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Building Client Capability to Deliver Megaprojects - J. Denicol, professor at the UCL/Bartlett School of Construction

Presented at the OECD expert meeting "Construction Risk Management in Infrastructure Procurement: The Loss of Appetite for Fixed-Price Contracts", held on 17 May 2023 at the OECD, Paris and online.

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Building Client Capability
to Deliver Megaprojects
Dr Juliano Denicol
Director Megaproject Delivery Centre, UCL
LONDON’S GLOBAL UNIVERSITY
juliano.denicol@ucl.ac.uk
@Juliano_Denicol
Introduction
Dr Juliano Denicol
Associate Professor in Megaproject Management
• Director Megaproject Delivery Centre
• Director MBA Major Infrastructure Delivery
• Global Head IPMA Megaprojects SIG
juliano.denicol@ucl.ac.uk
@Juliano_Denicol
Centre: Transforming Infrastructure Performance
UCL + The Bartlett
• Ranked 8th in the world
• 30 Nobel Prize laureates
• The Bartlett is ranked global #1 in 2023
MBA Major Infrastructure Delivery
• Transform the performance of major infrastructure projects
• Develop the next generation of global infrastructure leaders
5
Research
What Are the Causes and Cures of Poor Megaproject Performance?
Megaproject Performance
6
Methodology
Megaprojects
AND
Success
AND
Failure
Methodology
Megaproject Synonyms: megaproject, major project, large-scale project, large-scale construction project, large-scale urban
development project, large engineering project, large construction project, large project, large technical system, large construction
program, large program, system of systems, grand scale project, unique project, complex products and systems, global project, mega
capital project, high rise project, high rise construction project, transformational project, complex project, complex program, teraproject,
tera project, teraprogram, tera program, gigaproject, giga project, gigaprogram, giga program, giant project, giant program, public
works project, macro engineering project, infrastructure project, infrastructure program, complex infrastructure project, monumental
project
Success Synonyms: Benefit, success, output, outcome, value, legacy, achievement, accomplishment, attainment, delight,
complete, punctual, efficiency, effective
Failure Synonyms: Failure, breakdown, break, collapse, decline, deficiency, deterioration, disruption, overrun, delay, late, shortfall,
shortage, insufficient, incomplete
Structure of findings – Themes
1
2
3
4
5
6
Structure of findings – Concepts 18
Structure of findings – Causes 18
Structure of findings – Cures 54
Structure of findings
2
Six Themes
1. Decision-making behaviour
2. Strategy, governance and procurement
3. Risk and uncertainty
4. Leadership and capable teams
5. Stakeholder engagement and management
6. Supply chain integration and coordination
2. Strategy, governance and procurement
2
Sponsor, client, owner, operator
Delivery model strategy
Governance
Clear roles of promoter and provider
Define scope, remove ambiguity
Establish informed organisations
Definitions of roles and responsibilities
Balance in-house and outsourced capabilities
Design and evolution of governance structure
Balance risk between promoters and the supply chain
Adopt integrated project teams
Early contractor engagement
PSO
Project
System
Organisation
Denicol et al., (2021). The organisational
architecture of megaprojects. International
Journal of Project Management, 39(4), 339–350.
https://doi.org/10.1016/j.ijproman.2021.02.002
Tier 2s
Tier 3s
Tier 4s
Tier 5s
Crossrail Ltd
Tier One
Suppliers
Sponsors TfL DfT
PP PDP
Client
Delivery Partners
Crossrail
Interface 1
Interface 2
Interface 3
Crossrail
• Two sponsors worked well controlling each other
- Constant changes from the sponsor – one of the most common causes of failure
• Public to public arm’s length organisation
- Analyse previous models around the world – increasing popularity
- During development, the client organisation is strongly affected by the Hybrid Bill
• Involve the operator as early as possible
- Create/incorporate the operations team from the start
Sponsors
Client
Tier One
Partner
Tier 2s
Tier 3s
Tier 4s
Tier 5s
Interface 1
Sponsor – Client
Sponsors
Client
Tier One
Partner
Tier 2s
Tier 3s
Tier 4s
Tier 5s
• Appoint recognised partners (development and delivery)
- Consider the creation of joint ventures, evaluate the internal dynamics
• Manage the transition between development and delivery
- The handover between the development and the delivery partner (clarify outputs)
• Prepare the client organisation to absorb capacity and capability
- Define clear accountabilities to manage degrees of client integration
Interface 2
Client – Partner
Sponsors
Client
Tier One
Partner
Tier 2s
Tier 3s
Tier 4s
Tier 5s
• Engage with the market and communicate the strategy
- The market will react and organise partnerships (JVs, tier 2 integration)
• Consider carefully the challenges of decomposition and integration
- Structure the client organisation to integrate interfaces and manage interdependencies
• Clarify who is managing the supply chain (client vs delivery partner)
- Shield the supply chain from external disturbances, continuous focus on production
Interface 3
Denicol (2020). Managing Megaproject Supply Chains: Life After Heathrow Terminal 5. https://doi.org/10.1002/9781119450535.ch10
Client – Supply Chain
MBF
Megaproject-based
Firm
Denicol & Davies (2022). The Megaproject-based Firm: Building programme management capability to deliver megaprojects.
International Journal of Project Management, 40(5), 505–516. https://doi.org/10.1016/j.ijproman.2022.06.002
Building Client Capability
to Deliver Megaprojects
Dr Juliano Denicol
Director Megaproject Delivery Centre, UCL
LONDON’S GLOBAL UNIVERSITY
juliano.denicol@ucl.ac.uk
@Juliano_Denicol

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Building Client Capability to Deliver Megaprojects - J. Denicol, professor at the UCL/Bartlett School of Construction

  • 1. Building Client Capability to Deliver Megaprojects Dr Juliano Denicol Director Megaproject Delivery Centre, UCL LONDON’S GLOBAL UNIVERSITY juliano.denicol@ucl.ac.uk @Juliano_Denicol
  • 2. Introduction Dr Juliano Denicol Associate Professor in Megaproject Management • Director Megaproject Delivery Centre • Director MBA Major Infrastructure Delivery • Global Head IPMA Megaprojects SIG juliano.denicol@ucl.ac.uk @Juliano_Denicol Centre: Transforming Infrastructure Performance
  • 3. UCL + The Bartlett • Ranked 8th in the world • 30 Nobel Prize laureates • The Bartlett is ranked global #1 in 2023
  • 4. MBA Major Infrastructure Delivery • Transform the performance of major infrastructure projects • Develop the next generation of global infrastructure leaders
  • 5. 5 Research What Are the Causes and Cures of Poor Megaproject Performance?
  • 8. Methodology Megaproject Synonyms: megaproject, major project, large-scale project, large-scale construction project, large-scale urban development project, large engineering project, large construction project, large project, large technical system, large construction program, large program, system of systems, grand scale project, unique project, complex products and systems, global project, mega capital project, high rise project, high rise construction project, transformational project, complex project, complex program, teraproject, tera project, teraprogram, tera program, gigaproject, giga project, gigaprogram, giga program, giant project, giant program, public works project, macro engineering project, infrastructure project, infrastructure program, complex infrastructure project, monumental project Success Synonyms: Benefit, success, output, outcome, value, legacy, achievement, accomplishment, attainment, delight, complete, punctual, efficiency, effective Failure Synonyms: Failure, breakdown, break, collapse, decline, deficiency, deterioration, disruption, overrun, delay, late, shortfall, shortage, insufficient, incomplete
  • 9. Structure of findings – Themes 1 2 3 4 5 6
  • 10. Structure of findings – Concepts 18
  • 11. Structure of findings – Causes 18
  • 12. Structure of findings – Cures 54
  • 14. 2 Six Themes 1. Decision-making behaviour 2. Strategy, governance and procurement 3. Risk and uncertainty 4. Leadership and capable teams 5. Stakeholder engagement and management 6. Supply chain integration and coordination
  • 15. 2. Strategy, governance and procurement 2 Sponsor, client, owner, operator Delivery model strategy Governance Clear roles of promoter and provider Define scope, remove ambiguity Establish informed organisations Definitions of roles and responsibilities Balance in-house and outsourced capabilities Design and evolution of governance structure Balance risk between promoters and the supply chain Adopt integrated project teams Early contractor engagement
  • 16. PSO Project System Organisation Denicol et al., (2021). The organisational architecture of megaprojects. International Journal of Project Management, 39(4), 339–350. https://doi.org/10.1016/j.ijproman.2021.02.002
  • 17. Tier 2s Tier 3s Tier 4s Tier 5s Crossrail Ltd Tier One Suppliers Sponsors TfL DfT PP PDP Client Delivery Partners Crossrail Interface 1 Interface 2 Interface 3 Crossrail
  • 18. • Two sponsors worked well controlling each other - Constant changes from the sponsor – one of the most common causes of failure • Public to public arm’s length organisation - Analyse previous models around the world – increasing popularity - During development, the client organisation is strongly affected by the Hybrid Bill • Involve the operator as early as possible - Create/incorporate the operations team from the start Sponsors Client Tier One Partner Tier 2s Tier 3s Tier 4s Tier 5s Interface 1 Sponsor – Client
  • 19. Sponsors Client Tier One Partner Tier 2s Tier 3s Tier 4s Tier 5s • Appoint recognised partners (development and delivery) - Consider the creation of joint ventures, evaluate the internal dynamics • Manage the transition between development and delivery - The handover between the development and the delivery partner (clarify outputs) • Prepare the client organisation to absorb capacity and capability - Define clear accountabilities to manage degrees of client integration Interface 2 Client – Partner
  • 20. Sponsors Client Tier One Partner Tier 2s Tier 3s Tier 4s Tier 5s • Engage with the market and communicate the strategy - The market will react and organise partnerships (JVs, tier 2 integration) • Consider carefully the challenges of decomposition and integration - Structure the client organisation to integrate interfaces and manage interdependencies • Clarify who is managing the supply chain (client vs delivery partner) - Shield the supply chain from external disturbances, continuous focus on production Interface 3 Denicol (2020). Managing Megaproject Supply Chains: Life After Heathrow Terminal 5. https://doi.org/10.1002/9781119450535.ch10 Client – Supply Chain
  • 21. MBF Megaproject-based Firm Denicol & Davies (2022). The Megaproject-based Firm: Building programme management capability to deliver megaprojects. International Journal of Project Management, 40(5), 505–516. https://doi.org/10.1016/j.ijproman.2022.06.002
  • 22. Building Client Capability to Deliver Megaprojects Dr Juliano Denicol Director Megaproject Delivery Centre, UCL LONDON’S GLOBAL UNIVERSITY juliano.denicol@ucl.ac.uk @Juliano_Denicol