News Comment

Updated 15th April

I note that two BA Directors have left the company as a result of the T5 problems.  Not sure if we should conclude that the problems were mainly on the BA side but it seems that way.

2nd April

I can’t let the current controversy over Heathrow Terminal 5 go un-commented. From a project management perspective it will, I’m sure, become a very interesting case study. What the press reports in the last few days seem to have forgotten is that the construction itself was delivered on time and to budget; a genuine triumph of project management. One of the principle reasons for this seems to have been that BAA accepted all the risk on the construction project i.e. set up a collaborative rather than confrontational relationship with their sub-contractors and suppliers. This is a lesson that other major projects could learn from particularly in government.

So if the building was delivered correctly and on-time what went wrong? It looks as if the baggage systems (and by system I mean both people and technology) had not been tested with the volume it was expected to cope with. BA seemed to have decided to move nearly all its flights at once in a “big bang” implementation. As most project managers know, this is an extremely high risk approach only to be used when there is no sensible / economic alternative. The key question is did they HAVE to go “big bang” and if so why were the systems not tested properly in this scenario. This seems to be backed up by suggestions that BA was warned that not enough people had been properly trained

How it seems to me is that there was either a poorly planned, poorly executed or possibly no proper change management programme inside BA. Which it was only the insiders will know, but an organisation with a long history of poor relationships between management and staff should have realised that they needed to make a special effort with a high profile project like this. It could have provided a “clean start” for labour relations and at one point BA was hoping for this. However the bruising battles with the unions about changes in working practice for T5 seem to have spoiled the opportunity.

If is is mainly a BA failure then BAA should have learned the lessons in collaboration gained from the construction; as their reputation is being dragged through the mud alongside BA’s. This is only adding to the calls for BAA to be broken up e.g. in Jeff Randall’s article in today’s Telegraph.

It is not surprising that the government couldn’t manage the complex stakeholder requirements that I analysed a couple of weeks ago. It was one of those “no win” situations where whatever they did someone (possibly everyone) would have been been unhappy. One of those lessons that we keep re-learning about public-private partnerships is that the stakeholders have to want to work together and clearly this was not the case.

What surprises me is that people keep talking about nationalisation as being the only option left i.e. if a private sector solution won’t work then the public sector has to pick it up. What they seem to have forgot is that there is a 3rd sector, the mutual and co-ops, e.g. John Lewis and Co-op Bank, that run reasonably good businesses. This is ironic given that Northern Rock was a mutual in the first place.

By this I mean that if taxpayer’s money is being used to prop up the bank I think that it is only fair that taxpayers have a direct vote on how the business is run. This one vote per investor, irrespective of size of investment, is the hallmark of a co-op/mutual

It would be reasonable to ask how this might happen and perhaps the only way might be via nationalisation i.e. government passes legislation to nationalise, restructures it as a mutual and then issues “shares” to all UK taxpayers.

This would have the additional benefit of minimising political interference in the running of the Northern Rock (building society).

Common sense isn’t it? The people who provide the investment controlling the investment. However because it is common sense it won’t happen.

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?

…£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)