Leading and Managing Professional Services Firms in the Infrastructure Sector

Tim Ellis

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9781351216609
• Topic: Technology & Engineering
• Subtopic: Civil Engineering
• Index: Technology & Engineering

Professional services firms play a vital role in the social, environmental and economic well-being of any economy. This book considers the key skills and elements required to successfully lead and manage a professional services firm operating in the infrastructure sector. Public- and private-sector clients recognise the role that infrastructure plays in the functionality of our cities and that most urban conurbations have a backlog of infrastructure to deliver to meet the needs of increasing populations, greater urbanisation and emerging economies. Just keeping pace with projected global GDP growth will require an enormous investment in infrastructure and skilful leadership to deliver it.

In response to this challenge, professional services firms will need to be well-led and well-managed to be successful and sustainable in the long-term. Such organisations must provide high-value advice, design, knowledge and innovations to get more out of the existing assets and to plan and design new assets with greater integrity and construct them more productively, efficiently and effectively. This book provides practical frameworks for emerging operational managers and future project leaders to prepare them to successfully manage these firms and deliver such projects in the face of new and often disruptive technologies and shifting corporate landscapes.

The book is essential reading for aspiring leaders operating in all infrastructure market sectors including energy, water, sewerage, road, rail, ports, airports, education, health, justice, retail, entertainment, property and development sectors.

1   Introduction

Professional services firms play a vital role in the social, environmental and economic well-being of any economy. This book provides the key success factors for leading and managing a professional services firm operating in the infrastructure sectors. Public- and private-sector clients recognise the role that infrastructure plays in the liveability of our cities and most urban conurbations will have a backlog of infrastructure representing an enormous challenge with increasing populations, greater urbanisation and emerging economies. Just keeping pace with projected global GDP growth will require an enormous investment in infrastructure (Grimsey, 2017).

Consequently, professional services firms are forecast to be high-growth firms of the future. In response to this challenge, professional services firms will need to be well-led and well-managed to be successful and sustainable in the long-term. Professional services firms provide high-value advice, design, knowledge and innovations to get more out of the existing assets and to plan and design new assets with greater design integrity and to construct them more productively, efficiently and effectively. With the advent of new and often disruptive technologies, greater complexity in shareholders’ needs and wants and more demanding shareholders, future success will not be assured by back-casting past practices and behaviours. This book provides practical frameworks for emerging operational managers and future project leaders to climb the learning curve for successfully managing these firms of the future.

The purpose of this book is to leverage the learnings from the last three decades in professional services firms, serving both the private and public infrastructure sectors. In this context professional services mean technical services in architecture, engineering, commercial, legal and any technical advisory services. This book is a compilation of discussion papers, thought pieces and insights from the early 1980s through the peaks and troughs of these market sectors as firms have transitioned from partnerships to large international businesses.

With over thirty-five years of diverse experiences, the author has been a highly experienced leader of consulting and engineering firms with unparalleled experience in the planning, design and delivery of major building and infrastructure projects. Over this time he has developed unique insights into the challenges related to managing a diverse portfolio of projects from consulting, design, project management, to construction services. The learnings presented in this book are evidence-based with industry references. An extensive list of references is provided for a deeper dive into any of the chapters.

While many of these insights are based on Australian experiences and market conditions, the learnings are applicable to all geographies and market sectors as the Australian marketplace exhibits:

•   Multi-sector projects ranging from mega oil & gas and resources projects, to small advisory commissions to government agencies

•   A relatively small market by international comparisons, diverse range of technical services disciplines within the one firm

•   A high percentage of public private partnership (PPP or P3) projects in the delivery of social and transport infrastructure

•   A high percentage of design and construct (D&C) form of project delivery along with alliance contracting, early contractor involvement and other fast-track and accelerated forms of project procurement

•   Often onerous risk allocation from Project Owners.

This book is written in the collective sense as a trusted partner, coach or advisor sitting alongside the reader in a workshop or planning session. It is based on five key tenets:

Strategic Approach: A framework for ‘blue-sky’ thinking for developing emerging businesses, the winning of strategic projects, against the odds and then successful delivery.

Operational Management: Insights into the management of a diverse range of professional services from strategic planning, architecture, project management, all the engineering disciplines to technical services across the civil- and social-infrastructure market sectors.

Project Leadership: Appreciation of the attributes of project leadership based on balancing strategy and governance roles for the teaming, tendering and delivery phases of large and complex major infrastructure projects. This also involves the turn-around of distressed projects, incorporating hard-earned lessons learned.

Risk Management and Governance: Harnessing learnings from all aspects across the project life cycle mitigating risks and harnessing opportunities. The project leaders of the future will be prudent risk takers providing assurance of approach to their project and corporate governors.

Collaborative Relationships: Understanding of the importance of highly collaborative relationships with Project Owners, allied design partners, contractors and related stakeholders. Knowledge that management of diverse professional services firms or leadership of complex major projects requires strong interpersonal skills developing sound relationships based on trust and respect with key people and stakeholders. This forms the basis of developing an organisational or project culture of high-performance.

The application of these five fundamental principles demonstrates that success is achieved through the achievements of a highly collaborative operational management or project leadership team.

Tim Ellis

Melbourne, Australia

September 2017

2 Strategy

Great minds discuss ideas, average minds discuss events, small minds discuss people.

(Eleanor Roosevelt)

This chapter begins by setting the scene as to what a professional services firm of the future would look like in the future, the ‘flag on the hill’ so to speak and the strategic planning to achieve that desired end-state. The term strategy is used in the context of The Art of War (Tzu, 1957) as looking at the long-game and considering the influencers on the future success of the firm. It looks at some of the externalities of market drivers and changes, suggests a process for strategic planning, how to establish a vision for success, concluding with an indicative organisational strategy map.

2.1 Market outlook

With emerging economies, increasing population growth and greater urbanisation, there is a growing demand for public infrastructure to sustain our communities’ well-being and sustainability. There is widespread acceptance that public infrastructure seeds economic development; however, often the supply lags behind the demand, given short-term political drivers and funding. Therein the private sector is taking on greater participation in the provision of public infrastructure. There will be an insatiable demand for faster and more reliable transport infrastructure capturing the value of travel time saved, increased density of urban places and communities and value capture for employment and social well-being, extension of existing infrastructure asset life and asset recycling.

Local and international market conditions are highly uncertain, providing greater uncertainty in the project pipeline. Large infrastructure projects have a long gestation and have a history of time delays and cost overruns. There is increasing risk transfer from Project Owners, often with very onerous risk allocation, often not consistent with Abrahamson’s basic principles of risk allocation to the party best able to manage and control the risk (Abrahamson, 2017). These clients are seeking to transfer greater risks to downstream suppliers, many of these not being covered by insurance, commonly referred to as ‘balance sheet’ risks. Projects are also becoming more complex with often diverse and eclectic stakeholders and third parties. Also many clients are allocating delivery risk to Design and Construct (D&C) contractors, Facilities Management (FM) contractors or Project Managers. This pass-through risk allocation to downstream consultants is often not equitable, placing greater emphasis on heightened risk management and assurance.

So considering the demand and supply sides of the economic equation, the requirements for the professional services firm of the future are likely to be far more challenging. Professional services project leaders and operational mangers of the future will need to have far more developed knowledge, skills, experience and attributes (KSEA) than the past. Technical excellence alone is no longer the key ingredient to success. The core attributes of new graduates will be problem solving, having an ability to collaborate and influence others with the commitment and resilience to respond to the project challenges and therefore achieve desired outcomes.

2.2 The firm of the future

Life is short, art long, opportunity fleeting, experience misleading, and judgement difficult.

(Hippocrates)

It is imperative that the firm articulates what success would look like in the future to engender emotional engagement, commitment and loyalty from all staff. The following is an example of a vision of success.

Longevity is a very powerful brand statement. It not only recognises a portfolio of outstanding projects, being responsive to the changing market conditions and a statement of success, but also it emotes a longer term perspective and a sense of future success. Many professional services firms are launching from a solid foundation of the initial founders and partners (Maister, 1993). However, past success is not a predictor of future success and this chapter provides examples so that professional services can continue to evolve and not become stuck in the legacies of the past.

While we can derive a series of key performance indicators to measure success, this section sets out a vision of what operating a successful professional services firm would feel l...

Table of contents

• Cover
• Title Page
• Copyright Page
• Contents
• List of figures and tables
• Foreword
• Acknowledgements
• List of acronyms and glossary
• 1. Introduction
• 2. Strategy
• 3. The nature of the firm
• 4. Marketing and communications
• 5. Business development
• 6. Winning proposals
• 7. Growth through mergers and acquisitions
• 8. Project management
• 9. Operational management
• 10. Commercials
• 11. Contracts
• 12. Risks and opportunities
• 13. Knowledge management
• 14. People and culture
• 15. Business systems and processes
• 16. How to increase the chance of project success
• References
• Index