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Learning legacyLessons learned from the London 2012 Games construction project

Lessons learned from the London 2012 Olympic and Paralympic Games construction programme

AbstractThis research project has sought to identify the key factors which have underpinned the success of the London 2012 construction programme. The research has focused on the approach taken to the overall management of the programme and the way this shaped the approaches taken to managing individual projects.

It was found that favourable programme outcomes were directly attributable to three ‘headline drivers’: – the rigorous use of five key project

and programme management processes;

– the explicit specification of a series of targets and principles around other key programme objectives (such as health and safety); and

– a pervasive, high-level management philosophy adopted across the entire programme.

These headline drivers were effective because of three critical ‘enabling factors’: – the use of a well-resourced

Delivery Partner (DP); – supportive contractual

arrangements; and – a supportive programme-wide

culture.

Finally, the research identified six ‘supporting factors’ which, in turn,

underpinned and facilitated these enabling factors: – the so-called ‘Olympics effect’; – the ‘health and safety’ effect; – the strong emphasis placed on

personal and organisational development;

– the practice of allowing contractors to work with familiar partners;

– full funding; and – the market downturn of 2008–09.

While some of these factors were clearly circumstantial, many reflected conscious senior management decisions to put in place rigorous, professional, yet flexible, programme and project management.

While each component of the management approach may appear unsurprising, the combination – and the level of execution – proved to be immensely powerful. In addition, it appears that the programme has had a significant impact in raising standards of practice across the UK construction industry.

We found evidence of learning carried forward at the level of individual managers and, at the level of entire construction firms through the adoption of new, firm-wide policies. This aspect of legacy is immensely valuable and should not be underestimated.

AuthorsIan MackenzieSenior Research Fellow, Innovation and Entrepreneurship Group, Imperial College Business School

Andrew DaviesReader in Innovation Management, Innovation and Entrepreneurship Group, Imperial College Business School

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Research objectives, methodology and scopeWith less than one year to go to the Games, the construction programme, which will not only provide most of the venues for London 2012 but transform a huge swathe of east London, has been successful. The £7.2 billion programme is on track to be completed under the detailed budget set in the 2010 spending review a. The safety record is outstanding and other targets (for example, sustainability) have been met. Most important of all, it is being completed on (and in several cases before) time.

This picture is in sharp contrast to the experience of many other ‘mega-projects’ (for example, Denver international airport, Wembley Stadium and the Athens 2004 Games) which have been characterised by cost and time over-runs 3. Whereas many of these other projects have been mired in confrontation between client and contractor, the London 2012 programme has been a testament to collaboration with a remarkably low level of disputes.

Our research aimed to identify what aspects of the programme and project management approach underpinned this success to yield useful lessons for future mega-projects. We conducted 30 in-depth interviews – each typically an hour in length b. The research was undertaken in phases to address the two levels of organisation created to manage such a complex project c: – Programme level: In a first phase

we focused on the management of the overall programme with interviews conducted within the ODA which acted as ‘the client’ for the programme and the ODA’s Delivery Partner (DP), CLM – the joint venture between CH2MHILL, Laing O’Rourke and Mace – which was formed specifically to act as the ODA’s DP. The interviews focused on how the ODA and DP formed an umbrella organisation

and created a consistent process to coordinate and integrate each project within the overall programme.

– Project level: In a second phase our focus shifted to specific projects, including the Olympic Stadium, the Velodrome, the temporary structures, the International Broadcast Centre (IBC)/Media Press Centre (MPC), the Aquatics Centre and the Athletes’ Village. Here, interviews with the ODA project sponsor and the DP Project Manager were complemented with interviews with the relevant Tier One contractor (project director). The interviews addressed the ways in which each individual project fitted within the overall programme, whilst being tailored to meet specific circumstances.

While our main focus was on understanding what led to success, we had a particular interest in the use of innovative approaches to programme and project management – as exemplified by the use of a DP Although the output from each mega-project is clearly unique, prior research has suggested that there is a growing stock of knowledge around how best to manage such complex programmes which is generally applicable 1,4.

This stock of knowledge grows through the use of innovative programme or project management practices which are either developed ‘in programme’ or imported from prior, similar projects or from other industries 2. Also of interest is how learning within a programme is captured for future use – the key objective of the ODA’s learning legacy programme. The section on innovation and learning explores the source of the various management practices used on the London 2012 construction programme and looks at how this is carried forward, while the section on overall lessons provides a summary of key lessons.

a The original Olympic Delivery Authority (ODA) budget, set in 2007, was £8.1bn. This included considerable contingency elements.

b A list of interviews is provided in Appendix 1.c The Games project is an example of the most complex ‘system of systems’ project,

comprised of a variety of systems which must be integrated to achieve an overall goal. These projects are often called ‘programmes’ and structured under a formal ‘umbrella organisation’ (Shenhar & Dvir, 2007: 105).

This research aimed to identify what aspects of programme and project management underpinned the success of the ODA’s construction programme.

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An overall frameworkDetailed analysis of the interviews helped us to develop a framework which identified three ‘headline drivers’ which we believe are directly responsible for favourable programme outcomes. These were the: – rigorous use of five key project

and programme management processes;

– explicit specification of a series of targets and principles around other key programme objectives;

– high-level management philosophy adopted across the programme.

Next, we identified a series of ‘enabling factors’ which allowed these headline drivers to function effectively. These were: – the use of a well-resourced DP; – supportive contractual

arrangements; – a supportive programme-wide

culture.

Finally, we identified a number of ‘supporting factors’ which, while less critical to the primary drivers,

Figure 1: Overall ‘drivers of success’ framework

nevertheless, have made a valuable contribution to outcomes. These were: – the so-called ‘Olympics effect’; – the ‘health and safety’ effect; – the emphasis placed on personal

and organisational development; – working with familiar partners; – full funding; – the market downturn.

Figure 1 illustrates this framework in diagrammatic form.

Headline drivers of successRigorous management processesThe Games construction programme posed three main challenges. The first was the crucial importance of completing construction in a tight, well-defined timescale. The second was the scale of the construction programme, which encompassed over 70 separate projects with very significant interdependencies (common services, site logistics, etc). The third was the wide range of stakeholders that had legitimate influence over parts of the programme.

On time On budget Exemplary safety

Other targets met (eg: Sustainability)

Use of well-resourced DP

Five key management processes

Supportive contractual arrangements

Explicit objectives and principles

Supportive culture

Programme management philosophy

Olympics effect Health and safety effect

Personal and organisational development

Working with familiar partners Full funding Market

turndown

Supporting factors

Enabling factors

Headline drivers of success

Programme outcomes

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Against this backdrop, the familiar ‘large construction programme’ challenges – maximising the efficiency of construction while minimising inevitable problems caused by: – designers or contractors failing to

do what they say they would do; – misalignment between client/

stakeholders and design, between design and construction and between the different pieces of the construction jigsaw; and

– changes caused by inevitable revisions to requirements, construction problems and external factors – took on even greater significance.

It was, thus, essential that there was: – a high level of detailed planning

(both to optimise at the project and programme level and to reduce likelihood of problems);

– a high level of visibility of performance throughout construction (to expose problems and issues at the earliest point);

– a high level of inter-dependency management d (to minimise misalignments); and

– a robust way of identifying and dealing with problems and changes across the entire programme.

Five key management processesOur first headline driver is, thus, the series of five key management processes that the ODA and DP e set up and operated. These were: – Up-front planning process:

A comprehensive ‘baseline’ was developed in 2007 which defined scope, specifications and initial budgets across the entire programme. The resulting ‘yellow book’ provided a valuable tool for tracking progress and changes and was updated (‘the blue book’) in 2009.

– Project and programme monitoring process: Each project was required to provide very detailed information on progress, budget position, future programme, etc. on a monthly

basis. This formed the basis for the DP to review the project (through their ‘assurance’ function) and for the DP to roll up projects to provide an overall programme view f . Monthly trend reviews (involving the ODA and the DP) allowed senior managers to spot trends which might not be so apparent at lower levels. Contractors and the DP were also subject to a very rigorous audit regime. The DP had their own audit function (which would even be auditing the DP Project Management team). The ODA operated an audit, backed up by Ernst and Young. Finally there were periodic government level audits. As one DP Project Manager put it ‘It was like working in a fish bowl’.

– Problem resolution process: The above monitoring process highlighted problems and kickstarted the associated process of seeking solutions – where typically, the DP would seek to work with the relevant Tier One contractor. Whether at the planning stage – or as a result of an unforeseen problem – time was taken to identify, explore and evaluate options so as to work towards a ‘best solution’. An example of this ‘optioneering’ would be the change to the Velodrome roof structure.

– Change management process: This involved identifying any proposed changes at an early stage, a rigorous change approval process (with escalation depending on size of change) and fully documenting changes, together with their impact and their supporting rationale. Any significant change had to be reviewed by a ‘change board’ chaired by the ODA. This process was instrumental in resolving contentious issues before they got to a point where things became confrontational. Also, the tight documentation meant that ex-post payment disputes were all but eradicated.

d We also use the words ‘integration management’ or ‘interface management’ interchangeably.

e At this point we simply acknowledge that CLM was the ODA’s DP. We discuss the use of a DP, and the use of the DP in enabling factors section.

f A reporting matrix called ‘the wall’ was used with one axis corresponding to projects and the other functions. This enabled senior DP managers to identify ‘problem bricks’.

A high level of detailed planning, visibility of performance, inter-dependency management, and robust problem resolution and change control processes were essential.

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– Integration management process: This sought to identify how slippages or changes in one project impacted on others. Integration committees were operated in both design and construction phases. Integration between each project interface and the overall London 2012 Olympic Park infrastructure (which was split into two major areas) was particularly important. Indeed, integration of the various elements of the infrastructure (such as utilities) which represented successive overlays required careful integration.

Taken individually, these approaches were not particularly innovative. What was striking, however, was the level of effort and rigour with which they were pursued and executed.

This was unusual for an industry that is not renowned for embracing formal management processes. Nevertheless, there is little doubt that these processes were instrumental in keeping individual projects – and the overall programme – firmly on the rails.

These processes were not without their critics. Several Tier One contractors voiced frustration with what were perceived as being overly bureaucratic procedures which ‘took resource away from project management’. For example, the need to recast the forward programme each month was criticised in more than one interview. Nevertheless, there was a broad recognition that detailed information was needed to facilitate sound programme management, especially in the context of a highly visible, public-sector-funded programme.

Figure 2: Details of the London 2012 policy values and priority themes

Objectives

Venues

Site platform

Village vertical build

Transport

Operations

Stratford projects

Other projects

Hea

lth, s

afet

y an

d se

curit

y

Susta

inab

ility

Equa

lity

and

incl

usio

n

Empl

oym

ent a

nd s

kills

Lega

cy

Des

ign

and

acce

ssib

ility

Priority themes

Mission To deliver venues, facilities, infrastructure and transport on time for the London 2012 Olympic and Paralympic Games that are fit-for-purpose

and in a way that maximises the delivery of a sustainable legacy within the available budget.

Overarching themes

Time, cost and fit for purpose

Taken individually, these approaches were not particularly innovative. What was striking, however, was the level of effort and rigour applied.

Whilst the priority theme targets were non-negotiable, it was up to each contractor to implement them in their own way.

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Objectives and principles relating to other aspects of performance While ‘cost, time and quality of construction’ were clearly its prime objectives, the ODA had a number of additional objectives that had to be met to achieve broader social and economic impact. Accordingly, at an early stage, the ODA identified six ‘priority themes’ as follows: – Health, Safety and Security – Design and Accessibility – Equality and Inclusion – Legacy – Employment and Skills – Sustainability

The ODA published a ‘strategy’ for each of these themes and detailed specific objectives and principles which the ODA was committed to achieve in the course of delivering its programme of construction. These objectives were cascaded down through the DP to Tier One contractors and beyond. While the targets and principles were non-negotiable, it was up to each contractor to implement them in their own way.

What was crucial was that ODA senior management made it clear that these additional targets were not just window dressing. They were deemed just as important as the traditional construction targets. As a result, they were taken seriously – and achieved – right across the programme.

Particular mention should be made of the Health and Safety theme which was championed right from the top of the ODA. A ‘Park health’ facility was set up whereby everyone on the Park could get health care ‘on-site’. Major emphasis was put on safety through the setting up of ‘safety and leadership’ committees. As a result, the safety record on the Games site has been exemplary, with no fatalities or major injuries to date.

Broad programme management philosophyThe ODA (and by extension the DP) exercised the thoughtful use of ‘loose-tight’ management, where some aspects were tightly controlled so as to achieve a highly consistent approach across the programme, whereas other aspects were loosely managed – which provided for

flexibility. Tightly controlled aspects included the five key management processes (discussed previously), the principles and targets relating to health and safety and the other priority themes (discussed previously) and the kind of behaviours required to underpin the programme culture (in the next section).

This ‘tightness’ made sense partly because of the need for programme-wide consistency (for example, if individual project reporting was to be rolled up to the programme level) and partly so as to reinforce the importance of process, principle or target.

Loosely controlled aspects included how contractors would implement the principles (for example, health and safety) or achieve the targets (priority themes) and the procurement and contract approach to be used for each project. The rationale for the former was that each contractor already had their own way of doing things. Attempting to impose uniform safety routines would probably be counterproductive. Better to provide an objective and challenge the contractor to find their own route to achieving it. Providing flexibility around procurement and contract approaches also made sense, given that projects within the overall programme differed greatly.

While a recognised Tier One contractor under design and build NEC3 C (target price with pain/gain) was probably appropriate for the Olympic Stadium, design-led procurement seemed appropriate for the Velodrome (give the aspiration for a signature building) while the ‘managed package strategy’ was appropriate for the temporary venues given that their somewhat unusual requirements were less attractive to conventional Tier One contractors.

The ODA also exhibited appropriate flexibility when project circumstances changed. The most striking example was where the economic downturn in late 2008 meant that the Athletes’ Village needed to revert to public funding. The ODA renegotiated the contract with Bovis Lend Lease to ‘development management’.

Major emphasis was put on safety through the setting up of ‘safety and leadership’ committees. As a result, the safety record on the Games site has been exemplary.

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Enabling factors There is no guarantee that specifying rigorous processes, setting overall targets and principles and adopting what appears to be a well thought out overall management philosophy will achieve the programme’s goals. Certain ‘enablers’ are needed to ensure that desired outcomes are delivered through proper execution and appropriate behaviour. Our analysis suggests that there were three key enablers:– a well-resourced DP– supportive contractual arrangements– a supportive programme-wide culture

In addition, the procurement approach was changed from ‘all construction management’ to a hybrid approach where over half of the building was procured with a Tier One contractor under a lump sum, Joint Contracts Tribunal (JCT) design and build contract. A further example of ODA flexibility was when ISG, the Tier One contractor on the Velodrome, challenged the incumbent steel roof design in favour of tensioned cable.

The ODA provided time for a proper evaluation and ultimately accepted the switch even though it exacerbated short-term time pressures. Also on the Velodrome, ISG’s contract was changed from target price with pain/gain to fixed price as part of a restructuring where the budget was creating a major problem and the ODA took on the risks associated with resilience and security.

A well-resourced DP– The DP conceptGiven that the ODA was a transitory organisation and that the lead time for getting ‘up and running’ was short, it was always clear that they needed to appoint an organisation to act as overall programme manager. The initial thinking was to contract with a conventional programme manager. However, the ODA’s Chief Executive, David Higgins, felt that the role should be broader and set out to appoint a DP.

Interviewees often found it difficult to draw a clear distinction between ‘programme manager’ and ‘DP’ but most would agree that the latter implies a more dynamic, more pro-active leadership of the overall programme.

The DP evolved over time (see discussion below) but ended up undertaking seven key roles:1. developing/specifying detailed

project and programme management processes;

2. administering the contracts with Tier One contractors or equivalent (for example, involving sign-off and payment authorisation);

3. providing project assurance, for example, checking that things are done – and done properly – on each project; challenging the future programme;

4. providing optioneering and problem solving expertise at the project level;

5. managing the ‘change’ process;6. providing visibility of project

performance to the programme level and collating performance programme-wide;

7. managing the interfaces between the various projects, such as integration management.

Of these seven roles, items 1, 6 and 7 related primarily to programme management, whereas items 2 to 5 related primarily to individual projects. There was, therefore, tight linkage between the project and programme levels.

In addition, the DP provided specific capability when needed. The DP was asked to undertake certain programme-wide functions such as site-wide logistics. At the project level, the DP was able to step in to provide a form of construction management for the temporary structures when it became clear that the conventional Tier One procurement route was not working.

Broadly speaking, the DP faced ‘downwards’ to the various individual projects while the ODA faced ‘upwards’ to the plethora of stakeholders.

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Broadly speaking, the DP faced ‘downwards’ to the various individual projects while the ODA faced ‘upwards’ to the plethora of stakeholders g. This division of roles was generally felt to have been very valuable. Together, the ODA and DP played a vital role in brokering between stakeholders and the contractors when it came to changes in requirements or changes necessitated by a project’s situation. Despite this role separation, it is clear that the ODA and DP worked very closely together (as discussed further below). Overall, the ODA and DP represented a ‘very intelligent client’.

– The choice of the DPThe choice of the DP appears to have worked out very well despite the need to weld together staff from three distinct organisations. Initially, it seemed that Bechtel was the heir apparent to the role. However, the joint venture emerged to offer a novel breadth of programme management, project management and direct construction expertise. The ODA ran a selection process which emphasised (amongst other things) ‘compatibility of working style’ and ‘capability to deal with problems’ and as a result, the DP was appointed.

The DP clearly provided access to a wide range of skills. Less obvious was the notion that the use of a new, purpose-built joint venture created a ‘clean sheet of paper’. This probably fostered a fresher and more objective approach to going about things, whereas a single firm appointment could have imposed an established set of beliefs about how things should best be done.

The appointment of a DP would not have paid off without the funding to fully resource the task. At its peak, DP staffing reached around 600. If the 200 or so staff from the ODA are included, the overall ‘programme management’ cost will come out around 10 per cent of the overall programme spend h. If we assume that the minimum level of programme management would be five per cent, then the issue is whether the extra five

per cent is worth it. Across the programme, the clear consensus is that the extra five per cent has indeed been worth it given the favourable outturn performance.

Supportive contractual arrangementsThe ODA had a clear preference for NEC contracts between themselves and Tier One contractors. NEC3 C was ‘target price plus pain/gain’ while NEC3 A was ‘fixed price’. The most important aspect of these contracts was the requirement to provide transparency of progress, to bring problems or issues to light as soon as possible and to work in collaboration with DP and others to find solutions to problems. While an ‘open and collaborative’ approach can be affected under a JCT contract, there is little doubt that working under a contract that enshrines these behaviours makes life easier.

The contract between the ODA and DP was carefully structured in two regards: Firstly, the DP bid on periodic ‘work packages’ i. The ODA would specify the overall, ‘top-down’ requirements for the period leaving the DP to work through the detail and come back with a ‘bottom-up’ proposal which was then subject to examination and negotiation. This approach ensured that the DP had high ownership of the resulting work packages which reflected bottom-up knowledge.

Secondly, the contract also involved important incentives. The DP opted to put 90 per cent of its margin ‘at risk’, linked to meeting multiple key performance indicators (KPIs). This provided the DP with a huge incentive to meet various milestones and targets and served to align objectives between the DP and the ODA. The KPI approach also provided flexibility so that incentives could be aligned between the DP and Tier One contractors. An example of this was on the Athletes’ Village where relationships between the DP and Lend lease improved once it was clear that success would benefit both.

g Stakeholders span from LOCOG through to various sports associations through to many statutory bodies to Local and central Government.

h Source: ODA Annual Financial Reports.i These work packages were typically let for a 12–18 month period.

Overall, the ODA and DP represented a ‘very intelligent client’.

10%Percentage of the overall programme spend on programme management.

90%Percentage of DP’s margin ‘at risk’, linked to meeting multiple KPIs.

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A supportive organisational cultureIt is well known that formal organisational arrangements (processes, resources, objectives, etc.) can only go so far in driving outcomes. The informal aspect of an organisation, notably a supportive culture, is crucial for driving the ‘open and collaborative’ behaviours that underpin success. The organisational culture that we observed across the programme was indeed supportive in three important aspects j: – a fundamental belief that

‘failure was not an option’ and that everything must be done to make the programme a success;

– a commitment to bringing problems to light at an early stage and striving collaboratively to find solutions;

– a particularly strong discipline around health and safety aspects.

Organisational culture cannot simply be imposed by managements – they develop in response to a number of factors. Importantly, organisational culture is greatly influenced by the pronouncements and actions of senior managers. This culture on the London 2012 construction programme can be traced back to the leadership of the ODA – and other senior managers at the DP or at Tier One

level who, mainly through past experience, held these aspects to be important. Several important influences on the development of this culture are highlighted in the following section.

Supporting factorsWe now describe a series of factors which helped to underpin the enabling factors and thereby, the headline drivers of success k.

The Olympics effectThe fact that the programme was for ‘the London Olympics’ – a very prestigious and high profile event – underpinned a widespread attitude that ‘this programme has to be a success’ and ‘we’ll do what it takes to get it done’. This undoubtedly helped to foster a culture of collaboration across the programme and indeed, is attributed by many for inspiring high on-site productivity. As one executive put it: ‘People were working at least 10 per cent harder than they would normally work’. Some contractors explicitly sought to produce ‘superior performance’, a good illustration being Carillion’s ‘going for gold’ campaign on the IBC-MPC where their supply chain were challenged to‘do the best they could every day’.

The IBC-MPC contractor sought to produce ‘superior performance’ through their ‘Going for Gold’ campaign, challenging the supply chain to ‘do the best they could every day’

j Appendix 2 provides further detail on the culture observed across the London 2012 construction programme.

k The role of technology, though important, is not viewed by the authors as distinctive as these other aspects. A brief summary of the technology deployed is contained in Appendix 3.

The culture on the programme can be traced back to the leadership of the ODA and other senior managers at the DP or Tier One level.

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The Olympic effect also undoubtedly enabled highly experienced managers to be recruited or seconded into the ODA and DP and encouraged contractors to field their ‘A’ teams. The impact of having experienced construction professionals working on the programme – many of whom had prior experience of working together – cannot be overstated.

The health and safety effectMany interviewees cited that the great emphasis put on health and safety by the ODA did more than just achieve a highly successful health and safety record. It made individual workers on site feel that management did, in fact, care about them. This generated commitment which, in turn, inspired greater effort and productivity. If this effect can be substantiated, it has important consequences for future construction management practice.

The emphasis on human resource management and organisational developmentA striking feature of the London 2012 construction programme was the extent of attention and resourcing devoted to providing what might be described as a modern human resource management and organisational development capability. These efforts contributed greatly to the effective working of the ODA and DP – and probably also between the DP and Tier One contractors. It is striking because the UK construction industry is not renowned for being a major advocate of devoting resource to these areas.

This emphasis does, of course, make sense given that the ODA was a new organisation and the DP was assembled at speed by its three parent companies. It is not surprising that there were significant problems in the early days, particularly as the DP sought to define its role, establish a modus operandi and build personal relationships. Several organisational development activities appear to have been particularly valuable in overcoming these problems:

– the co-location of the ODA and the DP over the planning phases of the programme. This was then translated into co-location of the ODA and the DP with the relevant Tier One contractor in integrated project teams during construction phases;

– the pairing of an ODA executive (project sponsor) and DP executive (project manager) across the major projects (and many smaller projects). Again, this was extended to include pairing of the DP Project Manager with the Tier One Project Director in the construction phase;

– the proactive management of skills requirements. This involved determining what skills were required, identifying skills gaps and finding ways to bridge the gaps. It included the running of training workshops, including team building exercises and rigorous performance appraisal;

– the provision of coaches for senior executives and specialist facilitators for workshops;

– a strong emphasis on internal communication to aid awareness of how the programme was going, to reinforce key messages and to foster pride l.

Two further aspects are worthy of special note: – If it became clear that an individual

was not well suited to a particular role – perhaps simply because of personal style issues – then changes would be made. Proactively getting ‘the right person in the right position’ was cited on many occasions as critical to fostering the right working relationships and embedding the open, collaborative culture. A specific example of this principle was the appointment of a Chief Executive for the DP who was not from any of the three parent companies. This, in retrospect, was a very helpful move as inevitably there were tensions within the DP, where parent company practices or cultures clashed. The appointment of someone who was seen as more independent and ‘above the fray’ helped to defuse these tensions and set common directions.

l Much effort was also put into external communications with stakeholders and the general public.

A striking feature of the construction programme was the emphasis placed on human resource management and organisational development capability.

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– The running of workshops to discuss how the organisations and the culture were developing and to seek consensus around issues and solutions. Many interviewees credit these for achieving and maintaining a close alignment of the ODA and DP over time. Informal weekly ODA-DP management meetings were set up to foster openness and collaboration. As a result, trust and confidence built up between key individuals from each organisation. In the early days, each organisation would have its own formal monthly management review meetings. However, over time, representatives from the other organisation were invited along so that the level of openness (and hence, collaboration) increased still further.

This emphasis on proactive human resource management and organisational development would not have succeeded without the support of top ODA and DP management. This support was made explicit through the endorsement of a ‘People Strategy’ in 2007 which was prepared (and implemented) by the ODA and DP human resources teams.

Working with familiar partnersSeveral of the Tier One contractors interviewed stressed the role that ‘working with familiar (supply chain) partners’ had had in achieving good project outcomes, the rationale being that the value of established personal relationships in resolving problems and issues outweighed any loss of competitiveness in bidding. In some sense this is controversial in that EU procurement regulations require open bidding. However, it is clear that the ODA and DP were sympathetic to the ‘relationship’ argument and generally tried to support the preferences of the Tier One contractors.

Full fundingAlthough it is difficult to come to a truly objective view, the consensus from our interviews suggests that

the London 2012 construction programme was indeed funded to a ‘good level’. This is not to say that there was money for whatever the stadia designers came up with. There were, in fact, clear limits on the funding available for the stadia, which in some cases led to serious redesign to meet the available budget. The important point, in our view, is that there was sufficient funding to allow for the: – deployment of a well-resourced DP

(as discussed already); – rigorous implementation of the

range of ‘best practice’ programme and project management processes and tools as described already;

– adoption of a proactive approach to human resource management and organisational development (for the ODA and DP).

The full funding may also have assisted the recruitment of top calibre construction executives though, as mentioned, working on the London 2012 construction programme was a great attraction in itself.

The market downturnAny discussion of ‘key success factors’ would be incomplete without acknowledging that the market downturn from the second half of 2008, induced by the global financial crisis, helped financial performance because contractor and raw material prices declined. This was in sharp contrast to the ‘heated’ construction industry that was prevalent in the early years of the programme.

Of course, the downturn created problems in terms of the loss of private funding for the Athletes’ Village and the IBC-MPC. However, in both these cases, the switch to public funding triggered a reappraisal of design which, in turn, led to reduced cost schemes. A specific example of the impact of the market downturn comes from the IBC-MPC where ‘the overall cost of the scheme was reduced from £350m to £300m on account of procurement savings’.

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Figure 3: Learning and transferring knowledge

‘Learning from outside’ events and experiences (such as other projects,

consultants and industries)

‘Learning within’ experiences and innovation

generated within a mega-project

‘Capturing and transferring learning’

learning, capturing and transferring knowledge gained to subsequent mega-projects

Innovation and learning on the London 2012 construction programmeOur research employed a simple model (see Figure 3) which recognises that learning and transferring knowledge has three components: – the introduction (to a mega-

project) of novel approaches from outside the project, whether from previous mega-projects or from other industrial sources;

– learning and innovation that takes place within a particular mega-project;

– activities aimed at capturing the learning from a mega-project so that the innovations can be reused on future projects.

Examples of ‘learning from outside’Throughout our interviews, we came across examples where the use of a particular management approach or the advocacy of a desired aspect of the culture was attributed to a key individual. These individuals brought into the programme both their past experience of ‘what drives success in major projects’ and an ability to assess what was needed or was appropriate in the particular circumstances of the Park programme. Examples would include: – Culture of collaboration from

David Higgins – Proactive ‘optioneering’ from Mark

Reynolds (MACE) – MIS dashboard from Ian Galloway

(Bechtel, CTRL experience) – High health and safety standards

from Ian Galloway (Bechtel/oil and gas experience)

– Rigorous programme assurance processes from Richard Rook (LOR)

Previous UK mega-projects such as Heathrow Terminal 5 and the Channel Tunnel Rail Link were repeatedly mentioned as important sources for the learning brought in by these individuals. In parallel, the Director of Construction proactively sought to engage advisors with hands on experience of preparing for previous Games to ensure that the pitfalls were avoided and that the ODA and DP could take on board previous experience.

Examples of ‘learning from within’While the programme and project management processes described earlier in this research paper were not new per se, there was no doubt considerable learning and refinement that took place as they were developed and operated. There were many examples of process learning, such as moving from a 40 strong/four hour ODA-DP monthly review meeting to an eight person, 1.5 hour meeting as familiarity and trust developed.

The value of using a DP drawn from multiple companies produced considerable within-programme learning including: – the value of having a broad range

of skills and capabilities available (to provide flexibility in role); and

– the need to provide time for the new organisation to ‘shake down’ for ‘the right people’ (those who could operate in an open, collaborative culture) to be identified.

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Finally, some of the Tier One contractors gained their first exposure to NEC3 contracts – with their requirements for open, collaborative behaviour – and had to learn to work under what was an unfamiliar regime. These contractors no doubt gained a variety of knowledge and experience from their participation and resolution of challenges encountered in the different projects.

Examples of ‘capturing and transferring learning’ – ODA’s Learning Legacy Initiative

The ODA has clearly made a major effort to codify learning, at various levels, and make the knowledge available for subsequent mega-projects: – Lessons learned: Lessons captured

at 70 per cent and 90 per cent completion as part of the normal project process. Some already documented.

– Micro-reports: One to two page reports documenting innovations completed by contractors, designers, engineers, DP, the ODA.

– Case studies: 3,000-word studies on various learning topics. Completed by industry, for example, the Institute for Sustainability doing something on waste, or produced internally and peer reviewed by industry experts.

– Champion products: Templates, tools and documents that could usefully be applied to other projects.

– Research projects: More detailed studies by external parties. This paper is a summary of a research paper and fits within this category.

It is also worth mentioning that the programme and project management processes and procedures developed specifically for the Games have been comprehensively captured in the Project Document Management System (PDMS).

– Individual and corporate carry forward

This kind of ‘codification’ approach can make a significant contribution. However, at the end of the day, the most powerful mechanism for carrying forward learning is almost certainly when it is carried in the heads of key individuals – or where it becomes part of the DNA of an organisation, such as the efforts by senior managers involved in the Olympic Stadium project to encourage McAlpine to adopt health and safety processes on all the firm’s future projects.

Overall lessonsIn seeking to identify the most important overall lessons from the London 2012 construction programme, we must recognise that no two mega-projects are the same and that programme-specific characteristics will inevitably shape the appropriate organisational structure and management style. For example, the London 2012 construction programme contained a wide variety of individual projects (requiring a flexible approach to project procurement and contracting), whereas Heathrow Terminal 5 represented a much more integrated and standardised set of processes. Nevertheless, we believe four key lessons can be identified: 1. invest in comprehensive project and programme management

processes;2. find a way to create an intelligent and broad-capability client. In

the case of Heathrow Terminal 5, BAA were already strong – and seconded in certain staff to boost their capability. Here the appointment of a DP with multiple capabilities appears inspired;

3. secure ‘full funding’ (having a realistic programme to work from helps to create the right culture from the off);

4. invest in human resources and organisational development – to build skills, relationships and a supportive culture.

The learning legacy aims to make the knowledge available for subsequent mega-projects.

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References1 Davies, A., Gann, D., & Douglas, T. (2009). Innovation in megaprojects:

systems integration at Heathrow Terminal 5. California Management Review, 51(2): 101–125.

2 Dvir, D., & Shenhar, A.J. (2011). What great projects have in common. MIT Sloan Management Review, 52/3: 19–21.

3 Flyvbjerg, B., Bruzelius, N., & Rothengatter, W. (2003). Megaprojects and risk: an anatomy of ambition. Cambridge: Cambridge University Press.

4 Shenhar, A.J., & Dvir, D. (2007). Reinventing project management: the diamond approach to successful growth and innovation. Boston, Massachusetts: Harvard Business School Press.

List of interviews – Carline Blackman, Head of Organisational Development, CLM

(17 November 2010) – Louise Hardy, Infrastructure Director, CLM (17 November 2010) – Ken Owen, Commercial Director, CLM (24 November 2010) – Mark Reynolds, Deputy Programme Director, CLM (25 November 2010) – Ian Galloway, Programme Director, CLM (1 December 2010) – Simon Wright, Director of Utilities, ODA (1 December 2010) – Ken Durbin, Technical Services Director, CLM (8 December 2010) – Alison Nimmo, Director of Design and Regeneration, ODA

(8 December 2010) – Richard Rook, Director of Construction Integration, CLM

(15 December 2010) – Hugh Sumner, Director of Transport, ODA (15 December 2010) – Michele Owens, HR Manager, ODA (1 December 2010) – Howard Shiplee, Director of Construction, ODA (15 December 2010) – Jason Millet, Venues Director, CLM (2 February 2011) – John Armitt, Chairman, ODA (9 February 2011) – Alice Coates, Marketing Strategy, ODA (9 February 2011) – Tony Aikenhead & Chris Hall, Stadium – Project Director, McAlpine

(17 March 2011) – Richard Rook, Stadium – Project Manager, CLM (17 March 2011) – Simon Birchall, Athletes’ Village – Project Manager, CLM (28 March 2011) – Mark Dickenson, Athletes’ Village – Project Director, Lend Lease

(28 March 2011) – Alan Bates, Athletes’ Village – Project Sponsor, ODA (28 March 2011) – Dean Goodliffe, Velodrome – Project Director, ISG (31 March 2011) – Davendra Dabasia, Velodrome – Project Manager, CLM (31 March 2011) – Colin Naish, IBC/MPC – Project Sponsor, ODA (6 April 2011) – Tony Coyle, IBC/MPC – Project Sponsor, T1 (6 April 2011) – Danny Richards, Basketball – Project Manager, CLM (10 May 2011) – Dave Coulson, Basketball – Project Director, T1 (10 May 2011) – Richard Arnold, Basketball – Project Sponsor, ODA (10 May 2011) – Michael Lytrides, IBC/MPC – Project Manager, CLM (22 July 2011) – Ian Crockford, Aquatics – Project Sponsor, ODA (4 August 2011) – Stuart Fraser, Aquatics – Project Director, Balfour Beatty

(5 September 2011)

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Appendices Appendix 1: Organisational cultureCulture encompasses widely held assumptions which drive people’s behaviours – which can be norms (accepted ways of behaving), values (what is deemed to be important) or beliefs (what people believe about how things work). The table below shows some of the main aspects of the culture on the London 2012 construction programme that we discerned from our interviews:

Beliefs – Failure is not an option – We can/will solve problems

Values – Making a success of the programme is very important – All the major objectives (cost, time, quality plus the priority

themes) are important

Norms – Bringing problems or issues to light is normal/good – Collaboration is normal/good – Working non-hierarchically (such as horizontally) where

appropriate

Perhaps the main feature to highlight is the highly collaborative culture which extended across the entire programme. Within this culture, the cardinal sin was not running into difficulties but not disclosing that the difficulties were there and not working to find a solution.

Appendix 2: The role of technologyThe key management processes were facilitated through a series of ICT systems, for example: – Prima Vera contract management system – GIS (single model system) – PDMS (processes, policies) system

The use of these systems was generally viewed as being necessary but quite commonplace. None were viewed as being particularly innovative. Overall, technology was viewed as an enabler but not a key reason for success.

© 2011 Olympic Delivery Authority. The official Emblems of the London 2012 Games are © London Organising Committee of the Olympic Games and Paralympic Games Limited (LOCOG) 2007. All rights reserved.

The construction of the venues and infrastructure of the London 2012 Games is funded by the National Lottery through the Olympic Lottery Distributor, the Department for Culture, Media and Sport, the Mayor of London and the London Development Agency.

For more information visit: london2012.com/learninglegacy

Produced in association with:

Published October 2011 ODA 2011/269