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

1. Governance
and
Collaborative working

2. Welcome and introductions – Martin Samphire
 Welcome
 Arrangements and venue information
 APM- SIG role and development
 Why are we here?

3. APM booklet “Co-directing change”
“There is an increasing number of multi-owned projects as
businesses and other organisations seek to capitalise on their
complementary skills and resources whilst diluting risk exposure.
This guide allows Company Director’s and leaders to question
how well its shared projects are governed, and therefore the risk
exposure controlled. “
Institute of Collaborative working
“Delivery of projects through collaborative working is more than just
agreeing a set of objectives, and BS11000 on Collaborative working
provides guidance on the mechanics, but not necessarily on the
specifics of a governance structure “

4. Co-directing change booklet

5. Co-directing change booklet

6. APM – Governance Specific Interest Group
 Update of the “Co-directing change booklet”
 Production of a “White paper” in light of experiences

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. 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. Peter Hansford
Government Chief Construction Adviser

10. APM Master Class
Keynote Address Tuesday 21 May 2013
Peter Hansford
--Government Chief
Construction Adviser

11. Government Chief Construction Adviser

12. Government Construction Strategy
• …to reduce the cost of
Government
construction projects
by 15-20% by the end
of this Parliament.
• Targeting £2bn over 4
years

13. Infrastructure Cost Review
• …to identify savings of
15-20% in the cost of
UK infrastructure
projects.
• Worth £2.7bn p.a.

14. BIM – What is it?

15. BIM – Supply Chain Collaboration

16. New Engineering Contract

17. Industrial Strategy for Construction
A shared long-term vision for the Construction
Industry
• Developed for business; created with business
• Full support from across Government
• Action orientated and focused on delivery
• Complementing existing commitments - not reinventing
the wheel
Setting out where we want to be in 2025

18. Industrial Strategy work streams
Innovation
2025
Industrial Strategy
– providing a vision for…
Ongoing Work
Streams
Government
Construction
Strategy
BIM Strategy
Green
Construction
Board
Infrastructure
Cost Review
Overseas
Trade
Additional
Work Streams
Skills / Capacity
SMEs
Supply Chain
Access to
Finance
Whole Life
Value
Image
Exports

19. • Construction will support
sustained growth across the
economy
• Operating in a safe and healthy
manner
• Attracting the best talent and
encouraging innovation
• Equipped with the right skills
• Ready to capitalise on the vast
opportunities for global trade
Vision
Construction
Industry in
2025
Transport
Housing
Energy
Digital
Infrastructure
Water
Commercial
Property
Vision

20. BIM
Green
Off-Site
Manufacture
Clear Career
Pathways
Focus on
Health
Pipeline
Global
Trade
Emerging Themes (1)

21. Procurement
RMI
Culture &
Behaviours
Capability &
Capacity
Image
Innovation
Access to
Finance &
Payment
Emerging Themes (2)

22. Thank you

23. Benefits of Organisations Working Together
Mark Sewell - ICW

24. Benefits of Organisations
Working 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. Background - Mark Sewell
 Brighton Marina, Thames Barrier, Cairo
Wastewater scheme & Immersed Tube
Tunnels
 Last 25yrs with Balfour Beatty – across
infrastructure sectors
 Major collaborative programmes – HA ECI,
MoD Prime, BAA Complex Integrator, ODA
Olympic Park, Network Rail & Connect Plus
M25
 Business development, forming
relationships, tendering and project
mobilisations (collaborative)
 Last 2yrs taking Balfour Beatty PLC through
the BS11000 Collaborative Business
Relationships certification process

26. Objective – Collaborative Business Relationships
‘To help stimulate your
thoughts’………3 Questions to ask
yourself:-
 How is it that some collaborative projects
perform better than others?
 What are the contributors and inhibitors to
successful collaborative projects?
 How do we learn from our experience and
translate this into best practice?

27. Successful Collaborative Relationships
What does ‘best practice’ look like?
Co-directing Change
BS11000

28. Successful Collaborative Relationships
Common 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 development
Overall - A ‘Best for Project’ approach

29. Case Studies to illustrate themes
(and a question for thought)

30. Alignment of Project Objectives –
Finsbury Park to Alexander Palace
£40m Overall Budget
£20m Lump Sum
Fixed Price
Joint alignment
workshops
NR Contingencies:
Works Trains, materials supply
Compensation TOC’s FOC’s
Possession costs etc.
Lump Sum
Fixed Price
Target Cost
Pain & Gain
Intermediate
Target Cost
Q – What forms of contract arrangements encourage collaboration?

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 what
they are there to achieve, aligned to a
common direction
Recognised by HA as model process

32. Joint Risk Management – NWGA
Contractor
Risk
Client
Contingency
Contractor
Risk
Shared
Risk
Client
Contingency
Joint Proactive
And Reactive
Mitigation
=
No transferred risk
No transferred risk
Shared Risk Principle
Q – Do we ask our partners and suppliers to take on unrealistic risk?

33. Contract Conditions – ODA Aquatics Centre
 After PQ ODA sent out a
framework contract and
engaged in 3 months of
competitive dialogue with
tenderers
 Bidders conditions were
customised
Q – How do we engage with our partners and suppliers on a best value basis?
ODA recognised that on complex multi-
disciplinary projects with many
stakeholders circumstances will change
ODA Objective – to enable bidders to
deliver best value to ODA

34. Issue Resolution – A3 Hindhead
Q – How do we encourage the early identification of potential issues?
Case Study:
•High Profile public infrastructure project
•High Multi Stakeholder & community interest
•Complex technical construction
Solution:
•Detailed Stakeholder mapping and engagement
•Early identification of potential issues - reward
•Detailed contingency planning and mitigation
Learning's
• 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 and
issue resolution process.
This required a cultural change in approach supported by behavioural development

35. Value Creation – Terminal 2B
Q – How do we create a culture to support innovation and value creation?

36. To support successful Collaboration
We all (Clients, Partners, Sub-contractors & Suppliers) need to do
more 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. Question and answer session

38. Discussion group guidance
 On-going discussion
 Feedback
 Outputs

39. Andy Murray –
APM Governance specific interest group

40. Introducing APM Governance SIG
#APMGovernance
@APMGovernance
www.apm.org.uk/group/apm-governance-specific-interest-group

41. APM mission
Working collaboratively, create new standards and
knowledge and enhance their application amongst
individuals and organisations, such that all projects
succeed.
41

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 excellence
42
….in the governance of project management (change)

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 standards
43

44. OECD IOD Independent
Commission on Good
Governance in Public
Services
Corporate Governance definitions
Corporate governance
involves a set of relationships
between a company’s
management, its board, its
shareholders and other
stakeholders.
Corporate governance also
provides the structure through
which the objectives of the
company are set, and the
means of attaining those
objectives and monitoring
performance are determined.
A governance framework
should ensure that corporate
boards effectively monitor
managerial performance and
achieve an equitable return
for shareholders – reinforcing
the values of fairness,
transparency, accountability
and responsibility.
The function of governance is
to ensure that an organisation
or partnership fulfils its overall
purpose, achieves its intended
outcomes for citizens and
service users, and operates in
an effective, efficient and
ethical manner.

45. Project Management Governance – APM
The governance of project management concerns
those areas of corporate governance that are
specifically related to project activities.
Effective governance of project management ensures
that an organization’s project portfolio is aligned to
the organization’s objectives, is delivered efficiently,
and is sustainable.
Governance of project management also supports the
means by which the board and other major project
stakeholders exchange timely, relevant and reliable
information.
PM Governance definitions
Project Governance
- ISO 21500
Governance is the
framework by which an
organization is directed
and controlled. Project
governance includes
but is not limited to
those areas of
organizational
governance that are
specifically related to
project activities.
45

46. 46
Change in context
Portfolio Mgmt –
Definition &
Monitoring
Operational
Planning & Mgmt
Programme and Project
Mgmt of authorised
P&Ps
Operational Mgmt
of on-going operations
(BAU)
Organisational and External Resources delivering tasks
Vision
Portfolio Management
“Doing the right
projects”
Programme & Project
Management
“Doing the projects
right”
Focusonon-going
serviceand
performance
Focusonchange
46

47. Project Governance and GoPM
Project/Programme Level Organisational Level
Project board regularly chaired by a sponsor Individuals stay in sponsor role throughout each project
lifecycle
Governance structure for a project defined Sponsors are accredited and accountable
Progress reporting for a project is accurate and timely Projects report against a common template. Exception
reports available at executive level
There is a coherent project plan Projects are prioritised in line with strategic objectives
Project stakeholders are involved in the direction of a
project
The board directs the change agenda
There is an integrated assurance and approvals plan
for a project
The board has oversight of the gate review programme
– individual executives are intimately involved in
reviews
The project management team is competent and fully
resourced
All project players are trained, assessed against a
competency framework, accredited? Capacity is
balanced against demand
47

48. Board
Governance isn’t just what the project board
does!
CEO
Directors
NED
Portfolio
Mgrs
Programme
Mgrs
Project
Mgrs
Sponsors
Functional
Mgrs
Suppliers
Partners
Stakeholders
Assurance
Mgrs
Risk
Mgrs
They all need to be competent in their change role
48

49. Directing Change
2nd
edition 2011
49
Co-Directing Change
2007
Sponsoring Change
2009
Free to APM members at www.apm.org.uk/memberdownloads
GovSIG – Publications to date

50. Directing Change from APM
1. Portfolio direction
2. Sponsorship
3. PM Capability
4. Disclosure and reporting
50

51. Co-directing Change - Components
1.Alignment
2.Owning-organisation sponsorship
3.Project management
4.Disclosure and reporting
5.Reward and risk
6.Joining & leaving

52. Co-directing Change - Principles
P1. Formal arrangements
There should be formally agreed governance
arrangements.
P2. Unified decision making
There should be a single point of decision making for the
project.
P3. Unambiguous project representation
There should be a clear and unambiguous allocation of
authority for representing the project in contacts with
owners, stakeholders and third parties.
P4. Business case
The project business case should include agreed, and
current, definitions of project objectives, the role of each
owner, their incentives, inputs, authority and
responsibilities.
P5. Governance compatibility
Each owner should assure itself that the legal competence
and obligations, and internal governance arrangements of
co-owners, are compatible with its acceptable standards of
governance for the project.
P6. Authorisation points
There should be project authorisation points and limiting
constraints to give owners the necessary degree of control
over the project.
P7. Risk and reward apportionment
There should be agreed recognition and allocation or sharing of rewards and
risks, taking account of ability to influence the outcome and creating incentives to
foster co-operative behavior.
P8. Efficiency
Project leadership should exploit synergies arising from multi-ownership and
should actively manage potential sources of conflict or inefficiency.
P9. Participation change
There should be a formal agreement that defines the process to be invoked and
the consequences for assets and owners when a material change of ownership is
considered.
P10. Reporting
Reporting during both the project and the realization of benefits should provide
honest, timely, realistic and relevant data on progress, achievements, forecasts
and risks to the extent required for good governance by owners.
P11. Independent review
There should be a mechanism in place to invoke independent review or scrutiny
when it is in the legitimate interests of one or more of the project owners.
12. Resolution of conflict
There should be a dispute resolution process agreed between owners that does
not endanger the achievement of project objective.

53. Benefits of adopting a formal approach
 Optimise your portfolio of projects
 Avoid many of the common failures in project and
programme 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 applied
across the projects managed in your organisation 53

54. Future APM GovSIG events
 12th
June – Updating Co-directing Change
 10th
July – A Tale of Two Programmes

55. Thank You
The 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-group
Any questions?
55

56. Summary and closing remarks