How do you successfully integrate five parent companies to work together on a series of major infrastructure projects? Louis White finds out.
Large infrastructure projects make for a big, messy, expensive and competitive business. Too often they attract media attention for all the wrong reasons, raising the ire of an inconvenienced public.
Due to size or complexity, tenders for major infrastructure development are often awarded to a winning bid made up of a partnership of companies. Naturally, having multiple partners involved brings with it the danger of clashing agendas, working structures, cultures, objectives, capabilities and egos; not to mention protecting multiple bottom lines.
How can such an alliance work successfully? What are the factors that need to be managed to maintain harmony? What compromises are necessary? How can the members not let the one big project, which is using vast resources, dominate and take the focus away from successfully managing the business's other project work?
Some of the answers to these questions may be found in the alliance that is overseeing a huge infrastructure program in south-east Queensland.
In August 2005, Queensland Rail (QR) set up the South East Queensland Infrastructure Plan (SEQIPRAIL) team in response to the publication of the Queensland Government's South East Queensland Infrastructure Plan and the South East Queensland Regional Plan 2007–2026.
The work to be undertaken was $82 billion worth of road, transport, water, energy, health, education and community infrastructure. It was clear from the magnitude of the planned rail infrastructure works that a team of dedicated project managers and support staff would be needed to ensure that QR delivered the projects efficiently, on time and on budget.
And it is a big undertaking. The SEQIPRAIL program office was set up by QR to deliver 28 new rail projects, 144km of track and 44 trains for south-east Queensland over the next 20 years. From this brief, various parent companies were commissioned for a range of projects, leading to an alliance.
The Program Alliance Agreement was signed between the partners QR, Thiess, United Group, Maunsell/AECOM and Connell Wagner on 30 June 2006. TrackStar Alliance began one month later with 120 designers, constructors, rail industry specialists and supporting professionals in offices on the edge of Brisbane's CBD. That figure is now 350, and growing.
TrackStar's brief was to design, price and build an initial four rail projects valued at around $700 million over the next six years, with the requirement to be able to undertake more projects in the future.
Interestingly, TrackStar Alliance is not actually a real company. Yes, it has offices, parking spaces, computers and people at desks, but not one person actually works for TrackStar Alliance because it is a virtual company with no Australian Business Number.
The five companies came together through an alliance in order for them to work more cohesively on the project and maximise their resources. This has been a major effort in coordination.
Alliance Manager, Mike Zambelli, an employee of partner Thiess, has a significant role to play in the smooth running of the various projects. "This is the fourth alliance I have worked on and they have all been successful," he says.
According to key players, the answer to the alliance's success is communication, as well as the ability to understand each parent's needs and wants.
"My role is one of coordination, meeting with the five parent companies regularly," says Zambelli. "You have to try and be impartial, take away the biases and have a clear mindset.
"The alliance members have constant communication and meetings to ensure that everything is on track. By pulling all the different divisions of the project together, instead of allowing them to work to their own agenda, it makes for a more uniformed outlook."
Martina Sheehan, Relationship and Performance Manager for TrackStar Alliance, and a director of her own company, who specialises in changing organisational mindsets, agrees. "It is important to think as one team," she says.
"The key is the mindset; so people aren't thinking like they are a contractor, or it is a joint venture, but that they are working as one team with one common goal."
Money talks, so they say, and one barrier to successful alliances is often the jealousies surrounding who is making how much money. One aspect that has helped tremendously in the ongoing dealings of the five parent companies of TrackStar Alliance has been the financial transparency arrangements agreed to before any project starts.
"Every parent company knows exactly what each other parent company will make in terms of profit from each project and that is a big barrier broken down," explains Zambelli.
Tim Ripper, SEQIPRAIL Program Director, is a firm believer in the value of alliances and sees them becoming increasingly the way forward for the integrated delivery of larger projects, to the benefit of the companies involved.
In a little over a year the alliance team has more than doubled in size. Proof of the alliance's success came with the delivery of the first rail project and a project saving of some $52 million.
"Through innovation we have been able to deliver on time and budget," Zambelli says.
"The key to the savings is in the bidding process," Ripper says. "In most projects companies put in estimated building costs and these can escalate according to variables that occur on a development. By aligning resources and everyone putting their costs and profits up front, it allows each parent company to concentrate on the task at hand."
In the real world, talking about collaboration and getting people to work together are two different things. The alliance has used a number of techniques to encourage integration.
TrackStar Alliance chose to have staff from all five companies work out of the one office. This was a big step to breaking down some of the usual barriers to successful integration. The close proximity to each other of designers, constructors, engineers and managers has allowed each group to understand first hand the difficulties they all face.
In attempting to underpin what they were all trying to achieve together, staff from the team also formulated five core words: clarity, courage, creativity, connection, and care.
"We identified a handful of principles that the core initial team had already established," Sheehan says. "That way the staff were involved, had input and vocalised what was already in place in the short time they had all been working together.
"The underpinning principle we have is to think differently; I believe that gives us the competitive edge by allowing us to be innovative. It is also a powerful tool in attracting new staff."
Another collaborative technique was the creation of TrackStar clothing. When working at the alliance headquarters, staff wear specially designed clothing, identifying them as members of the same team.
With new staff coming on board regularly, management has a briefing every fortnight for new team members, and, once every six months, all the employees spend a day together undertaking new project tasks and working in different groups.
"Those days are important and help break down barriers, allowing people who normally wouldn't work closely together to interact," says Sheehan.
"Everyone can't be up every day of the week/month/year, so it is important to allow for that in your scheduling because ebbs and flows in the workplace are normal."
One innovative practice that TrackStar Alliance has is called courageous conversations. Once a month, with a representative from each parent company and Queensland Rail in attendance, the day's agenda is put to one side and people are invited to speak on what they regard is and isn't working.
"It is a powerful tool to have in a management forum," says Zambelli. "Normally, you can't speak your mind outside of the contractual framework, but with TrackStar we put everything on the table to find out what the issues are and how we can solve them."
"By doing this we eliminate a lot of potential problems," Sheehan adds. "I believe that 20 per cent of culture is planned and 80 per cent evolves within every company [but] real or virtual, you need flexibility, agility and the capability to change."
The dynamics of the alliance are certainly different in allowing people to work without boundaries and across disciplines, while still reporting back to parent companies; all with an emphasis on achieving goals and sustaining peak performance on a realistic timetable. And it must have a eye on the future.
"The relationship established in the alliance needs to be a long-term one that will bear fruit to
economic and cultural benefits down the line," Sheehan says.
"It is funny because Queensland Rail were initially worried about the benefits of an alliance; but now they have seen the benefits in practise, they are selling the concept. I think down the line you will the alliance style of concept the only way of putting a team together."
Culture and values
Naturally enough, there is a lot of importance given to relationships in the alliance form of management, as well as encouragement to be able to constantly challenge and do things differently.
"It is all about behaviour and culture," Sheehan says. "And the key to that is to think differently to create that new culture."
Zambelli agrees. "You have to be strong on what brings best value. And, in my opinion, pooling your resources and forming a virtual company on big projects like these is the answer.
"A lot of time is spent ensuring every company is transparent with each other. In this case, each of the five parent companies spent time before the first project commenced just getting to know each other and understanding how each other works."
Ripper says that the culture subsequently created has taken the alliance to a new level.
"Every month senior management meet for dinner and there are board meetings once a month where every parent company is represented," Ripper says. "For the alliance to work, there has to be a lot of transparency and a lot of contact."
Of course, not everything always goes to plan. There is not always uniform agreement on each decision, but Ripper believes that the constant and open communication helps make those disagreements easier to settle.
"You have to focus on what needs to be done; and, of course, with different opinions and perspectives, there won't always be every party in agreement," Ripper says. "But with such regular communication things are normally sorted out pretty quickly."
The alliance's set-up means that with the burgeoning amount of project work, it allows other companies to enter the fray if needed.
"It is a pretty flexible contract, so if we need other companies and we want to take on new projects, then we can do so upon consulting with each of the five parent companies," Zambelli explains. "It must always be remembered that each of the parent companies has work outside of the TrackStar Alliance projects, so we need to be flexible."
TrackStar Alliance also takes the financial modelling very seriously with KPMG conducting a mini-audit every month. "Everything needs to be above board," Ripper says. "This whole alliance is about getting the best out of people and working to your collective capability on common goals. In my opinion, it is working.
"Entering into the alliance was a smart business decision. At the end of the day, we are delivering a great outcome for commuters in south-east Queensland, with a top-quality rail service built on time and within budget."
As the alliance goes from strength to strength, the evidence is certainly pointing in that direction.