ICPM White Paper
Dr Harvey Maylor and Dr Mark Johnson
Executive Summary
We live in a world of increasingly complex outsourced programmes. They are vital to the
success of organisations from governments to corporations, yet many fail to deliver. Much of
the analysis of failed outsourced programmes has focused on the delivery side of the
relationship despite increasing evidence that much of the blame for failure is with the client.
We firstly identify 10 client behaviours – and provide illustrative cases – that are prevalent in
failed and failing programmes. Reversing each of these behaviours is required for success.
Moreover, a prerequisite for this is a higher level of conception of the work being carried out.
We note that this represents a move from project-based to programme-based thinking. This
change in conception and the accompanying behaviours will enable client organisations to
understand how to become a better client, what we have termed an "Intelligent Client".
Keywords: Intelligent client, client behaviours, major programmes, conception level.
DRAFT 1.1
July 2009
There has to be a better way...
The Times reported, in 2009, that: “A Ministry of Justice IT project that is three years overdue
and double its original cost has been condemned as a masterclass of sloppy government
management" (Times, 2009). If we change the names of the people involved, the industry
(construction rather than IT, for instance), sector or nation, would we see a different result?
There is plenty of evidence that the management of complex outsourced programmes is
problematic. The US Government Accountability Office recently reported: “In 2008, the
cumulative cost growth in the Department of Defense’s portfolio of 96 major defense
acquisition programs was $296Bn, and the average delay in delivering promised capabilities to
the warfighter was 22 months.” (Sullivan, 2009)
Such endeavours are complex due to their scale, the number of interrelated stakeholders and
the dynamic nature of the environment. They are also usually outsourced – adding an
additional layer of complexity to their management. In responding to this complexity, they are
now considered programmes rather than large projects. It is the role of programme
management to gain benefits from managing all the multiple projects that make up a
programme that would not be obtained by them being managed individually (OGC, 2008). In
the IT sector for instance, it has long been recognised that rather than simply putting in a new
computer system, a provider is participating in IT-enabled business change (Benjamin &
Levinson, 1993). That change takes place through a programme, involving business process
redesign, hardware and software integration, training and support, as well as helping the end
users to deal with the changes to their working lives. The computer on the desk is not the
requirement – the addition of an effective capability is. However, we will demonstrate that
despite this recognition of the role of the programme, many of the approaches being used
today in procuring programmes of work, are reminiscent of project-based approaches.
Press reports on failed programmes (prior to this latest case), the management literature and
published guidance have focused on the delivery side of the client-provider dyad, assuming
this is where the cause of failure has lain. The report on the Ministry of Justice (MoJ) IT
programme is notable for its criticism, not of the providers, but of the government department
that ran it – the client. Specific criticisms include poor governance, under-resourcing, lack of
basic controls, the lack of wider business change to support the system, and management of
the suppliers (NAO, 2009).
The purpose of this paper is to identify common behaviours in the management of failed major
outsourced programmes. These provide a concise statement of current approaches that are
ineffective. We show that these are common approaches that have been derived from project
outsourcing. More than this, though, by turning those negatives to positives, we show how the
delivery of successful programmes requires particular behaviours from both client and
provider. Focusing on the client, behaviours are identified that together form what we term
"intelligent client"1 behaviours. Evidence from a number of sectors suggests that these will be
more effective in achieving successful outsourced programme delivery than those witnessed in
the case of the MoJ. We begin by listing ten behaviours prevalent in failed major programmes.
1
We first noted this term in NAO (2006), Delivering Benefits Through IT-enabled Change.
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Table 1: Ten behaviours common to failed major programmes
1
We are "partnering", of course, with our suppliers. This means I tell them
what to do and kick them when they don’t deliver, meaning that any
failure is their fault and not mine. Result!
2
Stay local – localised protection of my interests works. I am the
customer, the impact of my decisions on the supply chain is not my
concern and making unreasonable demands is just part of my role.
3
There is no need for up-front investment. Trials and testing should be
funded out of the contractors’ profits, not the programme budget. You
should know what I want anyway (even if I don’t).
4
Outsource anything REALLY difficult and seek to build internal and
external buffers between you and the potential for you to be blamed for
anything that might go wrong. This is particularly effective when trying to
work between a number of government agencies. It makes sense that
they are more likely to fall in behind a (politically neutral) contractor than
your own organisation.
5
Over-optimism never hurt anyone. Believe all the plans you see,
especially if they are printed out in colour or have flashy presentations.
Never, ever involve yourself in the detail and remember: function always
follows form.
6
It’s all about following the process – everything would be fine if "they" did
that. Also, if the current process isn't working, just add more processes…
7
Watch the indicators closely and as long as they are OK, don’t worry that
you are measuring completely the wrong things or that people are
responding to the measures in bizarre ways.
8
Don’t worry about managing up. Being blown with the latest political wind
is a fact of life. So what if we waste vast amounts of public money on a
whim? It’s all about keeping the politicians happy.
9
Programmes are an expression of a personal agenda. Killing a
programme invalidates that agenda and is an admission of personal
failure. Don’t worry about the implications of delays on other
programmes.
10
Programmes are about doing not learning. The time for reflection is after
the programme has finished.
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Behaviour 1: "Like partnering, but with teeth"
Various studies in the 1990s (e.g. Dyer, Cho & Chu, 1998) showed that the largest Japanese
automotive assemblers such as Toyota and Nissan worked closely with their suppliers unlike
their western competitors. Western automakers such as Ford, GM and Chrysler relied upon
relationships that were predominantly adversarial while the Japanese used these relationships
as a central pillar of their competitive strength. The term partnership is now extensively used
to describe the relationship between buyers and suppliers in a range of industries, not just the
automotive sector where the concept was originally developed and studied. However, when
transferring the strategies of the original Japanese automotive companies into other cultures
and contexts, some of the vital prerequisites get lost. Current "partnering" approaches within
major programmes still retain the primacy of the contract and recourse to legal action when
outcomes are not forthcoming. For instance, the much lauded Copenhagen Metro opened in
2002, but seven years after completion, was still mired in legal claims and counter-claims
between the contractors and client.
One approach to working with contractors was recently presented by a department of the UK
government. They described it as "like partnering, but with teeth". It was clear that there is
little sense of a mutually beneficial and interdependent relationship between client and
provider despite there being ongoing calls for more "relational" contracts by academics from
the 1960s onwards (Macneil, 1980) and their considerable successes (e.g. Gil, 2009). A major
construction contractor on receiving notification of a "partnership contract" recently told one of
us that: “I know they're going to use this to shaft us, I just haven’t worked out how yet". He
did work it out eventually but that didn’t prevent that company sustaining heavy losses on the
work. There is little evidence, even in a suppliers’ market (as existed for some time in
construction in many areas of Europe), of clients seeking to become the client of choice.
Maintaining an incentive for suppliers to compete for work is essential to a healthy supply
base.
Other characteristics of the original automotive benchmarks include long-term rather than
transactional arrangements (allowing the provider to carry out long-term planning gives them
a stake in the future rather than just short-term success), cross-ownership (Keiretsu) and a
detailed knowledge and involvement in the supply chain. For example Toyota and Nissan
regularly station engineers within the lower tiers of their supply chain to facilitate problem
solving (Liker & Choi, 2004). Also, when Toyota developed the Prius, their engineers assisted
in the design and manufacture of the batteries by Canon. Toyota never wanted to make the
batteries, they wanted Canon to gain the best of their manufacturing know-how so that they
would get the best products at the best price (Liker, 2004).
The context of outsourced programme delivery is clearly different from the design and supply
of automotive components or systems. Programmes are predominantly service rather than
product delivery, and usually involve changing the organisation they are being delivered to. In
addition, thinking of programmes as "non-repetitive processes" may contribute to the use of a
transactional rather than a partnership approach. Lastly, in Europe, Japanese-style partnership
relationships do not conform to EU government procurement regulations. Thus, UK
government procurement arrangements, including PPP / PFI, discourage buyer–supplier
partnerships as this could be construed as unethical. They are still contractually based and
have had variable rates of success (Kwak, YingYi & Ibbs, 2009).
One conclusion to be drawn from this section is that partnering, whilst originally identified as
providing benefits to all parties in the automotive sector, has not transferred well out of this
context. The approach has been limited by established practice (contract, perception of
legislation, prevalent behaviours) to the point where the term is now widely discredited. Yet it
is clear that "real partnering" (as opposed to "like partnering but with teeth") has many
potential benefits, and is a requirement of many of the changes in behaviours described in the
following sections.
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Behaviour 2: Stay local
"Stay local" represents a group of behaviours where the outsourcing organisation focuses
solely on the issues that are immediate – stakeholders, risks, opportunities and making change
are all dealt with in the manner that suits their immediate requirements. There are many
impacts of "stay local" on the performance of outsourced programme delivery. Outsourcing
brings with it the notion that the delivery becomes SEP 2 – somebody else’s problem.
Furthermore, based on current practices, it is apparently believed that risk can be outsourced
with the responsibility for delivery, pushing the risks into the supply chain.
Indeed, low level aggregation of risk has been demonstrated to be ineffective (Goldratt, 1997).
As a result, the strategic allocation of contingency in response to risks must be carried out at
the programme level, rather than locally. However, this only covers the downside of
uncertainty; some work will be completed more quickly than planned and this benefit should
be passed onto the programme. Other opportunities arise in complex programmes, and
actively managing this opportunity across the programme rather than locally, is vital.
The benchmark for good practice in this respect has been BAA (the former British Airports
Authority – owners of London Heathrow) during the construction of T5 at Heathrow (Davies,
Gann & Douglas, 2009). The phrase, BAA owns all of the risk, all of the time (BAA, 1998), was
used to describe their approach. Taking risk away from the supply chain and using pooled
benefits to encourage the exploitation of opportunities, was a departure from conventional
practice and shifted the focus from damage limitation, to a search for the best way to get the
required benefits delivered. This behaviour was a major contributor to the £4.5Bn T5
programme being delivered on time and budget.
Another aspect of "staying local" involves making unreasonable demands and changes in
demands on providers. In manufacturing, it has long been recognised that peaks and troughs
in supply profiles are costly and wasteful, hence the considerable efforts to maintain stable
demand (Forrester, 1958; Lee, Padmanabhan & Whang, 1997). In programme delivery, it
appears that this principle is ignored at will, with changes and their implication for the capacity
of the supply chain ignored. Such instability is costly and the cost is ultimately borne by the
client. BAA’s approach in the T5 programme was to realise that the procurement schedule
would create a significant market for major items (from concrete to electrical components) and
that buying these centrally would prevent contractors from having to compete with each other
for potentially scarce resources at various points in the build schedule.
"Stay local" represents a limited and insular world view that is inappropriate for complex
outsourced programmes. The current best practice examples are notable for the breadth of
their consideration beyond traditional boundaries into the networks that make a contribution to
or are impacted by the programme.
Behaviour 3: Don’t invest up-front
One of the differences between programmes and projects is the degree of clarity of the
outcome required. For projects, it would be expected that the outcome is well known, and the
route to it well understood. Project delivery processes (the UK’s PRINCE2 (OGC, 2009) for
instance) are intended for such a task. Where the focus is on a wider set of benefits (addition
of organisational capability, for instance) and there is a larger "solution space" a more adaptive
approach is required. Indeed, the exploration and definition of project possibilities is actively
excluded from both PRINCE2 and APM’s Body of Knowledge (APM 2008).
Evidence of failure due to such project-based thinking, comes from a number of sources. For
instance, lack of up-front investment was one of the causes of failure in the procurement of
2
We are indebted to Douglas Adams, author of The Hitchhiker's Guide to the Galaxy for this acronym.
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the Nimrod MRA4 by the UK’s Ministry of Defence (NAO, 2003). Scoping out the project and
exploring the realities of developing such a capability received an investment of 0.1% of the
budget. The result was that work began to develop the aircraft, following contract signing, but
with unrealistic requirements of the technology. For instance, whilst it was thought to be a
revision of an old aircraft design, the requirements resulted in an almost entirely new design,
with huge implications for cost and time.
Up-front investment of time, money and effort can narrow scope and reduce the level of
unknowns in a programme. Late changes can have extensive knock-on effects and it is these,
(as noted above) that need to be reduced. Up-front investment provides an incentive for such
consideration and issues, including future-proofing, to be included. Even though it doesn’t
change the reality that the solution has yet to emerge, it allows development of the ideas and
requirements – in short it just reflects the reality.
Up-front investment on its own though is not going to remedy major programme failure.
Where success has been achieved, it has been through establishing "real partnering" (as
originally intended rather than as currently practised) and breaking stay-local thinking.
Behaviour 4: Make it REALLY difficult
One group of factors that make programmes complex to manage is the number of
stakeholders, their interactions and level of engagement with the task. This is another area
where the differences between programmes and projects becomes apparent. Whilst it is
possible to map the benefits of a project (Ward & Daniels, 2006), aligning the benefits of a
programme for a wide group of interacting and dynamic stakeholders, is another challenge
altogether. Leaving such a job to an outsourced provider, rather than dealing with the issues
at a policy level has consistently been demonstrated to be highly challenging. The UK’s
attempt to provide an integrated IT system for the National Health Service and others are
testimony to this. There are hundreds of stakeholders – from government departments, to
area health authorities to primary care trusts, all with differing legacy systems, requirements
and incentives / disincentives for participating in the deployment of an integrated scheme.
This issue appears different from many of the others raised so far. It is not clear, other than
through policy, how to get alignment of benefits across wide stakeholder groups. An active
incentive needs to be found for stakeholders to engage in a manner necessary to ensure that
they contribute to both the solution and its delivery. Policy is one means to this end, but it
needs to be coherently deployed.
Finally, the current approaches to large-scale procurement assume that there will be a suitable
number of appropriately qualified suppliers ready and willing to bid for the work being offered.
Recent experience in the construction sector in Europe has demonstrated a reluctance on the
part of many firms to engage in the expense of bid preparation. For instance, for the
construction of the 2012 Olympics main venue there were only two bidding companies.
Outsourcing doesn’t relinquish an organisation’s responsibility for creating the context in which
successful delivery can take place. The more complex the requirement to be delivered, the
greater the risk, particularly where there is considerable organisational complexity. That risk
increases the likely costs for all concerned, but can be reduced by actively managing the
complexity of the task in the first place. The wider view on this aspect recognises the central
role of the outsourcing organisation in determining what level of complexity is outsourced.
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Behaviour 5: Over-optimism
Delivery failures present various logically possible causes. Firstly, there is the logic that the
targets set were simply unrealistic to start with – failure was assured from the beginning.
Secondly, the delivery capability may have been deficient. Whilst there may be some merit in
the second, the volume and frequency of failure in delivery (e.g. Standish group, 2009)
suggests that the first is also worth investigation. One influential study showed that the means
to get a programme / project approved was (Flyvjberg, Bruzelius & Rothengatter, 2005):
project approval = underestimated costs
+ overestimated revenues
+ undervalued environmental impacts
+ overvalued economic development effects
This demonstrated the impact of high-level optimism in the approvals process. The reality is
that this optimism results in a misplaced sense of safety (see "Stay local"). Moreover, the
over-optimism doesn’t stop at the approvals process; as will be shown in Behaviour 7, it is
pervasive. The Channel Tunnel was both late and over budget. During an advanced project
management course run by one of the authors following this debacle, two of the planners from
that programme discussed how it was generally known that the tunnel would cost double the
original budget of £5bn and take much longer than was being publicised. It was also generally
known that the true estimates were not considered to be "politically acceptable on either side
of the English Channel". In the language of organisational learning “the undiscussable was
undiscussable” (Argyris, 1993). Not only could the fact that the estimates were ridiculously
optimistic not be discussed, the organisation was not keen to even recognise that they weren’t
being discussed. The true costs and durations were known, but rather than deal with this from
the start, it was politically expedient for this to "emerge" once the work was well advanced.
This approach is still having an impact today – due to the additional levels of debt that were
built up during construction, it took 21 years from the opening of the tunnel for its owners to
declare a profit to their long-suffering shareholders.
Determining the true levels of cost and time always presents a challenge to organisations.
Systematic behavioural bias towards being over-optimistic exists at organisational, team and
individual level. Moreover, recent research has demonstrated that this bias often continues
well into the execution phase, with similar behaviours seen in reporting. It is not unusual for
progress to be reported as acceptable for some considerable period, and then for the
performance to be seen to "drop off a cliff" as the original completion date approaches.
The future for managing complex programmes lies firstly with recognising that the traditional
project-based approach to estimating is inappropriate. Over-optimism before and during the
work happens and while such behaviour is prevalent, conventional estimates are likely to be
unreliable. This compounds the effect of lack of partnering, for instance, where the rush to sign
the contract adds to the lack of up-front investment and the failure to consider wider issues in
the supply chain.
Behaviour 6: Just follow the process
From the 1980s on, industry saw a number of related, but superficially distinct, processes that
promised to cure all that ailed. These included TQM, Lean, Agile, Six Sigma and Lean Sigma.
The popularisation of "process is the answer" is a result of the application of the work of people
like Dr W Edwards Deming in Japan. Deming’s work in repetitive operations has been
formative in the quality practices seen in most major manufacturing organisations, and has
been, on the whole, very successful in transforming quality performance. Statements such as
“90% of errors are the fault of the system, not individuals” are pervasive and have
considerable resonance with most organisations. Where there are errors, fix the system and it
will work OK. This logic is highly persuasive and to an extent will work, but in programme-level
work, we need to look beyond Deming.
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Major differences between programmes and manufacturing operations include the level of
repetition and the reliance on technology for designing and pacing work. Both are high in
manufacturing. Most of Deming’s work was done where the system (e.g. the production line)
determined what was done and how it was done. Highly repetitive operations in a factory
environment are generally designed through work study, and quality assured through
statistical process control. Repetitive operations also exist at the task level in projects (e.g.
some data handling, site-level construction activities, testing chemical formulations). The
application of a manufacturing approach is useful where work packages have durations of
seconds or minutes, and the process or system for work to be carried out can be so designed.
However, reliance on "one-size-fits-all" processes may be misplaced for many programme /
project environments. The project that takes two weeks to complete and involves 10 people all
within the same group or organisation is clearly a different proposition to the programme
involving hundreds of stakeholders over a period of years. The management task will have
some high-level similarities (e.g. the focus on delivery, balancing hard and soft issues, dealing
with fundamental uncertainties) but at a macro level, the level of complexity of process
required to run each will be very different. Also, the particular challenges will differ. Some
programmes will require processes to integrate diverse (and potentially conflicting)
stakeholder requirements; others will not and will have to deal with a high degree of
uncertainty. Uncertainty brings its own issues, and a potential conflict with process. For
instance, where a high degree of agility is required, this will conflict with the structural rigidity
that accompanies a high level of process focus in an organisation.
There is a paradox here, though, that whilst the process-based approach appears to be
inappropriate at a macro level (where it is being promoted by a number of bodies), the
process-based view has had little traction at the micro level in projects – certainly when
compared to manufacturing. A change in emphasis on the utility of process-based approaches
would be beneficial.
Basic processes are vital to provide an "agreed way of working". Beyond this, the new focus
needs to be on behaviours and how systems of work (particularly the measures – see
Behaviour 7) promote the behaviours that are needed. Standard operating practices are
relevant for low-level work packages, but the approach for outsourced complex programmes
will rely less on one-best-way, and more on an ability to handle emergence and uncertainty,
and to work with the complex socio-political systems that are modern programmes.
Behaviour 7: Believe the indicators
In a recent study we conducted, we encountered a senior manager who noted that, “All the
indicators are green, but the client is still not happy". The time and effort that goes into such
reporting is significant, but doesn’t necessarily give the desired result.
Kaplan and Norton (2001) promoted an approach where they likened indicators to the pilot’s
instruments in an aircraft, which report the status of the aircraft to the pilot. This is the
approach that many major programmes have tried to use, though without consideration of the
consequences. The analogy of the pilot’s instruments is limited in its utility, as in an aircraft,
the fact that you are measuring the airspeed, doesn’t (significantly) impact the airspeed. The
air doesn’t try to compensate or correct itself to give you an "OK" reading. In a programme,
this certainly does happen – behaviours are affected by how performance is measured. One
popular method of control in projects is Earned Value (Fleming & Hoppelman, 1996). Measure
this, and it encourages managers to begin packages of work and carry out the relatively easy
work first, as this will boost earned value measures. In parallel, over-estimation of % complete
of those tasks will give the illusion of progress and keep indicators "green". This will be
counter-productive as the started work packages can compromise workflow, and obscure or
deflect attention from critical work. The measure (earned value) drives a behaviour that is
counter-productive (starting tasks, over-estimating % complete).
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In addition, whilst it is not unusual for work to be outsourced, apparent control of that work is
less likely to be relinquished. Contractors are not to be trusted of course. Consistent with this,
and deriving from policy described in the first point on partnering, we see that organisations
involved in outsourcing often construct entire structures to shadow the outsourced work. This
is non-value-adding and ignores the fundamental paradox of control in social systems – the
more effort is put into control, the less real control one has (Streatfield, 2001). Real control
comes from encouraging beneficial behaviours, not simply measuring conformance to a set of
objectives. As the scenario at the start of this section indicated, whilst a contract may set out a
particular and specific set of deliverables, these may not be what the customer really wants.
Whilst indicators and contracts are usually written in terms of product deliverables (relatively
easy to measure), the real performance is assessed by the level of service that customers are
receiving. As the service management literature tells us, this is not so readily measured,
certainly not in objective terms.
Again, the concept that prevails appears to be that which was promoted for localised project
controls – simple measures that can be assessed locally. Programme level issues require that
these are united and that the behaviours they engender are consistent with what is required
by the programme, not just small parts of it.
Behaviour 8: Don't worry about managing up
Changes to programmes cost money. At one level it is recognised that the organisation
outsourcing work is prone to change its requirements. At another level, this can be
overshadowed by the impact of a single comment or statement to the press. Interestingly
these same people frequently then express dismay that the impact of their action is so costly
or disruptive.
The MoJ case illustrates what happens if the main client representative (the sponsor or senior
responsible owner – (SRO) doesn’t manage up. Specifically, changes to requirements were
allowed and expectations were not managed with other key stakeholders. The result was that
rather than protecting the programme by demonstrating to those stakeholders the impact of
those changes (on cost and time particularly), the changes were simply passed on to be
implemented. In addition to the disruptive effect on the programme as a whole, this caused
demotivation in the delivery organisations who saw completed work rendered useless by such
changes.
Whilst recognising the emergent nature of programmes, it is vital that this doesn’t end up like
Chicago’s Millennium Park. Like many other millennium initiatives, this fell foul of the Y2K
project bug; whilst most of the world’s software defied predictions and continued working at
midnight on 31 December 1999, any project with the word "millennium" in it appears to have
crashed. Millennium Park was a "fast-track project" – meaning that previously sequential tasks
(e.g. concept, design, engineer, approval, groundworks, construction) were carried out
concurrently. In this case (amongst other issues), because of changes required at the design
and approvals stages, groundwork had to be re-done, causing considerable delay and great
expense. The logic of task precedence still holds regardless of time or political pressures.
Failure to manage up can have interesting effects. In a recent study with a major
infrastructure provider, we found that the single greatest cause of delay and disruption to work
was, indeed, the client. The suppliers had known this for a long time, but it took considerable
data to convince the client that their own people were at the root of so much delay.
Responses to this challenge have included the use of last responsible moments (e.g. Smith,
2007) for information or changes. These are highlighted points in the programme where it is
necessary for the client to have made a final decision. After this, it is made clear that there will
be an impact on cost, schedule or both. This sounds rudimentary, yet is rarely seen in action.
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Other responses include involving senior stakeholders in development work at an early stage
as "lead users", prototyping and active rehearsal.
Traditional approaches to managing projects require information to be passed to key
stakeholders. It is clear that for successful programmes, broader and more active stakeholder
management is required, including this requirement to "manage up".
Behaviour 9: Not killing off the right (wrong) programmes
Some organisations are excellent at killing off programmes. For instance, in new product
development, many firms will kill off 95% of ideas early in their life. This is treated as healthy,
encouraging a good flow of ideas, and giving the opportunity for innovation without
overloading an organisation with change. The concept of running programmes through stages
(activities) and gates (decision points on whether or not to continue) is well established in
many industries (Cooper, 1990). But whilst gateways are well established in government
projects, the gate appears to be always open. During a recent conversation with a major UK
government department, the question was raised, “Do you use gates?”; the answer was a
clear, “Yes". Then asked about whether any major programmes had actually been stopped at a
gate, the answer was an equally resounding “No".
In other environments, when ideas do not pass a "gate", they can be recycled, combined with
others, reworked or just parked. Consistent with up-front investment and managing up, the
opportunity to bring ideas forward is enhanced by the opportunity to kill off programmes. Yet
around many clients, the objective just seems to be to keep the pipeline of work full,
regardless of the consequences for the rest of the portfolio of work.
Killing off programmes that are failing or are no longer required is likely to be politically
unpopular and is frequently hampered by a commitment to "sunk costs". However, limiting
some programmes may have unforeseen consequences, and it is in this area that the
requirements are even further abstracted from projects and project-thinking. For instance, in
2002 in the UK, South East Trains (who run the commuter lines from south of London into the
capital) received a delivery of new electric trains or "sets". The new sets differed from the aged
rolling stock in many ways, but in particular in the comforts offered to passengers, notably air
conditioning. However, each new set needed a much higher level of power to operate, and the
programme to upgrade the power system had been postponed. The result was that the overall
benefit (passenger comfort) couldn’t be delivered until all of the enabling works (increasing
power capacity on the line) had been completed. This joining up of programmes is the domain
of portfolio management. Project-based views of the work are inappropriate. As for previous
points, joining up benefits cannot be left to the project or be done at the task level.
Behaviour 10: Learning is less important than doing
Learning in the programme and project environment does appear particularly problematic. The
"reset" at the end of a major piece of work seems to trigger particular behaviours both in
individuals and organisations that result in moving on to new work without taking learning
from the previous work. One major UK government department we conducted research with
recently noted that at the end of projects, they now conduct "lessons identified" reviews,
rather than "lessons learned reviews", because “…we’ve realised we don’t learn". Another UK
government department we have been involved with noted that their contractors did not
synthesise and codify the learning from the project after completion because they were not
required or incentivised to do so. When we asked to interview a contractor to discuss the
success of the project we were told that many of the staff had since moved to other projects
and “what charge code should I book that time to?” These examples show that while
organisations involved in programme delivery acknowledge that learning is important, they do
not have the time to do it due to the requirement to move on to the next task as quickly as
possible. And – more worryingly – the need to synthesise the learning gets lost as their view is
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that someone, somewhere should pay for it. The reality is that organisations are already
paying for it in increased costs and "sub-optimal" working practices. Moreover, when personnel
change occurs in a project, all of the tacit knowledge and unembedded learning will walk out of
the door. This leads to a kind of "programme quick-step" where the incoming managers need
to build relationships and learn the processes – slowing down the overall delivery of the
programme.
We suggest that the remedy is simple. Invest in the time and space required for the people
involved to capture the learning gained through the programme. The corollary of not doing this
is considerable cost and waste, which in most industries goes unmeasured. A first step in
measuring the scale of the issue will yield the business case for the investment in learning. A
road is still a road, the methods of construction will not change dramatically but some of the
working processes may evolve. Without capturing what does, and doesn’t work, programme
performance will not improve in the long-term.
The project-based view stopped work at the completion of core tasks. A programme-based
view has a much broader view of the impact of the work on the organisations involved, for the
present and in the future.
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Final Remarks
In contrast to adversarial contracting approaches, we have noticed that some organisations are
working in a different manner. They are behaving as intelligent clients. These organisations
believe that the buck starts and stops with them. They hold all of the risks all of the time and
seek the win-win on behalf of the network not simply themselves. To ensure that suppliers are
able to achieve greater performance, intelligent clients ensure that there are high levels of
transparency, reciprocity and sharing of processes, and they are adaptive to the needs of
suppliers. As they expect the solution to emerge, the to-ing and fro-ing facilitated through
buyer-supplier adaptation of products, services and processes is required. And, as things are
not expected to emerge fully formed, intelligent clients understand that there will need to be
learning on the job and trials will be needed as part of the budget. Without them the
programme is likely to fail to meet targets. Intelligent clients understand that metrics do drive
behaviours. They then go away and understand the behaviours that are necessary for effective
programme delivery and install the metrics needed. BAA understood that motivating the
network of suppliers to work together was critical and set up the joint reward pot that linked to
delivering the project on-time and within budget.
Intelligent clients also manage their own and their providers’ levels of optimism bias, and
manage up – making sure that whilst a programme must have the necessary "top cover", this
is not driven by political whim or the Daily Mail3.
The common thread through all of these issues is that current approaches used by government
and industry to outsourcing programmes of work have been based on those derived from
project management. We have demonstrated that they are inappropriate for complex
outsourced programme delivery. Indeed, the characteristics of excellent programme managers
(Partington, Pellegrinelli & Young, 2005) demonstrate that most of the elements of "how to
make a programme fail" are otherwise called "low-level conceptions". In order to enable
intelligent client behaviour, it is world view and mindset change that is needed. Because if the
flow of damaging and expensive failure is to be staunched, it is vital that clients move beyond
the low-level conceptions of project procurement, to those appropriate for excellence in the
world of complex programmes. We have demonstrated here some of the aspects of this
excellence and that this is not a radical or particularly new idea, but one that requires us to
develop an alternative approach that starts with the client – the intelligent client.
A UK daily national newspaper. It is common in government to refer policy and decisions to the 'Daily Mail test’ – what would this look
like if written up by a highly critical / cynical journalist?
3
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Notes
The International Centre for Programme Management is the result of a collaboration between
Cranfield School of Management and EDS. It aims to develop the practice and theory of
programme and project management.
If you have any specific questions or comments, or would like further information, please
contact us on +44(0)1234 754537, email: icpm@cranfield.ac.uk, or visit our website:
www.cranfield.ac.uk/som/icpm
A world leader in management education and research
The triple accreditation of AMBA, EQUIS and AACSB, held by only 18 schools throughout the
world, as well as Economic and Social Research Council (ESRC) recognised research training
and degree programme, are testimony to the academic quality of Cranfield.
Partnership is assured through Cranfield’s ability to ‘tailor’ knowledge to individual need, or to
develop ‘customised’ programmes for organisations. This personalised approach has long been
enshrined in ‘the Cranfield Experience.’
We also place great emphasis on personal development, one of the key benefits that sets us
apart from our rivals. We believe that in order for our delegates and graduates to become
leaders of the future, they need the right the right mix of business knowledge and
management skills.
About EDS
EDS, an HP company, is a leading global technology services provider, delivering business
solutions to its clients. EDS founded the information technology outsourcing industry nearly 50
years ago.
Today, as a business unit of HP’s Technology Solutions Group, EDS delivers a broad portfolio of
information technology, applications and business process outsourcing services to clients in the
manufacturing, financial services, healthcare, communications, energy, transportation,
consumer and retail industries, and to governments around the world.
International Centre for Programme Management
Cranfield School of Management
Cranfield University
MK43 0AL
UK
Tel. 01234 754537
www.cranfield.ac.uk/som/icpm
email: icpm@cranfield.ac.uk
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