Shared Purpose Drives Performance: Outcome Based Contracting at Sellafield

In her second post as our March guest blogger, Katherine Bew, Managing Director of the international built-environment consultancy, PCSG, continues to explain how a fresh approach to project delivery at Sellafield is unlocking benefits at the UK’s largest and most complex nuclear site.

In my guest blog post last week, I gave an overview of the Outcomes Based Contracting Toolkit and its four cornerstones as shown in Figure 1: Shared Purpose, Aligned Outcomes, One Team Approach and Right Roles.

Outcomes based contracting

Fig 1: The four cornerstones of Sellafield’s OBC approach

This week, we are taking a closer look at the first of our four cornerstones – Shared Purpose.

Put simply, to successfully unlock value on any major project, business needs must be aligned. In order to achieve successful alignment, the purpose, objectives and values of an organisation must be shared – but not just between members of the organisation alone.

If the ultimate aim of a complex major project change programme is to save costs (relieving the burden on the taxpayer) and effectively increase efficiencies (saving further costs), common values must spread out across the supply chain to every single organisation involved.

When we break down the Shared Purpose cornerstone into its three core principles, we begin to see that performance is driven by setting this clear, compelling and common purpose that encourages a team to work together to achieve the desired results.

The first core principal is to understand the connection between business needs and the project as early as possible.

AShared objectivess Outcomes Based Contracting (OBC) is often a transformation of culture and people’s behaviour, this will have to involve true understanding (and not just definition) of the outcomes linked to the specific long-term business objectives, by communicating the strategic context of the project to all stakeholders involved (Figure 2).

On the OBC pilot project, there is a strong commitment in all those involved in project delivery, due to having a shared understanding of the connection between Sellafield’s business needs and the outcomes of the project. When people buy in to the purpose (and how it links to meeting the business needs of both Sellafield and the supply chain), they are motivated, energised and inspired because – ultimately – they have a direction and purpose that they believe in.

The second core principal is to set clear, shared objectives and a scope of works.

Shared objectives and a scope of works must be clearly defined and agreed to by all stakeholders if commitment to them is to be honestly and fully given.

Developing both the project objectives and the scope of works, in partnership with the supply chain, will increase everyone’s understanding of the benefits to all organisations involved – and this will no doubt engender a stronger sense of commitment.

Shared understanding of a clearly defined scope of works is essential because it enables the right resources to be identified to carry out the works. It also allows the identification and management of risks and opportunities to best effect, ensuring the best delivery solution is developed. This leads nicely on to the final core principal!

The third core principal is to balance risk and reward between the chief project organisation and their supply chain partners.

There has to be a win-win for all partners in order for the project purpose to be truly shared and motivational, and this win-win has to serve the needs of all. Two essential elements for success in this regard are the requirements for transfer of risk to the supply chain, at best value for the taxpayer, and the need for commercial return to be attractive enough to the supply chain that they will continue to invest in OBC and remain keen to work on future OBC projects.

For Sellafield, the rewards relate to the organisation’s objectives of remediating land faster, with all the associated benefits of doing so, as well as the opportunity to transfer more delivery risk to Sellafield’s supply chain partners than is usually the case. For the supply chain themselves, the rewards come in terms of a fair level of pay, a fair approach to risk, reputation building and long-term prospects for work – thus building organisational resilience all round.

In summary, a clear and compelling shared purpose, which a team has to achieve by working together, drives performance. To inspire commitment to this shared purpose, whatever it may be, it needs to be central to the reputation of the partners’ organisations and the local or national community, as well as the personal careers of individuals. The clarity of the shared purpose is crucial. Having a clear Shared Purpose provides people with a sense of commitment to their work together.

Next time, we will look at the second cornerstone: Aligned Outcomes.

Read Katherine’s first blog in the series

Read Katherine’s third blog in the series

Read Katherine’s fourth blog in the series

Read Katherine’s final blog in the series

***

PCSG-strapline-CMYKKatherine Bew is Managing Director of PCSG – a leading built-environment consultancy.

PCSG is focused on delivering sustainable outcomes through digitisation and effective use of resources. From its bases in the UK and Australia, PCSG is a trusted partner to some of the biggest names in industry. PCSG helps clients to deliver, operate and optimise their built assets – solving key business issues, unlocking value, building resilience and helping transform the way they do business.

Please feel free to share your thoughts and feedback by commenting on this blog, sharing on our social media feeds or by contacting Katherine directly at: katherine.bew@pcsg.co.uk.

www.pcsg.co.uk

 

Leave a comment

You must be logged in to post a comment.