2016 and all that!

“2016 and all that”: What just happened, and what’s next?

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At this time of year, most companies do some sort of “look back at the year just gone, and a look ahead to the coming year”. I’m probably not the only MD to be sitting at his desk, rubbing his eyes in disbelief.

Twelve months ago, the idea that we would be on our way out of the EU (probably, sort of, maybe, in some way, eventually), that the outsider candidate would win the Presidency, and the idea that our borrowing targets would be out of the window – well, it’s all faintly surreal.

Where does that leave us? Well, Christmas Eve marks exactly six months since we emerged into the realisation that Brexit was happening. I wrote a piece then about the effect of Brexit on major infrastructure projects, and called for strong leadership.

Since then, the inevitable complexity around Brexit, a weak official opposition and the very public infighting throughout the Tory, Labour and UKIP party systems have meant that unpredictability and risk are ever greater in the public and corporate spheres. Is HS2 going to happen? It’s not a dead cert yet. How about the Third Runway at Heathrow? Yes. Unless it’s no. Or becomes a bridge… (as I write, Zac Goldsmith has become the latest once popular MP to get a drubbing from his community).

Public sector clients and Primes, the major construction companies, are going to become more risk-averse. They will want to insulate themselves from shouldering financial obligations – particularly faced with a suddenly volatile pound sterling. In the words of one of our clients, “Next year will see the real austerity measures begin to show on construction projects. Delayed and cancelled projects will have a palpable impact as old projects end and fewer new ones start. The theme will be a year of establishing a new definition for what is ‘essential’”.

And down at the lowly sub-contractor level, well, many of these worry that Brexit will end up with the repatriation of the majority of their workforce at a stroke. (I don’t believe that this will happen, but the fact that people’s livelihoods are being used in a game of political chicken at a continental level cannot fill anyone with confidence). As one of our clients said, “For many if not all London based infrastructure projects, Brexit present a huge resource risk. If free movement of labour reduces, or looks increasingly like it will, we will see non U.K. Nationals likely to look elsewhere for work. We already face a huge challenge to have the skilled resources we need to do many construction and project roles. Any further pressure means higher market rates and project delays until a new skilled workforce can be developed. That’s not a short term fix and requires serious investment.”

If that sounds full of doom and gloom, well, it’s certainly true that we live in times of change. And unpredictability tends to spook markets. Equally, unpredictability also represents opportunity. Here are a few predictions for 2017. I’ll eat my hat if they all come to pass within the next 12 months, but I’m pretty convinced that the thrust is right. Do get in touch to let me know what you think!

  • Brexit won’t resolve: This is not a short-term process, even if Article 50 is triggered on schedule. It is in no politician’s interests to simplify or clarify on the Brexit issue, and business must readjust and get used to it. We’re working with our clients to extract more value from existing activity and to develop a thicker operational security blanket.
  • A new wave of technology is coming: 2017 will see more exciting technologies reach maturity than have been seen for a generation. In our sector, big data capability is starting to demonstrate real efficiencies through BIM (which is also generating more predictable operational outcomes and blurring the lines between build and run). Augmented reality holds further promise on-site, and nanotech/materials science are also on the brink of exciting advances in construction. Technology is also revolutionising employee engagement – our partnership with Sideways 6 is part of a broader trend towards always-on connection in the workplace, particularly on mobile.
  • The team is the new fundamental unit of work: When I say technology will connect us like never before, I want to go into a little more detail. We have said over the past couple of years that “The age of efficiency is over”. You can’t cut your way to profitability, you can’t bully more efficiency out of your existing employees and you can’t reduce headcount further and expect other employees to take up the slack. Because there is no more slack. However, we still find that there are huge untapped reserves of skill, goodwill, motivated contribution and professional experience in almost every team or department. These reserves remain untapped because the past decade’s ‘death by a thousand cuts’ doesn’t encourage people to be valued. It doesn’t encourage managers to listen to their staff. It doesn’t encourage line managers to stay in role long enough to take responsibility for their own decisions or to gel with their teams. We work with our clients to mine that rich seam of expertise and goodwill, and I’ll be more than glad to open a conversation with you about the bigger picture of engagement and motivation. But for the purposes of thinking about the next 12 months, how about this distillation: teams are what matter today. Individuals can’t hope to have enough expertise to get a project done by themselves, yet employees are more fluid in their loyalties and professional engagements than ever. Management structures are flatter, too. We think it’s time to see the team (or group, or department) as the fundamental unit of economic contribution. Teams are small enough to work effectively and connected enough to unlock that collaborative goodwill. And a blend of technology and good management practice can make this promise a reality.
  • Accountability: Finally, smart companies are going to see accountability as a commodity in its own right. When times are unpredictable, we have all the more respect for a “safe pair of hands”, the safe harbour in choppy seas. Whether a giant corporation or an individual, being the one who does what they say they’re going to do, and taking end-to-end responsibility for outcomes, is going to be highly valued. With our clients, we are therefore putting renewed effort into back-office effectiveness: communication, governance and record-keeping, PMO professionalisation are all high on our agenda.

I wish you a prosperous and interesting 2017. Things won’t be the same; but they don’t have to be worse. It is our duty to react to current circumstances; and it’s a failure to respond which would be both negligent and detrimental to business.

 

nick“2016 and all that”: What just happened, and what’s next?

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