I have been reading about this on the BBC and thought that, since Robert Peston is referring to it as a public-private partnership (one of Kubernetes’ specialities), a bit of stakeholder analysis was in order.

At the moment, it looks like the key stakeholders are the Treasury and the bidders; with some of the others having a veto power. The Hedge Funds have a large enough shareholding to block a complete sale; the competition authorities can block the support under e.g. EU state aid laws.

It is difficult to decide whether Gordon Brown and the Treasury are separate stakeholders in this (clearly Northern MPs are).  They are listed separately as I wanted to identify the various political dimensions and there should be a difference between the executive operational and political arms of government. Similarly for the FSA and BoE, however they only have influence and little real power at the moment. The people with least influence/power at the moment are customers and staff, however they are the key stakeholder groups that need to be won over for any rescue to be successful.

This is the really interesting part of the picture moving forwards. Assuming that a deal can be struck that a buyer comes in that satisfies the hedge funds (I wonder what average price they bought at?) and the Treasury, then the key is making it work for the 5 years or so that the government backed bonds are projected to exist.

In this scenario, whoever is in charge will not have to manage relationships with the usual customers, staff and shareholders (and the FSA & BoE as they are a bank), they will also have to manage the Political and Government establishments as well. Note I identify two separate stakeholder groups here as the drivers for civil servants in the Treasury are very different to the Chancellor, who is unlikely to be Alistair Darling for the whole time.

As to Gordon Brown………well there has to be an election before May 2010…….

Can it be made to work?  What is clear to me is that the new CEO and senior management will have to have a facilitative leadership style as they have to have all the stakeholders working together to make it happen.  Confidence is everything to a bank, which is why there was a run on Northern Rock in the first place.  If any stakeholder group is not fully bought in the market will pick on it and everything will go to pot and quickly.

So in my opinion what should appear in the jobs network is an advert along the lines of “Expert Facilitator needed – Financial Services experience desirable”.  Anyone want to comment on Jayne Ann Gadhia’s leadership style?

….. to misquote Hamlet.

Having stated that I deliver projects on time, I was sure to become the butt of some well judged jokes when I was late to a meeting yesterday when a number of small delays in combination meant that I was 15 minutes late in total.

The learning from the situation (apart from one or two choice funnies that I’d prefer not to repeat in public) is that DSDM’s key techniques can be applied almost anywhere. In my morning timebox, before I left for the meeting, I tried to cram too much in. I had not defined and prioritised all the requirements correctly; filling the car with petrol was a “must have” that I had not taken into account. Also, while “having lunch” was a “must have”, a sandwich from the petrol station would have met the requirement better than “gold-plating” it by sitting down for bread and soup at home.

…£2bn cost of government’s IT blunders is a new report in the Guardian this weekend. It niggled me a bit that they had detailed this list of massive failures but had done no analysis of why this was.

What struck me is that I expect that one of the common denominators is that all of these projects were managed using the PRINCE 2 project management methodology, it is impossible to do any IT project in the public sector without it. Now I am not saying that this is why these projects failed, I don’t have access to enough information to say, but it is a common factor and so should be analysed.

The other likely common factor, linked to both PRINCE 2 and the typical government approach to procurement is the practice of Big Requirements Up Front. This is where the users sit down and decide what they want the system to do in detail, partly so that external contractors can pitch for the development contract and their bids “objectively” compared for “best value”.

This is likely to be the 3rd common factor, use of external contractors, competitive tendering, the perception of transfer of risk and confrontational legal agreements. The problem is that risk is not transferred in reality; when was a government contractor last successfully sued for a failed project?

As Scott Ambler points out in the article in the link above, the whole BRUF approach has been proved to be flawed for a number of reasons

1. The requirements change because the business changes. This is inevitable and as true in government (average tenure of a minister?) as in the private sector.
2. People’s understanding of the requirements change. In reality most end users can only adopt the “I’ll know it when I see it” approach as they don’t know what technology can do and people just change their minds
3. People make up requirements. If they are only being given one chance to specify what they want before it is tendered, they will put in stuff “just in case”. This is a particular problem in the public sector as IT suppliers to government are notorious for charging through the nose for changes in requirements (bid low, make margin on the inevitable changes)

There is a different way. Use a project management approach called DSDM and change they way you procure IT systems. Don’t specify the project in detail up front, just do enough to provide a sensible budgetary estimate and procure developer time rather than a finished system. This does mean a different approach to risk management but as the Guardian’s list of failure shows the current approach does not work!

…. and already Project Management has hit the headlines!

Network Rail has got it in the neck for over-running engineering works at Rugby and Liverpool Street Station which have created misery for people going back to work this week.

My point about all this is, what do the people in charge not understand about the meaning of the word deadline?!

I find this a lot in project management, the concept of flexible deadlines. While PM’s talk a lot about delivering on-time in fact most projects are set up with delivering “all the products / features” as the only priority. They are not helped by project management tools such as Microsoft Project where it is almost impossible to completely fix a deadline or flex the features / products that need to be delivered.

If you want to deliver to a deadline then you have to be prepared to flex what you deliver according to business priorities. Some of these priorities have to be “should haves” rather than “must haves” otherwise any problem such as lack of resource will result in missing the deadline.

I don’t have an inside track on what went on here, but it looks like the project was doomed before it started; too much to do in too short a time. The contractors, particularly Bechtel, must have known before they started that there was a high risk of not hitting the deadline, given their whinging about not being able to get enough engineers. Clearly they have not managed their stakeholders very well, given that Network Rail and the Train companies are saying that they did not know about the delays until just beforehand.

I just hope that their lawyers are better than their project managers! Actually no, as a taxpayer I’d rather the fines that the ORR will level on Network Rail get passed onto Bechtel. Somehow I think that it won’t as the public sector is not good at passing risk onto the private, even though that is what outsourcing is supposed to be all about! (This is the subject of another white paper I’m thinking about)

We’d like to wish everyone we know a very Happy Christmas and prosperous New Year. As with last year we have made a donation to the RNLI in lieu of sending cards.

(c) Marcus Renwick 2007

Kubernetes case study on the National Packaging Waste Database project has now been published!

NPWD Case Study

We’d like to thanks John Turner and Phil Conran, from the Advisory Committee on Packaging, and Keith Stonell and Steve Watkins, from The Environment Agency, for their permission to publish this case study.

I have commented before on the convergence between stakeholder capitalism and mutual ownership structures and suddenly there is a rash of news stories about large groups of people clubbing together to own an organisation. First the Conservatives launch an initiative to support the development of new co-operatives to deliver public services, the specific example being co-operative schools funded by the taxpayer and owned by parents or the community. Then 20,000 football fans, who have all paid £35, buy a controlling share in Ebbsfleet United football club and they will all have a say in key decision such as squad selection and transfers.

Why this is interesting is that there are several industries in which mutual organisations have been competing against “for profit” businesses for many decades e.g. Co-op and John Lewis in retail and e.g. Building Societies in financial services. However many have, over time, demutualised i.e. become companies limited by shares. Conventional wisdom was that as the businesses got larger their members got further away from the co-operative ideal and were happy to take the money when it was offered. It also appeared that new “start-up” co-operatives were not being formed to replace those being lost.

At one point, relatively recently, it looked as if mutuality would steadily fade away. I think there were a number of reasons for this:-

• society was perhaps more focussed on the individual rather than the collective.
• perhaps the co-operative movement did not defend the ideals and benefits of mutual ownership properly.
• perhaps it also got contaminated by their association with the Labour movement.
• certainly the existing co-ops had become inefficient, not issuing dividends and devaluing the “brand”.
• certainly the co-operative movement also did not have the structures to support start-ups e.g. any form of venture capital.
• the mutual ownership model was not being applied or prompted to industries in which it could provide a significant differentiation
• “for profit” businesses embraced stakeholder capitalism reducing the differentiation with mutual businesses.

However what has happened is that new forms of mutuality have emerged. The key examples of this new wave are the “open source” movement in software and projects like Wikipedia. In these examples communities of people have organised on a global basis to share knowledge without expecting a “capitalist” reward. The Myfootballclub example is a slightly different model but very relevant.

The effects of this increasing competition at a business model / ownership structures level were brought home to me in a conversation with a senior manager in the Ordnance Survey. He was complaining about their revenues being undermined by advertising sponsored mapping from e.g. Google and open source mapping initiatives as well as commercial competitors. This I found somewhat amusing because the OS is a government agency and, in theory at least, a mutual organisation owned by all UK citizens!

The view that I am coming to is that in most industries with a low barrier to entry there will be at least one mutually owned organisation that provides a low cost, if not free, alternative to commercial alternatives. This will profoundly effect markets where there is true competition, particularly those in knowledge industries.

One area that I will be watching closely is how business that have mutual “overtones” e.g. youtube, facebook etc will adapt as they become big businesses, when their core functionality can be easily replicated under open source and the mutual business model is attractive to end users frustrated and annoyed with big business.

The other area I will also be monitoring is how the “traditional” co-operative movement reacts. The new mutuals are being set up outside the movement even those in public services. Will they focus on encouraging mutuality in any and all forms or will they focus on supporting the Labour party? They may not see the choice in these terms, but I believe it is there.

I’ll also be watching to see how the myfootballclub experiment works (or not). My view at the moment is that the mutual ownership model will have little to do with success or failure; there are successful and unsuccessful co-ops in other markets. It is also worth pointing out that most community sports clubs are owned by their members. The issue will be the execution of managing the complexity of 20,000 people actively involved in running team affairs. The business schools will already be looking for furture case studies!