in the industry. The phrase has become increasingly familiar in the infrastructure sector over the last five years, and it is often used in relation to the efficient management of linked projects within an overall programme. 

This is over simplistic, and will not achieve the required change in the industry, says Hazard, who instead defines programme management as “achieving benefits-driven outcomes”, which, he says, “must also include truly optimised early, full stakeholder engagement”. 

Supply chain

Despite all the lessons learnt since Latham’s report, Hazard believes that the industry is still not effectively utilising the supply chain, because the supply chain is not usually aware what the outcomes are that a certain project is trying to achieve. Instead, they are brought in at the next stage, when “outcomes” have already been turned into “outputs” – the projects. 

“There are some examples of where we are beginning to reach the foothills of programme management,” he says. 

Those examples of good practice include the £4bn project to build Terminal 5 (T5) at Heathrow Airport, which Hazard says incorporated many of Latham’s recommendations. 

“What BAA achieved in terms of real programme management was that they started to align behaviours through the project’s commercial model,” he explains. 

This has since been taken on by the @One Alliance, which has been delivering the bulk of Anglian Water’s investment programme during the AMP4 and AMP5 regulatory periods. “They have achieved more in terms of increased and optimised early contractor involvement, which leads to more inclusive agreement and alignment around the outcome,” says Hazard. “But I think we can go further and certainly improve longer term visibility of programme commitment to the supply chain.” 

Hazard commends the commercial models adopted for T5 and the @ One Alliance, which include joint incentivisation that creates interdependencies between the various parties involved. But, he says, “Fundamentally, programme management is about the softer skills.

Blockers

“The blockers to this are behavioural – in the commercial world we don’t trust each other enough. The challenge is to overcome human behaviour and work more effectively together,” he adds. “What you are trying to do is to deliver benefitsdriven outcomes through the coordination of outputs, which means it is about really understanding the benefits.” 

In the water sector, for example, an outcome might be a 30% increase in the water quality of a certain river. “Everyone buys into that outcome, and that doesn’t change,” Hazard explains. “Which means there are no compensation events, because there is no change. 

“These things have to come down to efficiency. Ultimately, you need to find what is going to give you most effective and efficient delivery of the benefit you seek.” 

Hazard’s programme management model requires clear visibility and a shared understanding of what the benefits are. In the water example, “everyone” could include customers, local communities and regulators, as well as the delivery team. But in some instances, the sheer number of parties involved could make it almost impossible to agree the benefits. 

“Programme management is about benefits-driven outcomes in complex stakeholder environments, so the complexities of benefits mapping should not be underestimated,” says Hazard. 

When it comes to a project like High Speed 2 (HS2), for example, it may be almost impossible to expect all the people and parties with an interest in the project – including environmental lobbyists and local community groups – to agree on the benefits or the outcomes. 

“Could we come up with that solution through optimised engagement of all stakeholders?” questions Hazard. “It may even be too difficult to programme manage, and if you accept that someone’s got to come up with a solution, then it becomes a complex linear project to manage, not a programme.” 

Don’t isolate

But Hazard does think that major infrastructure projects like HS2 should not be considered in isolation. Rather, the National Infrastructure Plan should be looked at in programme management terms: what are the benefits we, as a nation, are trying to gain through building all this infrastructure. 

A big list of individual projects, each of which go through their own business justification and planning processes, without considering how they contribute to the overall outcomes required by the UK, is not the most efficient way to deliver the infrastructure we need, he says. 

“When you look at UK plc, and the National Infrastructure Plan, one of challenges is coordinating all the benefits,” he explains. For example, what is the point of building individual airports or individual roads? These projects are complex individually, but they have intrinsically linked outputs. 

“If you take it at this level you’ve got half a chance of programme managing the UK infrastructure requirement over the next 40 years.” 

Produced in association with Rhead Group.

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