01.05.15
If you do not like change, you are going to hate extinction…
Source: RTM Apr/May 15
Chris Williams-Lilley, founder and managing director of Leadership Champions, formerly Rail Champions, says the bidding landscape has changed for major infrastructure companies, with SMEs playing more than just a supporting role to tier 1 contractors.
At the recent CompeteFor: Supply Chain Summit, I gave a keynote on the hidden benefits of collaboration. The single message that connected with Infrastructure-UK, Thames Tideway, Laing O’Rourke, Kier and Balfour Beatty, was the need to be innovative.
First of all, if you are bidding or working on large-scale public sector infrastructure projects in either the rail or highways sector, you know how the landscape has changed. Some big names from the construction industry have failed to reinvent themselves, becoming complacent with past performance; the net result was liquidation of the company, loss of jobs and negative impacts on the resultant supply chain.
Let’s explore together some ideas that will help you connect the dots on future bids, create value and learn from my experiences. My message here is: you may have better ideas than I do, but the focus is not on perfection, but success.
Our reach into client organisations and their supply chains helps us understand both commercial and technical aspects of procurement and programme delivery. As suppliers, we need to know how to create products and services that customers want. However, first, we need to understand our clients’ biggest challenges.
Market intelligence
With as much as 80% of work subcontracted by the (tier 1) principal contractor, it is imperative your organisation knows how to engage with the supply chain, understand mutual dependency, connect to buyers and tender for profitable repeatable growth. Do you see partnering as a way forward? Does everyone in your organisation understand your vision, mission and objectives for the next 12 months? Do you understand why some collaborative relationships fail?
Our approach is based upon three fundamental principles.
- Performance linkage (the what, where, when and how)
- Honest conversations (having a culture of openness and principal based values)
- Focus on action (working only on high-value initiatives, which drive triple bottom-line growth)
Over the past four years, BS 11000 (Collaborative Business Relationships) has had a profound effect on the rail industry.
It has helped save money and build shared purpose in the supply chain – something the humble quantity surveyor should embrace.
Fundamentally, it has shown how important culture and values are in the organisation. If you have a large workforce, many of whom are CIS (contractors under the Construction Industry Scheme) and not PAYE (pay-as-you-earn employees), it may be hard to implement a culture change, or tackle the skills challenge, as the team improves project-by-project. Perhaps this is something you have experienced yourself. So take my advice: measure the level of collaboration in your organisation. Look at core competencies. Value insights from your people. Prepare for change, as failure to embrace the new world of opportunities will lead to your extinction – like the dinosaurs.
New models of construction procurement
Through our VIP Round Table Sessions, we are working with many client organisations. The words they use are not just window dressing; they are showing greater client leadership and a move towards alliance partnerships. This is, in some ways, a response to the New Models of Construction Procurement published by the government last year.
An earlier report, the Government Construction Task Group report of 2012, highlighted very real challenges in construction procurement. Addressing these, the Government Construction Strategy set out an explicit commitment to trialling new models of procurement that include principles of early supplier engagement, transparency of cost, integrated team working and collaborative working. The models are therefore entirely consistent with the ambitions of the Industrial Strategy for Construction. Case studies of the trial projects show how these models have been used efficiently, while achieving other benefits. Guess what? Innovation and collaboration feature highly.
Knowing this, you can then focus on your customer’s project or programme objectives. You can then align your vision, mission and values to establish your own supply chain governance, set strategic goals and identify areas for improvement. Taking it one step further, you can perhaps work with trusted supply chain partners on PQQs (pre-qualification questionnaires) or ITTs (invitations to tender), to develop ‘win themes’ and find better, more efficient ways of working. We do this all the time, facilitating SMEs’ supply chain workshops, focusing on value creation, risk management and cost certainty. However, if cost is the primary goal, then the environment is not right for collaborative working.
Customer management
If you are a leader of a team, you have a responsibility to help people focus on what is most important. You need to understand how your customers buy – and when. You should always quantify their needs and go beyond products and services to succeed and create lasting value.
Let me share a story with you. Our Customer Management Scorecard was developed for a major tier 3 client. They were suffering from bid overload. We listened to the board, spoke with their people, and challenged the way they were thinking. If they wanted to access higher value projects, they just needed to align their strategy with partners who valued their input, and not be distracted on low-cost, high-volume bids. Taking stock of their growth strategy, putting priority onto partnering helped influence (not impose) a change of mindset. We helped the proposal sales team focus on making their customers more successful. For me, this was true customer management. Today, 12 months later, they are working on large road and rail frameworks. Yes, the business model has shifted, but so too has their productivity and client focus. They have a clear path forward, deliberately concentrated on innovative ideas which yield bottom line results.
Why some partnerships fail
Too many collaborations collapse when projects go commercial. However, many issues can be resolved or avoided when the environment and behaviours are based on the timeless principles of BS 11000. If you see an email footer or website expounding values – if the organisation lives by these values 80% of the time – they are deemed to be authentic. You cannot publish a list of values and expect them to transform the way you work. It takes time and no small amount of effort to change.
Listen to your inner voice next time you are in a meeting, and take note if the organisation is founded on high-trust principles. With business and personal relationships, we all benefit from talking straight and following through with our actions. The opposite creates friction and distrust, which often leads to conflict and loss of respect.
Avoid extinction
A greater appreciation of what your customer is looking for will help you make better decisions. Avoid wasting time on things that don’t add value or act as a distraction on your projects. Capture best practice, and learn from your experiences.
After reading this article, I hope you will think about how you can add value to your client relationships; it will help you outmanoeuvre your nearest competitors. It is not always cost. It could be about the hidden benefits of collaboration with the customer or the supply chain. Having worked with many client organisations on supply chain engagement, it is becoming the ‘way we do business around here’.
The CompeteFor: Supply Chain Summit was all about horizon scanning. What can your organisation do to access some of the biggest contracts in the UK? I hope you can now visualise alignment in your business, make better choices and build deeper client relationships.
The future of public sector frameworks is built on radical transparency. It will help you build trusted partnerships and transform employee engagement. If you can capture the actual benefit of your business, you will be able to improve systems and processes. Make a conscious effort to move towards a high-reliability organisation, and I know you’ll prosper in 2015 and beyond.
Summary
Success does not just happen by accident. Partnering may not be the best model for you, but you have to be equipped for the future. Spend time getting to know your customers and develop sustainable supply chain partners. Understand where you can add value (at every opportunity), how you fit into the supply chain and how to avoid ‘low trust behaviours’.
If you have trouble identifying your starting points, we can help. It is all about making informed choices, taking decisive action to influence change, with a focus on smart solutions that create lasting value for your stakeholders.
Remember the story earlier about a conveyor belt of bids? Spend your time wisely. Be strategic and start to analyse why your customers value your ideas more than your competitors. Good luck.
Tell us what you think – have your say below or email [email protected]