Delivering value through collaborative working

By Konrad Mizzi, Principal, Moorhouse Consulting

Many organisations are facing increasing internal pressure to optimise their operations and maximise the value of their assets and resources. One approach, which is often strangely overlooked, is to work more collaboratively with other operators in the industry. Benefits of partnering in this way include cost reduction, resource and asset optimisation, performance improvement, and increased revenues through joint-approach to market and knowledge sharing.

Over the last 18 months Moorhouse Consulting has provided programme leadership support to the UK’s Public Sector Nuclear Estate to develop and deliver a successful collaborative working programme.  This article presents the key building blocks required to create the right environment for the successful delivery of such programmes, and the successes and lessons learnt along the way.

Collaborative working across 20 nuclear sites

The Nuclear Decommissioning Authority (NDA) manages the UK’s civil public sector nuclear sites and respective decommissioning programme on behalf of HM Government and presents an interesting case study on delivering value through collaborative working.  The NDA has established contracted arrangements with delivery partners which operate and decommission seven Site License Companies (SLCs) across twenty sites such as Sellafield, Dounreay and Wylfa.  The NDA is responsible for:

• 39 reactors;
• 5 fuel reprocessing plants;
• 3 fuel fabrication plants;
• 1 redundant enrichment plant; and
• 5 nuclear laboratory complexes.

In order to avoid a situation where the operations of the individual sites are optimised at the expense of the wider Estate, the NDA and its Delivery Partners devised a collaboration strategy to optimise use of assets and resources across the sites.

Moorhouse Consulting has supported the NDA and the seven Site License Companies to develop an Alliance to deliver value through collaborative working. This entailed launching a collaborative working programme with initiatives ranging from collaborative procurement to facilitation of inter-site service provision to the establishment of communities of practice for specific disciplines.

The journey to establish such a collaborative programme across separate businesses with different objectives is very challenging. However the rewards of success are significant and worthwhile pursing with opportunities for value creation ranging from 6 to 20% savings depending on the type of collaborative initiatives pursued.

The Moorhouse team supported this journey to forge the collaborative working programme and built bridges between all participating entities by carrying out the role of facilitator and broker. This support has helped deliver a programme which is built on trust and which delivered early successes.

All Participating Entities voluntarily chose to participate in the programme and committed to:

• Tell it as it is;
• Ask each other for support, guidance and help to deliver business outcomes;
• Work within a co-operative mind set and share knowledge and experience;
• Seek to understand and anticipate each other’s needs and expectations;
• Celebrate the opportunity and value of working together;
• Hold each other accountable; and
• Respect each other’s business needs.

The rest of the article presents the key building blocks which if implemented effectively will create the right environment of successful collaborative programmes. The building blocks are also supported with practical examples from the nuclear collaborative working programme.

Building Block 1:
Securing Commitment to Evolutionary Collaboration

For any collaborative initiative to be successful, it is critical that all participating entities are committed to collaborate. In doing so collaboration should only focus on initiatives where it makes business sense to do so.

The participating entities in the nuclear programme made a deliberate decision that the first initiatives should focus on delivering projects of medium complexity with short-term benefits as opposed to delivering major business change.

This led to the establishment of a Collaborative Procurement initiative focusing on aggregating demand in commodities and services. Examples of such collaborative procurements included Electricity, Personal Protective Equipment, Travel Services, and Agency Supplied Workers. However the programme sponsors also had the vision to initiate analysis on longer-term ambitions while implementing the less complex collaborative initiatives.

The programme was delivered successfully in its first year of operation which led to evolution of the programme which now has a more ambitious vision, and aims to improve business and programmes lifecycle performance, optimise the use of assets and resources, improve inter-site service provision and share knowledge.

This highlights the importance that that collaborative initiatives should go through an evolutionary process where the initial focus should be on medium complexity projects and that the transition to more complex projects should be paced to reflect learning and success. This approach will ensure that the Management Teams participating in Collaborative initiatives are confident on the prospects of success.

Building Block 2:
Putting the Right Incentives in Place

To foster a climate of co-operation all parties need to be confident that benefits and contractual liabilities will be apportioned in a fair and transparent manner across the participating entities. 

Most commercial fee models are not designed to cut across multiple organisations and will require adaptation to encourage collaboration across multiple organisations.  Such adaptation is critical to ensure clear and understood incentives which will help to ensure appropriate behaviours.

In the Nuclear collaborative programme the participating entities agreed to reward-share model which rewards the attainment of Value for Money. In this respect all savings were baselined and a traceable process was adopted in accordance with National Audit Office Guidelines. Moreover out-year savings were also recognised to ensure that decision making was aligned to longer-term objectives.

Building Block 3:
Ensuring effective governance and decision making processes

To deliver a successful programme which cuts across multiple organisations requires effective governance and decision making processes. However this should not create unnecessary bureaucracy and significant incremental costs.

The challenge of seeking approvals for key decisions from different businesses with different delegated authorities should not be underestimated. Hence the governance models for collaborative programmes should not burden the programme with complex and costly bureaucracy but should be evolved to reflect the complexity of such programmes.

From the experiences of the nuclear case study it is evident that in ensuring expedient decision making, it is important that strategies and business cases are developed collaboratively. This will require extensive facilitative skills to ensure that all participating entities are part of the journey, where key decisions and milestones are reached.

It is also critical that key decision makers are front-line participants in collaborative initiatives. For instance in the Nuclear collaborative working programme the decision making timeframes were reduced significantly when Board-Level executives were appointed to the Steering Board. An emphasis should be made to ensure the right participants from each participating entity are nominated to the right forums.

Moreover this programme adopted a graded approach to Governance wherein the appropriate degree of resourcing, business reviews and approvals are applied depending on the complexity and risk associated with the specific initiative.

Building Block 4:
Putting in place the right programme leadership capability and a collaborative culture

The nature of collaborative initiatives requires Programme Leaders to be not only technically competent in delivery but also be able to foster a climate of business engagement with peers from multiple organisations and other stakeholders with a view to seek buy-in on all the key aspects of collaborative project delivery.

The delivery of collaborative programmes requires strong programme leadership to create an environment which is conducive to collaboration and to develop an effective team where traditional command and control structures are replaced by cross-organisational teams.

Programme and project managers will need to undertake the role of a partnering manager to foster a climate for cooperation, knowledge sharing and constructive conflict resolution. Our experience in the nuclear sector suggests that a compact and centralised programme team is required to ensure effective programme management. However where possible, delivery should be led and undertaken by the various participating entities, which will ensure value realisation without creating the requirement for significant incremental structures. Hence each participating entity in collaborative initiatives will have the opportunity to shape the collaboration and have a strong voice at the boardroom table.

Seize benefits which would otherwise remain untapped

Many organisations have now initiated efforts to optimise their cost base. However fewer organisations have looked at collaboration with other players in their industry segment as a key strategy to reduce costs, innovate and realise additional benefits which would not otherwise remain untapped.

The practical examples presented in this article highlight real benefits derived from collaboration. However delivering collaborative programmes across multiple organisations is challenging and requires the right environment to be created for such programmes to flourish. The building blocks for successful collaboration presented in this article transcend industry sectors and represent good practice in creating such successful collaboration.

If you would like to talk to us call on the number below. Alternatively, click on the consultants email address, provide us with your details and we will call you back. We look forward to speaking to you. Contact: Email: Tel: Konrad Mizzi konradmizzi@moorhouseconsulting.com +44 (0) 20 3004 4482