Match-making in transport: winning the benefits of partner alignment

A growing emphasis on partner alignment in transport scheme procurement and delivery has been a feature of recent stories in LTT. But what’s the key to an effective partnership and how does one assess for success? The approach is introducing challenges to an industry more comfortable quantifying than communicating.

In an era of efficiency-focused re-thinking of established ways of doing things, greater attention is being turned across the transport sector to the value of effective partnerships and early supplier engagement in schemes. Framework agreement procurement and delivery is emerging as a means of improving efficiency, managing risk, and delivering cost savings without impacting service and delivery – and often improving it.

The recent McNulty review of rail efficiency identified the need for better procurement, and the strategic move of the Office for Government Commerce (OCG) to the Cabinet Office’s Efficiency and Reform Group illustrates how closely the Government is steering this agenda.

The House of Commons Science and Technology Committee report ‘Public procurement as a tool to stimulate innovation’ praised two DfT agencies for their progress. No longer just about technical capability and cost, the extent to which suppliers’ are aligned with the strategic goals of the client is a key consideration. The Highways Agency Strategic Alignment Review Toolkit (StART) assesses inclusion, leadership, sustainability, supply chain and cost as a means of increasing suppliers’ alignment to the principles found its Procurement Strategy and Strategic Plan, alongside performance data when selecting suppliers.

Assessing strategic alignment enables the client to determine which choices will offer the best chance of success, which have risks associated and which have little hope of achieving the intended strategic goals. In other words – who is going to help us and who is more likely to hinder? With delivery fragmented between client, consultant, contractor and sub-contractor, the lines of accountability are blurred. If one card falls the whole house is likely to come down – and it doesn’t matter whose fault it was. Customers, rate payers, share holders, board members – they’re interested in the result, not who did what and why.

Ian Ballentine, Programme Director at Network Rail, one of the county’s biggest project commissioning bodies, acknowledges the importance of an effective partnership relationship with contractors. To this end he says, “Network Rail is planning for earlier engagement with its supply chain as it delivers investment. This will help ensure the most effective solutions and approaches are considered before the costs are incurred. We plan to use a number of supplier engagement models to achieve this”. The approach is revolutionary and they are being closely watched for the potential to commercially share their expertise internationally.

Whilst pioneering work has been undertaken by the largest commissioning bodies – Highways Agency and Network Rail – the approach is also being embraced by more local authorities and commissioning consortia. Says Matthew Lugg, Chairman of ADEPT and Director Environment and Transport at Leicestershire County Council, "In the current economic conditions no organisation can afford to work isolation - partnerships are essential to drive down costs .This is recognised in the Infrastructure UK report and the recent Audit Commission Report on Highway Maintenance. The Midland Highway Alliance is perhaps one of the most successful examples of partnership working where 16 Local Highway Authorities and the HA have collaborated to deliver efficiencies and service improvements".

It is not an approach limited in its application to infrastructure delivery and maintenance. Dorset County Council has just radically reformed its bus procurement process, replacing short-term contracts previously awarded to the lowest cost operator with long-term partnering contracts that emphasise quality. The number of contracted operators has been drastically reduced, resulting in almost £1m of savings for the Council and offering some promise that the new contracts may encourage innovation and help launch new commercial services.

Giving suppliers a genuine ‘seat at the table’ improves project planning and communication, reduces risk, and improves efficiency and encourages innovative problem solving. The result is partners with mutual understanding and shared values and goals that have the capacity to manage and deliver the project and a genuine understanding of the detailed needs, opportunities and complexities of delivery. The change from supplier or client to ‘partner’ metaphorically transforms the process from a stilted puppet show to a well choreographed dance routine.

Organisational cultures are strong and not always well aligned within themselves. The practice of transforming culture is well established overseas and many blue chip companies undergo extensive processes to ascertain which culture is dominant and which best serves their strategic objective e.g. achievement-oriented, innovative, customer-focused etc. Cultures are driven by the values and behaviours of leaders.

Finding the ‘right’ fit for partnering can be challenging. If commitment to safety, customers, staff, sustainability or work ethic differs substantially, these affect the understanding, capability and commitment of the partners to these values. Finding a good fit will maximise synergies. A poor fit will cost more than it will benefit in the long term. Differences aren’t bad – they can be great for stimulating new ways of thinking and behaving – but where they exist they need to be fully understood and supported by good communication, respect and a commitment to the end goal.

Where budgets are high and risks correspondingly so, business psychologist Cliff Edwards of The Realise Organisation, whose clients include Network Rail, recommends using professional skills. “It’s a bit like insurance,” he says, “most people don’t make an important purchase without taking out insurance, and major infrastructure projects are no different. Where the risks of a bad fit between organisations threaten to compromise delivery and incur greater costs, it is worth taking the time and spending the money to use the tools available”.

One consultant involved in a successful joint venture alludes to his own way of finding alignment. “Sometimes we just need to lock ourselves in a darkened room and stay there until we sort it out, or agree to disagree. But when we come out, that’s it and we tow that line”.

Sharing the skills of partnership – two events and expert experience in LTT

LTT is delighted to be leading in an initiative exploring partnership delivery and its impact on procurement in transport. Over the next six months there will be two events and a series of expert articles published in LTT and on a new website sharing best practice.

On July 14 the dialogue will start with a small group of leading partnership practitioners meeting to discuss experience to date. They will include Ian Ballentine (Network Rail), Jenny Wright (Highways Agency), Nick Maltby of Bircham Dyson Bell — a leading legal firm specialising in procurement, Cliff Edwards from The Realise Organisation (business psychologists), Matthew Lugg Chairman of ADEPT and Director Environment and Transport at Leicestershire County Council, Steve Matthews of WSP Group and experts from LTT and the Landor publishing group.

Further discussion about the implications for suppliers and applying the experience from Network Rail and the Highways Agency to other local transport commissioning bodies will take place at a major conference on 13 October. For more information about this initiative and how you can become involved contact alison.dunatov@landor.co.uk