Writer's Block

 I need to write more.  A combination of writer's block and laziness is my current excuse. More incoming in due course. Topics, I am working on;

1. Circular economy

2. Reuse, repurposing, refurbishment

3. Public and Social value.

4. Corruption and Ethics

5. Localism

6. Spoiling a good walk.

7.  Anything, I can be bothered commenting about.

That was 2020 !!!

 At the start of 2021, a moment to pause and reflect on 2020.  I started with the idea of writing and commenting on the subjects and things that interested me in 2020.  My best laid plans were unfortunately disrupted. I suppose that many people were in the same position. How do you reflect on 2020? The pandemic is not over, so is it tempting fate to reflect on what was good and what was bad.

There are things to be grateful for;

• My nearest and dearest are still healthy. I have thus far avoided the virus. Most of my friends seem to be in a similar position.
• I still have my job.  I still enjoy what I do but in different circumstances. It seems my employer has been far more generous and understanding in comparison to many others.  I have good colleagues and students.
• I avoided commuting which has been a revelation. I did not realise how much commuting can drag you down.
• I was lucky enough to live in a great place and community.
• I became a better cook.
• Material things do not matter as much.
• Decent mental health and happiness.
• New and old heroes.
• Realising that I am bad at taking up new hobbies.
• A decent amount of good weather last spring and summer.
• Smiling people exercising. 

There are things to be sad about;

• The appalling loss of life.
• The inability to physically be with your nearest and dearest.
• The restrictions and change in lifestyle.
• Political failure to deal with the pandemic.
• Corruption in dealing with the pandemic.
• The selfishness of a minority of people.
• Exceptionalism and selfishness.
• Missing watching live sports and meeting friends.
• Conspiracy theories and fake news about everything.
• Feeling like groundhog day
• Being alone.

Both these lists could go on.  For those of us that are adaptable and resilient, we carry on. However, we need to take care of those that need our help and care. It is the small things that make a difference. 

Let us look forward to the new year with hope and optimism.   

Outsourcing and the services business model in construction

The construction industry in the UK has been through some turbulent times recently. The recovery from the impact of the 2008 downturn is not complete. The country voted to leave the EU and has created uncertainty for business development. The PFI and PFI 2 systems have been challenged and in some cases discredited. The privatisation of the railways and water sectors have not necessarily delivered the commercial outcomes for the construction industry.

However, one of the biggest issues has been the failure of the outsourcing/ services model within the construction industry. The services models were seen as a tonic for the perpetual cyclical project-based nature of the construction industry. Ultimately, it would allow companies a steady income stream that allowed them to plan for the future in a more structured manner.  Many of our better known and larger construction organisations moved towards this services model.

So why has it gone wrong;

1. The strategic thinking behind the move to a services approach was not thought through. It is difficult to stay part services, part construction, part manufacturing, etc. These companies needed to move to a services delivery entity.
2. Large parts of the sector did not fully understand long term risk. It is difficult to deal with risk on the execution of construction projects let alone looking at long term whole life risk.
3. Many of the failures were not necessarily down to the failure of the outsourced work but through the failure of construction projects that did not sit comfortably within a services company. The last three major company collapses had within them a series of weak loss-making projects which the parent companies could not cover.
4. The services sector is typically operated on a cost leadership perspective. Low tech, manual and low margins. The contracts would typically require operational improvement but not necessarily increases in cost recovery. In some areas of services, efficiency improvement is not possible through technology or mechanisation. Labour costs can only be driven to a specific point.
5. Services are low margin activity. Large turnover is needed to recover overheads. The nature of services/operational provision is not the same for different facilities or infrastructure support.
6. There was a lack of corporate governance and internal control in these organisations. Poor accounting practice and exposure to risky contracts were common.
7. The nature of service contracts and PFI were often ideologically driven. The first wave of the contracts seems to be structured to make privatisation and outsourcing succeed. However, as clients started to challenge the value for money proposition changes were made and the contracts became inherently risky.
8. The large clients started to drive down margins, resulting in lower profitability. This reduced cash-flow and overhead recovery.
9. Large construction companies do not have the maturity to be service operators.

While these may not be all the reasons, they do provide a view as to why we have problems. The holy grail has always been to smooth cash flow and have a controlled turnover. Unfortunately, many companies have not understood what they were getting into.

#Next - Does larger mean better - The ongoing rise of the mega-consultancy

I am a Citizen of the World.

There is a political view that if you are citizen of the world you are a citizen of nowhere. It is a view that challenges the patriotism of the individual. It is also a view that challenges our humanity. I was born and raised in one country. My ancestry and ethic origin is not from my country of birth. I am now a citizen of the country where I reside. I am fiercely proud of where I live and regard it a privilege to be a citizen of this country. The values I learn from being a citizen of this country have shaped my outlook on life. These are not narrow nationalistic ideas but the importance of a sense of fair play, justice, equality, openness, responsibility and above all else tolerance. These are the values that shape my world view. To close myself off from the challenges we face on this planet makes me a lesser being. I am a citizen of the world because I care what happens to people in my community, my city, my workplace, my country and the world.  

Absent without Leave

It's been a while since I posted anything useful. I used the past few years to discover new things and come up with new ideas. I would like to think I have a better understanding of my world view.

So what has happened that needs talking about;

1. Brexit
2. Conservative majority government.
3. ISO 55000 was introduced.
4. The economic recovery is not complete.
5. The Global south is struggling
6. China continues to march onwards as an economic power.
7. Advancements have been made in sustainable technology
8. The price of oil has dropped
9. More countries are at war and we move from one humanitarian crisis to another. 
10. The climate change deniers  grow.
11. ESA put a space probe on comet. The Rosetta mission changes our understand of comets.
12. The rise and fall of the Northern Powerhouse.

We get better at cricket and worse at football. My obsession with sport continues. Modern jazz is undergoing a revolution and it is a joy to discover new talent. I also read the "Chimp Paradox". 

So I hope to be writing more.

Engineering Happiness

Construction and the Budget

The 2013 budget was presented yesterday. It was not particularly inspiring but did create some implications for the industry.

1. The capital spend on large scale projects was tiny in comparison to what was needed. A bigger boost was needed. Major infrastructure projects also have a long lead in time. The economic benefits take time to have an effect.  There is gap in thinking by the treasury. There seems to be an expectation that the private sector will fill the infrastructure funding gap. Unless there is a realistic prospect of growth why should the private sector be interested in taking the risk. Major infrastructure is going to provide medium to long term benefits but will not provide a quicker impetus.

2. The second strand related to house building and buying. There is a stimulus package to support house buying through mortgage support. This is good but simply fails to tackle the issue of economic uncertainty influencing first time buyers. The age group that forms first time buyers are the most vulnerable in the current economic climate. The unemployment rate is much higher in this group. A far braver action would have been to commit money directly in support of building social housing. This would have directly stimulated the construction industry, the multiplier benefits would have been quicker, people would be rehoused, regeneration of areas would have taken place and more effective value for money rents would be paid. This would never happen as it is against the idealogical thinking of the government. A missed opportunity.

I am reading " infrastructure productivity: How to save $1 trillion a year" - surprisingly good read.