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Don Ward: Never Waste a Good Crisis
- 1. “ Never waste a good crisis” Don Ward Chief Executive Constructing Excellence
- 4. Industry reform can be charted by a number of key reports... 1994.........................................................2009
- 7. Client satisfaction with the service (and the product) they receive is up Scoring 8/10 or better 58% 63% 63% 65% 71% 74% 77% 79% 75% 77% 84% 50% 60% 70% 80% 90% 100% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
- 8. The industry has improved its safety performance...
- 10. But cost (and time) predictability remains a problem % On or under cost 50% 46% 48% 52% 50% 48% 45% 46% 49% 48% 0% 20% 40% 60% 80% 100% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
- 11. On time & to budget
- 13. Demonstration projects have out-performed the rest of the industry 7700 0 50 100 150 200 250 300 350 Client Satisfaction - Product Client Satisfaction - Service Defects Environmental Impact Product Environmental Impact Process Safety * Safety - All Companies * Safety - Companies T/O > £10m * Predictability Cost - Design Predictability Cost - Construction Predictability Time - Design Predictability Time - Construction Profitability ** Productivity Construction Cost Construction Time Employee Satisfaction Staff Turnover Qualifications & Skills 2006 pan-industry performance = 100 CE 2006 Industry 2006 = 100
- 14. Demonstration projects have out-performed the rest of the industry 7700 0 50 100 150 200 250 300 350 Client Satisfaction - Product Client Satisfaction - Service Defects Environmental Impact Product Environmental Impact Process Safety * Safety - All Companies * Safety - Companies T/O > £10m * Predictability Cost - Design Predictability Cost - Construction Predictability Time - Design Predictability Time - Construction Profitability ** Productivity Construction Cost Construction Time Employee Satisfaction Staff Turnover Qualifications & Skills 2006 pan-industry performance = 100 CE 2006 Industry 2006 = 100
- 15. Overall, the industry has met 2 of Egan’s targets and made progress on 2 others. Demonstrations have done much better
- 16. The KPIs and demonstrations plus a regional network of 12 partners and over 40 best practice Clubs give us our evidence
- 18. We remain committed to the Construction Commitments and are working with the ODA and OGC to measure their impact, as well as assessing our members Procurement and integration Commitment to people Client leadership Design quality Sustainability Health and safety
- 19. Collaborative working has been the foundation of industry improvement
- 20. There are three key principles which define collaborative working Leadership Vision Process measures People issues
- 22. The recession challenged commitment to collaborative working - 28% - 57% + 20% + 36% - 36% - 41%
- 23. The current industry recession is a major threat to the sector Construction output £m in 2000 prices Source: CSN (ONS, NISRA, Experian)
- 24. This ‘economic climate change’ means companies face a stark choice Collaborative Working Champions ‘Survival Guide’
- 25. A not-so-recent challenge Q: “What’s next after frameworks?” A: “More frameworks... ...and do them properly!”
- 28. Lowest price lump sum tendering incentivises conflict Tender price Value added/benefit for client - people, supplies Profit Other cost/waste Claims = extra cost + profit ‘ Right’ price Overheads
- 29. A fair ‘target price’ incentivises collaboration Tender price Manage Agreed ‘ Target price’ Agreed Reduce Increase Claims = extra cost + profit Value added/ benefit for client Profit Other cost - waste Overheads Risk
- 32. Above all, clients want value Value = Benefit ___________ Cost More for less
- 33. “ Is our sector fit-for-purpose for a future low carbon economy?”
- 34. Of the whole life-cycle of construction, clients only get value from the use of the facility DEVELOP MANAGE CONSULT CONSTRUCT DESIGN LIFE CYCLE
- 35. The value of customer outcomes far outweighs the project costs Design £100K Construction “ £200M” Business Costs “ £5M” “ £1M” Operation and Maintenance Process Push User Pull Outcomes “ £250-£2000M”?
- 40. For further information www.constructingexcellence.org.uk or contact [email_address]
Editor's Notes
- Thank you and good morning For a long time we were carrying a working title of ‘a little less talk a lot more action please’ Presley Quote from one of Baracka Olbama’s aids. ‘Never waste a good crisis’. I said the cover should have a road, about 10 years long, pointing towards sky with clouds. It should then have a bend that changed the direction of travel towards a crisis – leaving in peoples mind doubt as to whether the road avoids or passes directly through the storm. If ever you are invited to chair an industry report there should be a simple check sheet Are you about to make a major career change? Having done so are you about to make a major acquisition? It seems a long time since I was invited by Don Still at BAA still passionate about playing my role to improve the industry I resigned from the M4i steering committee in 2004 – rather than talk about innovation I decided to put my efforts into delivering innovation and took on the delivery role for T5. For most of the 60,000 people this was a once in a lifetime opportunity. As a client we set about creating an environment where the supply chain could deliver exceptional performance. We got a lot wrong, but most of what we did was along the right lines – despite the opening we delivered on time and on budget and the quality is what you see today. In June I was asked – with many others to attend Sir John’s speech in the Commons. A bitter sweet occasion. Not a disaster, but at the same time a missed opportunity. The industry 4/10 and housing 0/10 It seems a long time since Don invited me to chair the review – CE asked me to look at ‘what has happened over the last 10 years and pointers for the future industry agenda’ There was no book on the shelf – no guidance. We did not carry the authority of a task force, no civil servants, no archivists We set about selecting a core team Zoe Le Monde – PM and Don to guide us Many people helped us in some of our work shops, and almost 1,000 gave us feedback through the questionnaire For all those I am grateful Special thanks to G4C who have been brilliant – infact inspirational in supporting and coming up with so many bright ideas that we have used in this report. David – big thank you
- Keep on Collaboration with clients and suppliers is even more important in a recession Building and maintaining relationships is more important than ever, especially in preparing us to take a bigger slice of the action when the recovery comes Compete on a superior understanding of what is value to the customer Keep good teams together to avoid them being irreparably damaged We cant cut training or strategic marketing as these will be our lifeblood when the recovery comes Work with suppliers to understand cost, drive out waste and therefore reduce price without harming value or profit We need to keep a focus on more sustainable products and ways of working as our clients will still expect improvement Turn back We are only worried about the next 12 months so collaboration doesnt matter Lowest price tendering will do fine for now, the short-term is all we are worried about Clients wont care about value, only lowest price, so we dont need to either We dont need to keep teams together, whoever gives us the lowest price will do fine We take a sharp pencil to all our costs, they are all just overheads Suppliers will be desperate for work so we can drive a hard bargain on the price We can forget about all sustainability issues and other new-fangled ideas, no-one will care about these in a recession