Case Study

DELIVERING A CRITICAL, £100M+ PROGRAMME TURNAROUND, TO AVOID CONTRACT TERMINATION, RETAIN JOBS AND DELIVER BUSINESS GROWTH.

A year into a technically demanding, complex programme delivery, a Defence Prime was facing a formal letter of intent of contract termination from the UK Ministry of Defence (MOD).  Unless issues were resolved and turnaround was achieved within a 3-month period, the termination decision had been cited based on lateness, and the lack of confidence in future delivery.

The loss of the £100m+ contract would have had a significant financial impact, not only on future revenue of the Prime, but also on the cost spent to date.  Jobs would have almost certainly been lost, and the reputational damage would have made it difficult to secure future work in the parts of the MOD. 

Background

Day 1 People (D1P) were brought in as independent consultants by one of the Prime’s senior leadership team, as a trusted resource, having just successfully delivered the Capture and Bid Management of a complex, multi-company opportunity.

The Prime had witnessed first-hand how we operated across multiple companies, in a programmatic manner, clearly considering future delivery, not just winning the Bid.  We had also demonstrated being able to navigate competing priorities across the organisation and finding solutions.

Although the Prime had a limited history of delivery in the UK, this being one of their first major UK programmes, they were selected because they offered a solution that was going to be built on operationally proven technology elsewhere, at a competitive price.

Problem Statement

This complex programme had supply chains across multiple countries, major defence companies and multiple end users, each with varying aspirations and agendas.

Technical challenges were driven by the cutting-edge nature of some requirements, versus the need to integrate with legacy systems, whilst balancing an incompatible set of demands from the contracting authority.

Unsurprisingly, a breakdown of both personal and organisational relationships occurred, because of the status of the programme, when co-operation was truly needed to find a way through the issues.

Adding to the above, the regulatory environment was onerous as it straddled a wide range of Safety, MOD, NATO, ITAR and Security regulations that were not always mutually compatible and had significant penalties for non-compliance.  

Our Approach

D1P we were brought in to fulfil a Chief of Staff role, supporting activities across all the Prime Contractor functions, reporting to the executives as well as carrying out the indirect line management of people.

With full reign to analyse the needs of the programme, recommended actions were taken, including a separate line into MOD as communication would play a significant role in the success of the programme.

Establishing two work streams, the first addressed the relationships, communication and perceptions within the Prime and the MOD, with the second focusing on the contract and schedules to build a comprehensive picture of the deliverables, acceptance criteria, dependencies and requirements. 

Using the latter to test against the then extant plan and schedule, compared against the stated expectation from the MOD, this exposed a range of inconsistencies, the sources of tension. This helped us to understand the root cause: that each party did not have a back-to-back understanding of the contract.

We rectified this incrementally, so that a joint understanding was reached issue by issue that grew trust and made subsequent issues less contentious. The engineering teams were central to this as the complexity meant it was difficult for some non-technical people to make judgement calls if their engineers were not aligned.

We deployed our SEQP (Chartered Accountant / Engineer / Director etc) with experience of operating at C-Level in major corporates as required. We managed all the resources to cost and time through ruthless prioritisation of activities to hit the clear 3-month deadline and success criteria, which consciously resulted in subsequent phases of the programme needed to be re-modelled to compensate. 

Our Findings

There were fundamental differences between the procurement and delivery processes and commercial expectations across different countries that had not been considered.

Lack of understanding and disagreements regarding budgets for a range of the activities and deliverables meant that parts of the UK organisation, and its foreign parent company, allocated inappropriate budgets for poorly defined scopes of work. 

In some cases, scopes were redefined to meet the budget rather than the contracted requirements, extending the scope that had been sub-contracted, making it necessary to cancel one order and source another supplier.

The Prime had hoped that their reasonable and pragmatic approach would win through, and as a result, they kept their programme lead for too long from a client facing perspective.

Confidence in the intentions of others was low, and it took persuasion to get comprehensive engagement from all parties.  We needed to create and implement a credible improvement plan despite how uncomfortable it felt.

Our Solutions

We rebuilt the relationship with the MOD, jointly creating a Charter which was then reviewed (initially weekly) as trust was embedded.  The Charter established not only soft values but the hard value for a genuinely collaborative relationship based on ISO44001 principles and built the foundation of the key relationships that required changing.

Increasing trust through sharing of data and openly discussing issues from both perspectives led to compromises that unblocked progress.  We achieved this through an anonymous survey to identify themes and issues, the recognition of which and the willingness to address, aided internal culture and behaviours.

Creating a new bottom-up build of the contracted deliverables, broken into work-packages with clear requirements mapping that covered 100% of the contract, enabled us to compare the top-down budget and create a heatmap highlighting where problems existed.  This was the new baseline that enabled teams to have clarity on what they had to deliver.

Producing a much clearer RACI, allowing people to focus on the right things and avoid distractions produced a situation where finances between the MOD and Prime were clearer, previously a critical source of tension, as either party could have incurred additional costs depending on which interpretation was made.

Conclusion

Whilst some of the issues, such as the breakdown in relationship between the Prime and the MOD were known, it took too long before they were addressed.  There were also technical, intercompany and cultural issues that had not been immediately obvious to all parties.

Technically a way forward could be found to produce a good solution for users, but the entrenched positions meant that the contract would have be cancelled.

However, within weeks we had gained trust, and within 4-6 weeks we had started to make agreements and compromises.  There was relief, and a renewed sense of purpose, that a good capability could be delivered in a collaborative manner.

D1P used its track record of success from across sub £1m to multiple £100m businesses, acting as internal and external consultants with the ability to analyse problems and make the recommendation for improvement to operations and programmes.

The threat to cancel the contract was removed and resulted in contract growth the following year.