Delivered to the Feb 2010 meeting of the Major Projects Association

1. THE POTENTIAL OF BUSINESS
EXCELLENCE IN DEVELOPING AN
INNOVATIVE APPROACH: the logistics of
innovation
Mark Brown
Halcrow
1

2. Contents
• Exploration of innovation
• The feedback loop
• Business excellence
• Case studies
• Conclusions

3. Innovation: it isn’t just…
• … the R&D department
• …new technology
• …a discrete outcome

4. Innovation: it can…
• …embrace the whole
organisation
• …the whole work-force
• …be continuous
…but be challenging to sustain…

5. Process prevents innovation being a one-off ‘bonus’

6. Process embeds
innovation across
the whole
organisation
Source: Think for
A change, LLC, 2008

7. Linear approach to meeting market need
Problem/
opportunity
strategy objectives approach delivery outcome
Market
need
…if we keep on doing what we’ve always done, we
will keep on generating the same outcomes…

8. Iterative approach: the innovation loop
Problem/
opportunity
strategy objectives approach delivery outcome
Market change Learning &
need innovation
assess review
Double loop
learning

9. Nothing new under the sun!
MANAGEMENT BY OBJECTIVES
Problem/
opportunity PLAN DO REVIEW
strategy objectives approach delivery outcome
Market change Learning &
need innovation
assess review
HARD SYSTEMS ENGINEERING
BUSINESS EXCELLENCE

10. The fundamental concepts of business
excellence
Leadership
Results and constancy People
orientation of purpose development
and
Corporate involvement
social Continuous
responsibility learning, Management
improvement by processes
Customer feedback and innovation and facts
Staff feedback Customer Partnership
focus development

11. EFQM Business Excellence Model
Enablers 50% Results 50%
People People
Results
Policy & Customer Key
Leadership Processes Performance
Strategy Results
Results
Partnership Society
& Resources Results
Innovation & Learning

12. Drivers of innovation
Responsive to
Staff feedback
stakeholders
Alignment of organisation Customer feedback
To strategy Process
improvement
Enablers 50% Results 50%
People People
Results
9% 9%
Key
Leadership Policy & Processes Customer Performance
Strategy Results Results
10% 14%
8% 20% 15%
Partnership Society
& Resources Results
9% 6%
Innovation & Learning
Assessment & review
Alignment
feedback loop
of partners

13. RADAR Logic
RADAR Logic is applied to all ‘enablers’ to:
• Determine the Results aimed for as
part of its policy and strategy making
process
• Plan and develop an integrated set of
sound Approaches to deliver the
results Continuous
learning,
• Deploy the approaches in a systematic improvement
way to ensure full implementation and
innovation
• Assess and Review the approaches,
comparing outputs against
expectations and amending approach
where required
A focus on results along with assessment
and review of outputs against these
drives the feedback process

14. Ingredients for continuous improvement &
excellence
• Strategic leadership & direction…to drive change
• Creating strategic linkages across organisation
• Clarity on objectives
• An ability & desire to review progress
• Willingness to change if objectives are not being
achieved

15. Case studies
• Leadership and people
• People engagement & recognition
• Aligning partners through procurement
• Process improvement

16. Leadership & Innovation: Astute class
submarine development
• Context: program behind time and over-budget - ‘monster
of the deep wreaks havoc’ - threat to remainder of
programme. Concluded whole workforce must be engaged
in turn-around
• Goals: 20-30% reduction in costs/boat – change in project
culture
Source: Murray Easton, World Quality Day, Sellafield, November 2009

17. Leadership, teamwork, engagement
• Approach: strong focus on employee engagement and
teamwork: Behaviours (sickness, motivation, reward);
recruitment; coaching; open to challenge;
communication;
• Outcome: employee satisfaction 39% to 80%; absence
down by 66%; costs reduced; program returned to
timetable and continued

18. Excellence & Innovation: staff recognition
and feedback
• Context: We thought our staff were happy,
but…Halcrow staff survey showed poor results for
‘feedback’ &‘recognition’ (10 points lower than any
other measure) 2004-7
• Goals: engaged and motivated staff; need to raise BEM
score Sample of staff survey results
2000 2002 2004
Job Clarity 74 75 75
Client Focus 71 74 76
Competence 73 74 76
Feedback 45 58 58
Recognition 54 62 63

19. Excellence & Innovation: staff recognition
• Approach: introduction of monthly ‘gold’, ‘silver’ &
‘bronze’ awards (cash + certificate); line managers to
nominate staff; target set for no. awards to be given
per month
• Outcome: 2008 ‘recognition & feedback’ score
increases by 8 points…improvement sustained in 2009
Recognition score: Staff Survey
72
70
68
66
Score
64
62
60
58
2004 2006 2007 2008
Year

20. Excellence & Innovation: aligning partners
through procurement
• Context: how to align supply chain to your goals (eg:
best value in government) and evaluate complex
tenders?
• Goals: auditable tender process; value for money
• Approach: Highways Agency; DfT Rail; TfL all applied
EFQM ‘Radar’ to structure bidders’ tender documents
• Outcome: alignment of supply chain to client goals;
auditable bid appraisal; measureable value for money;
many suppliers now using BEM themselves

21. Excellence & Innovation: process improvement
• Context: Spanish textile company, Inditex, facing growing
global competition; major threat to domestic based
industry
• Analysis of competitive environment rejected low cost
models of others: instead, focus on time
• Goals: ‘adapt offer to customer desires in shortest
possible time’

22. Excellence & Innovation: process
improvement
• Approach: introduction of high degree of vertical
integration with closer links between design, manufacture
& retail by systematic feedback of trend data from stores
to designers
• Outcome: Turnaround time from ‘detection’ of a trend to
design-on-shelves down to 15 days; Spanish manufacturing
base maintained; growth to 2000 outlets in 52 countries

23. Excellence & continuous improvement
Business excellence winners and control group
Average % change in performance measures
140%
120%
100% Award winners
80% Control Group
60%
40%
20%
0%
>Twice
>Twice
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24. CONCLUSIONS
• Innovation is more usefully viewed as a process (verb)
rather than an event
• Successful firms innovate continuously across the full
range of their activities
• Innovation is driven by the feedback loop
• Frameworks exist to hard-wire innovation into firms (&
projects) eg: business excellence
• Firms which apply business excellence techniques are
more successful, partly because they are more innovative

25. Thank-you
‘I’d be happy to give you innovative
thinking…..what are the guidelines?’