APM Governance of collaborative working 21 May 2013


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Presentation at the APM Governance SIG conference: Governance and collaborative working 21st May 2013. Martin Samphire, Peter Hansford, Mark Sewell and Andy Murray.

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  • WELCOME etc. Fire alarms I will check and advise, location of facilities, break out area, tea and coffee, dining etc., Background – as well as the SIG and what we do, The ICW and their role? Collaboration is an economic necessary, and BS11000 is being widely used as a process for getting into and leaving a collaborative relationship. The Institute of Collaborative Working (ICW) has been created to promote such an approach, and are involved in the promotion and organisation of this event. Why are we here? To review the emerging world of collaboration and to discuss advice and guidance from what we hear and our experiences, or areas that need to be addressed from a Governance viewpoint. The current economic climate has demanded new ways of working, and we are seeing more collaborative working being undertaken. There is now a real focus on “top to bottom” collaboration through the delivery of any business change, rather than a tacit acknowledgement of working better together. The guide on co-directing change was published in 2007 on this collaborative approach, and I have paraphrased part of the foreword on the next slide ……
  • Many forms of working together – the collaboration word occurs here, and can also be used in quite a few of the “blobs” such as Alliance. But is it actually true collaboration, and how do Senior managers see it?
  • Companies come together with their own structures and we want to examine the mauve triangle ………….
  • Suggestion… This is what we may want to do? Something that I leave to you to see if mention
  • Mark Sewell He will have a chat with you before the conference …………….. Mike Rickett Deputy Senior Vice-President Air Systems UK, Selex ES Mike is responsible for all of the unmanned aircraft activities performed within the UK arm of the Selex Electronics Systems Company which is a wholly owned subsidiary of Finmeccanica SpA. Mike has spent nearly 40 years in the aerospace industry in a variety of senior management roles within the three leading aerospace companies in Europe; BAE Systems, EADS and Finmeccanica. Most of these roles have involved varying degrees of industrial collaboration both within and outside of Europe. Mike was previously Director of Astrium’s Earth Observation and Science Division and more recently was Programme Director for the EuroDASS, European Consortium charged with developing the Praetorian electronic warfare suite for the Eurofighter Typhoon fighter aircraft Harvey Maylor – Biog on separate e-mail
  • Andy Murray – MD of Outperform David Hawkins Operations Director ICW David E. Hawkins is Director of Project Operations for ICW. He has had an extensive career in projects and procurement, particularly in the construction industry, working in many parts of the world. He has developed training programmes and has been a leading speaker in the field of exploiting relationship management through effective leadership and strategy development. He is a regular contributor to professional magazines and journals, is the joint author, with Shan Rajogopal of Sun Tzu and the Project Battleground and author of The Bending Moment: Energizing Corporate Business Strategy, both published by Palgrave Macmillan.
  • Crucially, we don’t want to duplicate or disrupt the good work that is already going on… But we will be setting up some new work streams, for example…
  • Construction at the heart of the economy – key for economic growth in other sectors Over the next ten years e.g. in water – Thames Tideway; in energy – nuclear programme; in housing – huge retrofit programme Great progress on safety, by 2025 want to be in the same place on health; want to be a zero harm industry We want the best and brightest; from a diverse range of backgrounds; boosting the number of women – fresh ideas for the industry We must have the skills to match up to the demand for construction; a workforce ready to meet the industry’s challenges in 2025 Three aspects of sustainability: environmental, social and economic. This strategy will look at all three – need to make the business case for ethical business practices
  • In line with what you have heard today, from your discussion and the booklets – examine the two items in your groups and discuss what you feel is different about a true collaborative approach and what you expect to see from a management viewpoint. You could tackle this from a few views, the ultimate Client on the outside looking in, the MD of Sponsoring companies, the PD and the document controller or site technician. What are the a management questions you would expect to ask in each of these posts? Principles of governance of multi-owned projects 2. Unified decision making 3. Unambiguous project representation 5. Governance compatibility 6. Authorisation points 7. Risk and reward apportionment 8. Efficiency 12. Resolution of conflict Change management Take forward thoughts and outputs and summarise with a view to updating our guidance.
  • Foremost professional institute in UK. PMI in US
  • Andy and I represent APM SIG Governance SIG formed nearly 10 years ago. The APM is committed to influence a transformation in the way that governance is applied. Our vision is a landscape (both UK and internationally) within which organisations have adopted good practice in the governance of project management with impressive and targeted results from their portfolio of project and change initiatives. The GovSIG has adopted the following rationale for the adoption of good governance:   Achieving Change Successfully with Confidence and Control   The target audience for the SIG has tended to be Board members and their equivalents, those that sponsor projects and programmes, portfolio directors, company/organisation secretaries and other senior executives (CxOs). Andy will be explaining more about the definitions
  • Governance very topical – with good cause. US Sarbanes-Oxley Act 2002 UK Companies Act, 2008 UK Corporate Governance Code, June 2010 Impact of project outcome on organizational reputation Financial squeeze Quality and transparency of decision making Relationships
  • ISO std coming out later this year 2 elements to consider
  • Many organisations – e.g. investment bank Governance of individual projects – investment checks and resourcing. Making decisions on a transactional basis – sub-optimal using template + min criteria. Doesn’t look at in the context of the whole portfolio – where best to invest – and by definition some we won’t bother with even if they pass minimum criteria Want best return from a suite of investments Illustrates difference in Project vs PM governance (portfolio) Maybe come back to in panel conversation
  • Do not spend too long on this.
  • Many players – a system with multiple players Everyone needs to play their part – can’t win the premiership just with a world class goalkeeper Sponsors and exec have key roles – influence culture et al.
  • Created the first edition of Directing Change 7 years ago and went on to publish Sponsoring Change and Co-Directing Change. 60000 thousand copies downloaded / sold. Well regarded advice and guidance on how to go about applying good governance practice to the Management of Projects. 2 nd edition Directing change is ranked 53,000 in amazon.co.uk   This is a very good ranking (there are 3m books on Amazon….) Over 60,000 copies of the first edition of this guide are in use internationally by boards of directors, public sector governing bodies, their advisers, academics, trainers and the next generation of senior management currently studying management and business studies. Great Feedback of its use for training, performance improvement, auditing and standard s development in continental Europe, In eastern Europe, in USA and Canada and as far afield as Australia.
  • Focus on GoPM Also on management system Effectiveness of governance Efficiency of governance Overall outcomes of governance
  • APM Governance of collaborative working 21 May 2013

    1. 1. GovernanceandCollaborative working
    2. 2. Welcome and introductions – Martin Samphire Welcome Arrangements and venue information APM- SIG role and development Why are we here?
    3. 3. APM booklet “Co-directing change”“There is an increasing number of multi-owned projects asbusinesses and other organisations seek to capitalise on theircomplementary skills and resources whilst diluting risk exposure.This guide allows Company Director’s and leaders to questionhow well its shared projects are governed, and therefore the riskexposure controlled. “Institute of Collaborative working“Delivery of projects through collaborative working is more than justagreeing a set of objectives, and BS11000 on Collaborative workingprovides guidance on the mechanics, but not necessarily on thespecifics of a governance structure “
    4. 4. Co-directing change booklet
    5. 5. Co-directing change booklet
    6. 6. APM – Governance Specific Interest Group Update of the “Co-directing change booklet” Production of a “White paper” in light of experiences
    7. 7. Agenda for the morning Welcome and Introductions Key note speaker – Peter Hansford Mark Sewell – Associate ICM Coffee Mike Rickett – Selex Harvey Maylor – Cranfield Business School Question and answer panel
    8. 8. Agenda for the afternoon Discussion groups Feedback Afternoon tea APM Governance SIG – Andy Murray ICW – David Hawkins Closing remarks – Martin Samphire Close 16:30
    9. 9. Peter HansfordGovernment Chief Construction Adviser
    10. 10. APM Master ClassKeynote Address Tuesday 21 May 2013Peter Hansford--Government ChiefConstruction Adviser
    11. 11. Government Chief Construction Adviser
    12. 12. Government Construction Strategy• …to reduce the cost ofGovernmentconstruction projectsby 15-20% by the endof this Parliament.• Targeting £2bn over 4years
    13. 13. Infrastructure Cost Review• …to identify savings of15-20% in the cost ofUK infrastructureprojects.• Worth £2.7bn p.a.
    14. 14. BIM – What is it?
    15. 15. BIM – Supply Chain Collaboration
    16. 16. New Engineering Contract
    17. 17. Industrial Strategy for ConstructionA shared long-term vision for the ConstructionIndustry• Developed for business; created with business• Full support from across Government• Action orientated and focused on delivery• Complementing existing commitments - not reinventingthe wheelSetting out where we want to be in 2025
    18. 18. Industrial Strategy work streamsInnovation2025Industrial Strategy– providing a vision for…Ongoing WorkStreamsGovernmentConstructionStrategyBIM StrategyGreenConstructionBoardInfrastructureCost ReviewOverseasTradeAdditionalWork StreamsSkills / CapacitySMEsSupply ChainAccess toFinanceWhole LifeValueImageExports
    19. 19. • Construction will supportsustained growth across theeconomy• Operating in a safe and healthymanner• Attracting the best talent andencouraging innovation• Equipped with the right skills• Ready to capitalise on the vastopportunities for global tradeVisionConstructionIndustry in2025TransportHousingEnergyDigitalInfrastructureWaterCommercialPropertyVision
    20. 20. BIMGreenOff-SiteManufactureClear CareerPathwaysFocus onHealthPipelineGlobalTradeEmerging Themes (1)
    21. 21. ProcurementRMICulture &BehavioursCapability &CapacityImageInnovationAccess toFinance &PaymentEmerging Themes (2)
    22. 22. Thank you
    23. 23. Benefits of Organisations Working TogetherMark Sewell - ICW
    24. 24. Benefits of OrganisationsWorking Together My background – relevance Objective – stimulate thought Successful collaborative relationships- What does ‘best practice’ look like?- Common themes across approaches? Case studies to illustrate benefits What we need to do to support successful collaboration
    25. 25. Background - Mark Sewell Brighton Marina, Thames Barrier, CairoWastewater scheme & Immersed TubeTunnels Last 25yrs with Balfour Beatty – acrossinfrastructure sectors Major collaborative programmes – HA ECI,MoD Prime, BAA Complex Integrator, ODAOlympic Park, Network Rail & Connect PlusM25 Business development, formingrelationships, tendering and projectmobilisations (collaborative) Last 2yrs taking Balfour Beatty PLC throughthe BS11000 Collaborative BusinessRelationships certification process
    26. 26. Objective – Collaborative Business Relationships‘To help stimulate yourthoughts’………3 Questions to askyourself:- How is it that some collaborative projectsperform better than others? What are the contributors and inhibitors tosuccessful collaborative projects? How do we learn from our experience andtranslate this into best practice?
    27. 27. Successful Collaborative RelationshipsWhat does ‘best practice’ look like?Co-directing ChangeBS11000
    28. 28. Successful Collaborative RelationshipsCommon themes across these approaches: Aligned Project Objectives & understanding of individual objectives An integrated delivery organisation Common systems and processes Contract conditions that encourage a collaborative environment Joint Risk Management An Issues resolution process combined with an early warning system Joint Value Creation Process Collaborative Culture – with Behavioural developmentOverall - A ‘Best for Project’ approach
    29. 29. Case Studies to illustrate themes(and a question for thought)
    30. 30. Alignment of Project Objectives –Finsbury Park to Alexander Palace£40m Overall Budget£20m Lump SumFixed PriceJoint alignmentworkshopsNR Contingencies:Works Trains, materials supplyCompensation TOC’s FOC’sPossession costs etc.Lump SumFixed PriceTarget CostPain & GainIntermediateTarget CostQ – What forms of contract arrangements encourage collaboration?
    31. 31. Organisational Integration –Q – How can we prepare ourselves better for integrated team working?TUPE- Creation of ‘one team’- ‘New World’ workshops for 650 staff- ‘Best person’ for the role between partners- Focussed on objectives agreed with HA- Every team and team member knows whatthey are there to achieve, aligned to acommon directionRecognised by HA as model process
    32. 32. Joint Risk Management – NWGAContractorRiskClientContingencyContractorRiskSharedRiskClientContingencyJoint ProactiveAnd ReactiveMitigation=No transferred riskNo transferred riskShared Risk PrincipleQ – Do we ask our partners and suppliers to take on unrealistic risk?
    33. 33. Contract Conditions – ODA Aquatics Centre After PQ ODA sent out aframework contract andengaged in 3 months ofcompetitive dialogue withtenderers Bidders conditions werecustomisedQ – How do we engage with our partners and suppliers on a best value basis?ODA recognised that on complex multi-disciplinary projects with manystakeholders circumstances will changeODA Objective – to enable bidders todeliver best value to ODA
    34. 34. Issue Resolution – A3 HindheadQ – How do we encourage the early identification of potential issues?Case Study:•High Profile public infrastructure project•High Multi Stakeholder & community interest•Complex technical constructionSolution:•Detailed Stakeholder mapping and engagement•Early identification of potential issues - reward•Detailed contingency planning and mitigationLearnings• Early issue recognition analysis and resolution – with all Stakeholders• Understand that all parties are working towards the same goal.• Agree in advance how the contract should be administered - stepped escalation andissue resolution process.This required a cultural change in approach supported by behavioural development
    35. 35. Value Creation – Terminal 2BQ – How do we create a culture to support innovation and value creation?
    36. 36. To support successful CollaborationWe all (Clients, Partners, Sub-contractors & Suppliers) need to domore of the following……….– Understand your own specific objectives– Help to align the objectives of all parties in the relationship– Select the leadership and team on a ‘best person’ basis– Be prepared to share more information– Raise the difficult issues early in an open and honest way– Encourage joint Value Creation and Risk Management– Develop your people for collaborative working– Support each other - especially in adverse circumstances
    37. 37. Question and answer session
    38. 38. Discussion group guidance On-going discussion Feedback Outputs
    39. 39. Andy Murray –APM Governance specific interest group
    40. 40. Introducing APM Governance SIG#APMGovernance@APMGovernancewww.apm.org.uk/group/apm-governance-specific-interest-group
    41. 41. APM missionWorking collaboratively, create new standards andknowledge and enhance their application amongstindividuals and organisations, such that all projectssucceed.41
    42. 42. Governance SIG objectives Be the UK focus Advance understanding Contribute to good practice Influence national and international standard making authorities Influence those operationally responsible Develop ambassadors and exemplars of excellence42….in the governance of project management (change)
    43. 43. Governance SIG activities Engagement – CxO level and APM members Governance Benchmarking Group Conferences and Seminars Publications Development (of Governance material) Influence of and contribution to standards43
    44. 44. OECD IOD IndependentCommission on GoodGovernance in PublicServicesCorporate Governance definitionsCorporate governanceinvolves a set of relationshipsbetween a company’smanagement, its board, itsshareholders and otherstakeholders.Corporate governance alsoprovides the structure throughwhich the objectives of thecompany are set, and themeans of attaining thoseobjectives and monitoringperformance are determined.A governance frameworkshould ensure that corporateboards effectively monitormanagerial performance andachieve an equitable returnfor shareholders – reinforcingthe values of fairness,transparency, accountabilityand responsibility.The function of governance isto ensure that an organisationor partnership fulfils its overallpurpose, achieves its intendedoutcomes for citizens andservice users, and operates inan effective, efficient andethical manner.
    45. 45. Project Management Governance – APMThe governance of project management concernsthose areas of corporate governance that arespecifically related to project activities.Effective governance of project management ensuresthat an organization’s project portfolio is aligned tothe organization’s objectives, is delivered efficiently,and is sustainable.Governance of project management also supports themeans by which the board and other major projectstakeholders exchange timely, relevant and reliableinformation.PM Governance definitionsProject Governance- ISO 21500Governance is theframework by which anorganization is directedand controlled. Projectgovernance includesbut is not limited tothose areas oforganizationalgovernance that arespecifically related toproject activities.45
    46. 46. 46Change in contextPortfolio Mgmt –Definition &MonitoringOperationalPlanning & MgmtProgramme and ProjectMgmt of authorisedP&PsOperational Mgmtof on-going operations(BAU)Organisational and External Resources delivering tasksVisionPortfolio Management“Doing the rightprojects”Programme & ProjectManagement“Doing the projectsright”Focusonon-goingserviceandperformanceFocusonchange46
    47. 47. Project Governance and GoPMProject/Programme Level Organisational LevelProject board regularly chaired by a sponsor Individuals stay in sponsor role throughout each projectlifecycleGovernance structure for a project defined Sponsors are accredited and accountableProgress reporting for a project is accurate and timely Projects report against a common template. Exceptionreports available at executive levelThere is a coherent project plan Projects are prioritised in line with strategic objectivesProject stakeholders are involved in the direction of aprojectThe board directs the change agendaThere is an integrated assurance and approvals planfor a projectThe board has oversight of the gate review programme– individual executives are intimately involved inreviewsThe project management team is competent and fullyresourcedAll project players are trained, assessed against acompetency framework, accredited? Capacity isbalanced against demand47
    48. 48. BoardGovernance isn’t just what the project boarddoes!CEODirectorsNEDPortfolioMgrsProgrammeMgrsProjectMgrsSponsorsFunctionalMgrsSuppliersPartnersStakeholdersAssuranceMgrsRiskMgrsThey all need to be competent in their change role48
    49. 49. Directing Change2ndedition 201149Co-Directing Change2007Sponsoring Change2009Free to APM members at www.apm.org.uk/memberdownloadsGovSIG – Publications to date
    50. 50. Directing Change from APM1. Portfolio direction2. Sponsorship3. PM Capability4. Disclosure and reporting50
    51. 51. Co-directing Change - Components1.Alignment2.Owning-organisation sponsorship3.Project management4.Disclosure and reporting5.Reward and risk6.Joining & leaving
    52. 52. Co-directing Change - PrinciplesP1. Formal arrangementsThere should be formally agreed governancearrangements.P2. Unified decision makingThere should be a single point of decision making for theproject.P3. Unambiguous project representationThere should be a clear and unambiguous allocation ofauthority for representing the project in contacts withowners, stakeholders and third parties.P4. Business caseThe project business case should include agreed, andcurrent, definitions of project objectives, the role of eachowner, their incentives, inputs, authority andresponsibilities.P5. Governance compatibilityEach owner should assure itself that the legal competenceand obligations, and internal governance arrangements ofco-owners, are compatible with its acceptable standards ofgovernance for the project.P6. Authorisation pointsThere should be project authorisation points and limitingconstraints to give owners the necessary degree of controlover the project.P7. Risk and reward apportionmentThere should be agreed recognition and allocation or sharing of rewards andrisks, taking account of ability to influence the outcome and creating incentives tofoster co-operative behavior.P8. EfficiencyProject leadership should exploit synergies arising from multi-ownership andshould actively manage potential sources of conflict or inefficiency.P9. Participation changeThere should be a formal agreement that defines the process to be invoked andthe consequences for assets and owners when a material change of ownership isconsidered.P10. ReportingReporting during both the project and the realization of benefits should providehonest, timely, realistic and relevant data on progress, achievements, forecastsand risks to the extent required for good governance by owners.P11. Independent reviewThere should be a mechanism in place to invoke independent review or scrutinywhen it is in the legitimate interests of one or more of the project owners.12. Resolution of conflictThere should be a dispute resolution process agreed between owners that doesnot endanger the achievement of project objective.
    53. 53. Benefits of adopting a formal approach Optimise your portfolio of projects Avoid many of the common failures in project andprogramme performance Improve relationships with staff, customers and suppliers Minimise risks to the organisation arising from projects Maximise the benefits to be realised from projects Assurance of the continued development of the organisation Assurance that robust governance requirements are appliedacross the projects managed in your organisation 53
    54. 54. Future APM GovSIG events 12thJune – Updating Co-directing Change 10thJuly – A Tale of Two Programmes
    55. 55. Thank YouThe Governance SIG is always seeking new members.See the SIG pages on APM website for details.www.apm.org.uk/group/apm-governance-specific-interest-groupAny questions?55
    56. 56. Summary and closing remarks