This £175m construction group, founded just 10 years ago, started as a Mechanical and Electrical (M&E) contractors and had, until April 2008, traded as one company. At this point, the group was split into three quite distinct and separate operational companies:
• Construction – £130m
• M&E – £40m
• Security – £5m
In order to develop further and to broaden the client base, the construction company now wanted to:
• Improve the working processes
• Gain access to public sector works for which the ISO 9001 quality management standard was required
• Create a continual improvement culture
he head office is in Surrey with a further 6 regional offices across the country.
The construction company is structured as follows:
• Three group directors each of whom has a daily involvement with the construction company
• Three construction company directors
• Associate directors
• There are then 7-8 teams, each of which works on a range of projects
There are about 100 management staff in total and the trade skills are all sub contracted.
It was commented that “the company has ‘toyed’ with quality management and ISO 9001 in the past, and has even had an in-house chap who was half way to implementation”. It is believed that the systems developed are “possibly overcomplicated”. There are, however, two clear elements where the work is 95% and 50% complete namely HR procedures and project procedures respectively.
It was also commented that the company tended to adapt procedures to suit the needs of the client’s organisation. Consequently, “if a single system were created, within 2 to 4 years it would have diverged again to suit specific client requirements”. At this point it was explained that Statius has previously worked with organisations where new systems were designed for every project; a set of core procedures and forms were modified for each different project. A similar approach could be employed here.
Other useful comments were made about existing systems and these have been reproduced below:
• “Health and safety, we’ve cracked it – we do plan, we do review and it works well”
• “The other systems are not necessarily doing that well – supply chain management, project close out, commercial activities could all be improved”
• “We have the makings of environmental procedures”
• The IT system is based on a system called COINS (“which is very much accounts biased”). There is also an intranet, “which is where our systems are meant to sit”.
The objectives for the potential project were articulated as being:
• “We want the 9001 certificate on the wall but we also want to make sure the people understand, like and use the systems that sit behind it”
• “We want someone to hold our hands and get us to where we need to be in a short space of time.”
In the initial instance, the objective is to concentrate on obtaining the quality management system ISO 9001. However, the decision was taken to ensure the procedures were developed in a way that 1) reflected the company’s existing activities and 2) could be easily integrated with the environmental management system, ISO 14001, and the health and safety management system, OHSAS 18001 at a later date.
A team of people from across the office and the hierarchy was assembled as the implementation team.
At the first meeting, there were three objectives:
1. To identify the purpose, or the intent, of the company with regard to the benefits or capabilities that the company’s services provide to their clients
2. To identify and sequence the key value adding activities so that these are detailed in a “systems diagram”. The systems diagram is essentially a clear representation of the whole company on which the entire management system should be built. This diagram would include links to the strategy, strategic and operational key performance measures, marketing materials, policies, procedures, legal compliance, assets, facilities and infrastructure.
3. To identify areas for further development within the existing systems
To get participants into ‘systems thinking’ immediately, the first workshop started with the famous red bead experiment.
Very quickly, the participants began to see the advantages of understanding the organisation as a system and the development of the systems diagram as opposed to a family tree. With a systems diagram, the work flows through the system and effort is focused on delighting the customer, whether that is an internal customer or the customer paying for the products or services provided.
The first draft of the system diagram is shown below, however, this was refined throughout the implementation of the project, at the higher level the most notable change being the splitting of the operational / project role and the commercial activities so that the procedure structure reflected the different roles and associated KPI’s could be developed for each. The three diagrams below show:
• Diagram 1 – The second draft of the systems diagram with separate project and commercial procedures
• Diagram 2 – The intranet page showing the core value adding activities
• Diagram 3 – The intranet page showing the various ancillary activities
Diagram 1: The original holistic systems diagram and the company’s “intent”
Diagram 2: The intranet site home page showing the core value adding activities
Diagram 3: The intranet site home page showing the remaining activities
The way forward
The systems diagram was used to establish the framework for a documented management system that would meet the requirements of the prestigious and internationally recognised quality management standard ISO 9001.
However, more powerful was the fact that the initial diagnostic uncovered a number of critical issues that also needed to be prioritised and addressed. A decision was then taken that some of the issues would be addressed as part of the management system implementation processes whilst others were to be saved for future improvement projects.
A sample of the issues raised included the following, for each of which a business case was developed.
• The senior management team urgently needed to clarify its vision for the future.
• To align both people and processes with the vision and associated aims and objectives, a robust business planning process needed to be put in place without delay.
• A system needed to be established to optimise the whole delivery system against the benefits and capabilities delivered to the customer. This will mean developing a performance measurement system that aligns with the documented management system.
• In order to stop different teams making the same mistakes, a process of sharing best practice needs to be established in order to capitalise on the team to team learning process.
• The company is sometimes unpleasantly surprised when it realises the full implications of the contractual agreement. As a result, the contract administration processes needed to be fundamentally re-developed to ensure that the contractual risks are fully appreciated at the start of a new contract.
• Significant sums are being lost due to poor retention management practices. Systems needed to be developed to stem these losses.
• Significant sums of money could be saved by more vigilant management of on site processes, for instance pre-condition management, plant hire, skip hire and purchasing.
• Robust systems for managing, escalating and reporting risk needed to be created in order to ensure top management understanding and transparency of information.
On completion of the documentation project investment was made in an externally hosted internet site where all the policies, procedures, flowcharts, forms and supporting materials where hosted as shown in Diagram 1 and 2 above.
Given the success of the project Statius were then invited to integrate the construction company’s ISO 9001 system with a system for the entire Group which met the requirements of the environmental and health and safety system covering.