Mega Projects: Are collaboration fails increasing risks?
Bob Hide, co-founder and director at risk management consultancy, Equib discusses the importance of collaboration in supporting the delivery of major infrastructure programmes
Collaboration on the design and delivery of the some of the UK’s leading infrastructure programmes is being tested to the limit – partly due to their scale and the diverse profile of the partners involved, including their supply chains. Are there lessons to be learned?
While collaboration is widely regarded as the most effective means of delivering complex and often high-risk infrastructure programmes – such as rail renewal or tunnel construction projects – practicalities and behaviours can sometimes get in the way. For the project manager, this can increase risk and have an unfavourable effect on delivery outcomes.
Infrastructure programme failure
It is ironic that some of the most notorious examples of programme failure in the UK are public-private partnerships (PPPs), where collaboration was considered essential to the delivery model. On closer consideration, however, we find that these failures were due to flaws in the PPP model itself, which failed to give key partners an accurate understanding of the risks attached to asset transfers. Specifically, they were largely unaware of the condition of ageing or ‘grey’ assets and the costs involved in managing them. This knowledge gap impacted decision making and ultimately undermined the viability of the delivery model and PPP.
With the PPP model having fallen out of favour, collaboration on most of the UK’s mega projects is currently governed by the terms and conditions of NEC Engineering and Construction contracts, which focus on driving collaboration to improve outcomes for the benefit of all stakeholders.
While the partners involved in programme design and delivery are required to sign up to these contracts, project managers may find that effective collaboration is not always easy to achieve. Many large-scale programmes involve a wide range of specialist designers and contractors, many of whom are used to working in other countries where attitudes to collaboration may differ. For example, many of the UK’s rail infrastructure programmes involve the employment of French delivery partners due to their experience of high-speed rail. When it comes to specialist knowledge of signalling systems or rolling stock on the other hand, German or Japanese contractors are more likely to be involved and this internationalism permeates their supply chains too. This cultural diversity, whilst incredibly effective in harnessing global expertise, can test collaborative ways of working.
Managing cultural dissonance
Adhering to the spirit of the NEC suite of contracts, project managers are required to use workshops to bring the client team and contractors together, with the shared goal of smoothing the way to a successful outcome, completing the project on time and on budget. If there is cultural dissonance between the client and contractor teams, for example, this can lead to significant programme delays and cost overruns. The project manager’s role should focus on nipping this in the bud by ensuring that common goals are clearly communicated, and processes are agreed in detail. Where the project manager succeeds in creating a strong team, operational and commercial risk factors are diminished because those involved have a clear understanding of both their shared and individual goals.
To be effective in managing risk, project managers increasingly require strong communication and people skills, in areas such as behavioural management. Raising risk understanding across the programme and nurturing the right behaviours at the start can mitigate risks and improve delivery outcomes for the benefit of everyone.