We need to talk about Carillion

Last week I did a presentation to forty Project Managers about Deep and Deliberate Delegation. My aim was to show how they could unleash talent around them and win back their time. The first word in my presentation was Carillion.

To explain the relevance of delegation in a project setting, we need to talk about Carillion for a minute.

What I’m interested in here are the spaces that always exist between the formal project controls that look so watertight on paper. These spaces are human relationships, and it’s where error breeds.

It seems from what I have read in the press, Carillion was holed below the water line by big projects that went wrong. They drained cash and pushed its debt levels through the roof until the board couldn’t hide it anymore.

Though apparently not everyone was fooled by the rosy financial reports. One investor, Standard Life Aberdeen, could see 1) Carillion’s widening pensions deficit, 2) its growing debt, and 3) its weak cashflow, and started unloading shares way back in 2015.

They put their concerns to the Carillion board in meetings over several years, but never got any sense that the board appreciated the situation, or were willing to tackle the issues.

By the time Carillion revealed an £845 million black hole in its finances in July 2017, Standard Life had disposed of all its shares. Not everyone was so lucky.

One of those problem contracts was the Royal Liverpool University Hospital. In November 2016 they discovered cracks in two integral concrete beams. They were so serious they had to stop work and set up exclusion zones in the floors above and below, until emergency supports could be installed.

Then they discovered 12 more defective beams. Five of them were so compromised they could have failed under the load of a fully operational hospital. This is what the project’s client told MPs in the parliamentary investigation into Carillion’s downfall.

Imagine a floor of a hospital collapsing.

Three separate companies were responsible for the design and installation of those beams. We don’t know exactly where the fault lies, but somehow a catastrophic error crept into that element of the project.

What we do know is that formal project controls and defined contractual accountabilities are poor guarantees of project success.

Things go wrong. Error creeps in.

If a contractual mindset takes hold, those errors escalate and compound because everyone retreats behind their barricades to minimise their own risk. When this happens, a project is doomed.

Project leaders must look beyond project controls and spot the onset of project risk.

That could mean error visible to the eye, but it could also mean something more intangible: the growth of a culture in which error can breed.

Conflict. Negligent attitudes or behaviour. The beginnings of substandard outcomes. Signs of actors scuttling into positions of selfish risk aversion.

When they spot this, project leaders must respond skilfully, imaginatively, thinking out of the box.

I think of it as “Internal Project Entrepreneurship”. It’s when leaders launch projects within The Project, to keep The Project on track.

But you can’t do everything, and this where delegation comes in.

You must enlist help. You are accountable, absolutely, but you need to propagate that same accountability in someone else who can do the thing that needs doing, because you can’t do everything yourself.

Here’s an example. Say a subcontractor is struggling with a bit of project software, but is reluctant to admit it, and it’s causing friction. It’s an error breeding ground.

Something like a diplomatic mission is needed to engage with the subcontractor, to defuse the situation, to save the subcontractor’s face, and get them to use the damn software correctly.

Nobody planned for this, and it’s unusual, but it has to be done. You could do it, but it’s a complex outcome. It requires care, tact, determination and lateral thinking.

Meanwhile, you’ve got equally pressing things to be getting on with.

So, a competent person must be enlisted to make this thing happen. This needs deep and deliberate delegation

1 Comment

  1. Stuart on 28th November 2018 at 6:40 am

    Frankley……

Leave a Comment