In 2008, I joined one of the largest water/wastewater engineering consultancies in the country as a principal mechanical design engineer. Through acquisition, they are now part of one of the worlds’ largest engineering consultancies.
The consultancy had a design delivery framework.
Within six months of joining, it appeared that things were not going well with this particular framework. Being in the right place and the right time, changes were implemented and I found myself as general manager of this regional design office. Don’t feel too sorry for the chap who was previously in-post as he was retained as an engineering consultant. This was excellent for me as he was on hand to give support and background information as required.
The office was producing good, dare I say excellent work. Specifications were met, not exceeded, processes and systems were in place, governance was adhered to, and engineers were good quality. So how could we possibly have a £700,000 commercial black hole?
An urgent appraisal was carried out since the situation was potentially “life threatening” to the future of the office. Sure there was an error or two, some inefficiencies on occasion, but nothing too serious.
It became apparent that the majority of the negative cost position was attributed to uncontrolled, unmanaged, and unaccounted for change. The fundamental issue being that engineers lacked commercial focus, they are not thinking cost, they are thinking design delivery.
Picture the scenario, the civil engineer sitting at their desk, the phone rings, it’s the client. “Hi, its Bill here, can I ask that you move the dirty backwash water tank to the other side of the access road please. The civil contractor has done some trial pits and found significant unrecorded services. Rather than mess with these, if you could move the tank across the road, that would be excellent”.
Engineer responds “sure Bill, will do, I will get this changed”.
So, I can hear you all screaming, why did the client speak to the engineer and not the project manager? Why was the project manager not in control? Of course, you are spot on. The engineer then wanders across to the draughtsperson advising of the change, not telling the mechanical or electrical engineer as they suspect that there is no impact, and doesn’t tell the project manager right away, or perhaps not at all.
This scenario explains the blog title, how change during project delivery can be your worst enemy, however, it’s only like this through failure to manage change properly.
I made the following changes to the team disciplines and processes:
- The appointed project manager was the single point of contact for the client, ensuring that any dialogue/communication is known to them, is recorded at contract level and controlled/managed by them.
- Can we ever stop a client speaking with an engineer? We can try, but it often happens when addressing technical queries. It was therefore critical to educate the engineers in the criticality of change.
- Change is therefore managed by:
- Written record of any calls coming in to an engineer which relate to project scope and pass to the project manager in real time.
- The PM shall evaluate the communications and any change requests recorded in an “Early Warning” issued back to the client detailing out the impact to time, cost and quality.
- The client would then respond, agree and issue a compensation event, or not.
- The PM advises the engineering team of a received instruction and the change made.
- The PM subsequently issues an application for payment and the client pays the agreed, amended valuation.
- The engineers were issued with a “Change Pad” which sat next to their desk phone. These pads had shadow printing which detailed
“CHANGE = EARLY WARNING = COMPENSATION EVENT : DON’T BREAK THE CHAIN” .
Through proper management, “change” offers up commercial opportunity, hence the second part of the title, no change management can haemorrhage money and destroy a business. Change is therefore something to be embraced, as it can add value where the change is instigated and approved by others. Incidentally, the change of tank location example was captured, an Early Warning produced and presented for £37,200 of additional design work which the client approved. Just to support understanding, this relatively simple change impacted on
- Planning drawings
- Site layout drawings
- Structure detail drawings
- Hydraulic profile, level details
- Interconnecting pipework design
- Sludge management
- cable duct details
- Access and egress etc etc.
One year later, I had presented 104 early warnings/ compensation events relating to previously uncaptured change and closing the commercial black hole and supporting the preservation of the office.
Hopefully this underlines the importance of understanding and managing change effectively.