Stronger, faster, more responsive
How agility helps programmes excel in the face of uncertainty
This article was originally published in 360°view.
Size and complexity should not get in the way of responsiveness. The best-run capital programmes are set up to allow agility in their delivery model.
It’s a paradox of major programmes – they require a large, well-structured organisation to deliver them, but also flexibility to respond to change. Long delivery timeframes and the backdrop of a fast-changing world mean that major programmes inevitably face constant challenges, and their success is often judged by how quickly they adapt to uncertainty.
Such high-value capital investments tend to produce a highly process-driven and risk-averse approach, which can lead to an organisation being slow-moving and bureaucratic.
Resolving the inherent tension between reliable, consistent delivery and flexibility is vital. Yet even the largest programmes can be nimble, but only if delivery models are set up for agility and flexibility can be unlocked.
More than speed
On a superficial level, agility is the power to move quickly and make fast, focused decisions.
But it’s about more than just pace: as the management consultancy, McKinsey outlines, truly agile organisations are both stable and dynamic, combining a steadfast core of unchanging governance structures with adaptive elements. [1]
No matter how well planned a capital programme is, the delivery phase will always throw up many challenges. The degree to which these are anticipated and ability to respond is crucial to success.
From lag to lead
Central to this agility is a comprehensive understanding of the programme’s status and health. Traditionally, programme managers have relied on quantitative, or ‘lag’ indicators to reveal status – KPIs such as cost to date, hours worked and so on. But these are costly to collect and time-consuming to process.
Technology-led automation and big data are set to be game-changers. For example, the use of field sensors on everything from construction workers to materials will both automate data collection and exponentially increase the amount of information collected.
The higher the risk, the more checks and balances, or ‘hold points’, should be built into the process.”
However, such technology doesn’t alter a fundamental principle of good information management – information needs to be captured and structured in a way to answer the key questions and decisions the programme leadership will face.
In other words, it’s essential to identify what data will be gathered, and what will be gleaned from it, before the programme starts. Big data magnifies one important risk – a programme manager who asks the wrong questions may be left drowning in the wrong data.
More recently, the focus has shifted to qualitative, or ‘lead’ indicators such as the readiness of the supply chain for the next phase and the quality of systems and processes. These give a far better indication of the health of the project and future performance.
The most successful major programmes will capture and harness crucial data through a performance assurance framework. For details of the approach adopted by Europe’s largest infrastructure project, Crossrail, see the box below.
Improvement in supply chain performance
Crossrail is the biggest construction programme in Europe – at peak construction more than 10,000 people were working at over 40 construction sites across London. A public sector-funded programme of such scale needs to provide assurance to many bodies in relation to governance and the effectiveness of delivery.
A key challenge for Crossrail and its stakeholders was to create a mechanism for assuring that Tier 1 contractors were collectively performing at a level that would enable the programme’s objectives to be met, despite the backdrop of changing economic conditions or industry issues such as the availability of labour.
These include safely delivering a world-class railway on time and on budget, setting a new standard for major project delivery, and leaving a legacy of improved supply chain performance within the infrastructure sector.
Turner & Townsend, working as part of programme partner organisation Transcend, designed and implemented a performance assurance framework which spanned six core areas, and used a detailed suite of lead and lag indicators to produce a highly accurate, objective picture of supply chain performance.
That picture allowed the intelligent management of the programme, stimulated innovation, and improved collaboration and best practice sharing across the supply chain.
It also enabled Crossrail’s management team to operate a lean client team and adopt an agile approach to working with the supply chain. The process provided a platform which underpinned a 48 percent increase in the average performance level over a four-year period.
Taking a probabilistic approach
Lag indicators are good at showing how a programme got to where it is. Lead indicators are of more value as they can show where it will end up and allow the programme manager to predict the outcome as a range of potential scenarios, from a continuation of the status quo to negative (and positive) events.
Over-reliance on lag indicators will lead an organisation to have a limited, or deterministic, grasp of what the future may hold.
Yet world-class programme management, underpinned by lead indicators, will adopt a probabilistic approach that produces a broad range of forecasts, and more accurately quantifies risk. The greater certainty this provides allows the client to both understand and embrace risk, and is essential to agility.
Delegation and decision-making
If robust controls and accurate forecasting are a prerequisite for agility, its expression is effective decision-making. Failure to delegate the right decisions can lead to bottlenecks and paralysis. Ironically, this is a serious risk that highly risk-averse organisations can bring on themselves.
The degree to which decisions are delegated should match the level of risk involved. The higher the risk, the more checks and balances, or ‘hold points’, should be built into the process.
However there is a balance to be struck when designing controls and assurance, and agile programmes do not take a ‘one size fits all’ approach.
In times of economic volatility, political uncertainty and programme specific pressures, the challenge is greatest when there is a temptation to build in additional layers of bureaucracy that can lead to unnecessary slowness.
Approaches such as lean can be particularly useful when creating an agile business. Lean focuses on providing value by establishing a disciplined, streamlined and efficient organisation. It tiers the level of project governance and decision making according to risk, which is a powerful way of striking the balance between speed and resilience.
The higher the risk, the more checks and balances, or 'hold points', should be built into the process."
Forget firefighting – better to prevent the fire in the first place
Some programme managers relish the role of heroic ‘firefighter’ tackling individual issues as they arise, but remain blind to the big picture. Others are so obsessed with the plan that they become blinkered and unable to adapt to events.
Both approaches aren’t agile and won’t perform as well as a programme that combines intense planning with sophisticated assurance, probabilistic forecasting and correctly devolved decision-making.
All of these are vital elements, which together enable the programme’s key decision-makers to make the right judgement call at the right time.
Armed with this, and a lean, devolved governance process, agile organisations will combine a resilient, efficient core structure with the ability to react quickly to events on the ground.
They are not just unafraid of risk, but anticipate and embrace it as a source of opportunity. This is why setting up a programme for success requires not just a sound delivery plan, but the right foundations in place to enable agility to happen.
