Driving performance in public sector infrastructure projects

Pub­lic sec­tor organ­i­sa­tions have long recog­nised the need to be more out­come and per­for­mance focused. While sig­nalling the right intent, many strug­gle to trans­late desired out­comes into tan­gi­ble out­puts from their employ­ees and sup­pli­ers.

A gen­er­al ethos of reduc­ing cost above all else com­pounds this chal­lenge. Fur­ther­more, the organ­i­sa­tions often out­source the prob­lem to a sup­ply chain that is increas­ing­ly frag­ment­ed and under pres­sure to bid for con­tracts at very low mar­gins. Sup­pli­ers then hope to make mon­ey from vari­a­tions to the orig­i­nal con­tract that either were not or could not be spec­i­fied up front, often tak­ing advan­tage of their client’s poor plan­ning, organ­i­sa­tion or deci­sion-mak­ing.

Part­ner­ships and alliances are tout­ed as mech­a­nisms for deliv­ery assur­ance and improved per­for­mance, but there are still sig­nif­i­cant incon­sis­ten­cies in their effec­tive­ness and prac­ti­cal­i­ty. The biggest chal­lenge is usu­al­ly to align organ­i­sa­tions around incen­tives, which often involves increas­ing risk in exchange for high­er prof­it, and ensur­ing all par­ties are focused and organ­ised around a com­mon out­come. This is eas­i­er said than done.

For major, com­plex infra­struc­ture projects, it extends beyond the phys­i­cal con­struc­tion effort to incor­po­rate the plan­ning and design phas­es. The pub­lic and polit­i­cal out­cry at the spi­ralling cost of many high-pro­file pro­grammes, or fear that they will over­spend sig­nif­i­cant­ly, comes from a per­ceived inabil­i­ty to nail crit­i­cal deci­sions, and plan and design in a rea­son­able time­frame. There are many polit­i­cal rea­sons why cham­pi­ons of the HS2 rail link, Hinck­ley Point C nuclear pow­er sta­tion and Heathrow Airport’s third run­way con­tin­ue to say those projects will deliv­er for the quot­ed costs, but the odds are they will not.

None of this is rock­et sci­ence, but it is remark­able how many organ­i­sa­tions strug­gle to put it into prac­tice

Inno­va­tion and digi­ti­sa­tion play impor­tant roles in improv­ing the per­for­mance of infra­struc­ture organ­i­sa­tions. Much of our work involves imple­ment­ing inno­va­tion and dig­i­tal strate­gies, but we do it through the lens of fol­low­ing the mon­ey. This means mas­ter­ing the basics of pro­duc­tiv­i­ty and per­for­mance, which starts with know­ing what your core suc­cess mea­sures are and how you are per­form­ing. In infra­struc­ture deliv­ery you need right-to-left plan­ning, which means work­ing back­wards from the answer of what needs to be in place and by when to hit key mile­stones and per­for­mance out­comes.

Cur­zon & Com­pa­ny is cur­rent­ly part­ner­ing with a major pub­lic sec­tor infra­struc­ture client to move the organ­i­sa­tion towards a per­for­mance man­age­ment cul­ture. There are three stages in address­ing the per­for­mance chal­lenge: scan, focus and act.

The scan phase estab­lish­es the base­line, tra­jec­to­ry and key dri­vers of per­for­mance. One crit­i­cal out­put is a sin­gle ver­sion of the truth across scope, activ­i­ty, cost and risk. Focus is about pri­ori­ti­sa­tion and chan­nelling effort to where it has most impact. Major wins often come from an empha­sis on look­ing for­wards and address­ing future risks rather than report­ing his­tor­i­cal per­for­mance.

The third stage is act, which means actu­al­ly doing things dif­fer­ent­ly. It involves engag­ing the organ­i­sa­tion and their part­ners at pro­gramme and project lev­el to adopt new ways of work­ing. Com­mon mea­sures, good infor­ma­tion and “heart­beat” dis­ci­plines get results.

None of this is rock­et sci­ence, but it is remark­able how many organ­i­sa­tions strug­gle to put it into prac­tice.

Our client now has trans­paren­cy of pre­vi­ous­ly hid­den effi­cien­cies, pro­vid­ing them and their reg­u­la­tor with the con­fi­dence they are meet­ing their com­mit­ments. They can man­age the afford­abil­i­ty of the pro­gramme proac­tive­ly, a key ben­e­fit where scope require­ments evolve over time.

They are off­set­ting build cost risks by focus­ing on high-cost ele­ments with stan­dard­ised prod­uct design and pro­duc­tiv­i­ty bench­marks. Most impor­tant­ly, they are deploy­ing tools and dis­ci­plines at project-site lev­el where suc­cess, or fail­ure, is deliv­ered.

For more infor­ma­tion please vis­it curzoncompany.com