H3 Partners: Exclusive Interview

Taking your business to a better place.

H3 Partners is a leading provider of Business Change Programmes using Organisational Change Management frameworks to help transform businesses from within.

In the first of a series of discussions, UK Construction Online speaks with Rod Horrocks, Director of H3 Partners, about the complex processes involved in change management.

Could you tell us a bit about your company and what it does?

H3 has always focused on change management. We provide a range of services that cover the change management aspect of any business. This might include identifying stakeholders and deciding what communication needs they have and what media works best, running workshops on the forthcoming changes – whether process, organisational or business role changes – or conducting communication sessions where people can ask questions and receive an honest and confidential answer.

We also conduct training exercises and assessments, during which we monitor what the change is going to do to the business and whether the business has achieved that change and the associated benefits. Associated with that, we model the business processes to help people to understand how the change works in an end-to-end sense.

At what point did you realise there was a market for helping with performance management and how did you look to get involved?

Businesses are always trying to improve their performance and a key element of this process will be to agree what the key improvements should be and what measures will drive these. From our perspective, it is important that you can measure what you are trying to change. While the cost side of the equation is very easy to see, we want people to understand that they ought to also measure what the benefit is going to be. This is not always easy to identify however, which is where performance measurement comes in. People do not measure these things very well – they have tended to rely on accountancy practice, meaning that the performance measurement data is tends to be late, can have been manipulated and is focused on a single number.

For me this is about getting business leaders to actually understand where performance is poor, where performance is good, and what changes can be made to improve the business.

Where does the construction industry fit in and what issues do you commonly encounter?

The construction industry is not too different. Most businesses have difficulty putting in identifying the correct measures against business processes and key performance indicator targets. The additional problem with construction is that the working environment is not ideal for implementing measurement systems. Construction can be subject to significant changes that are not foreseen at the planning stage when you schedule the dates and estimate how much concrete is needed or how long it will take to dig a hole. When you arrive on site or start the project can you be sure that the planning is correct and the dates set can be targets.

What can a construction companies expect when working with H3 Partners?

The first is that we demonstrate an understanding of the business and can empathise in how difficult the process of setting KPI’s is and how even harder it can be to make it work properly. We bring an enlightened view on what the business is trying to measure and what we use the results for. If you do not measure a process you cannot manage it and therefore if you are not going to measure it then forget trying the manage it. We encourage clients to use the measurement not to beat-up on the site manager or sub-contractor but to find out what is happening in the process and how to improve it; involving them in the discussion. Performance measurement is not well understood particularly when you think about setting targets and what the impact is of both under and over performing. We are not talking about single measures as the process cannot be black or white. Our work with clients starts with an education and awareness on both the structure and management of measures and enables managers to design and implement them for themselves. Not forgetting that the implementation of the process will be enacted by humans and poor measurement can have a very negative affect on performance.

How do you set about changing performance of a company from when you get involved to when your work ends?

We begin by enabling management to get a thorough understanding of process. What we tend to find is that companies often only look at the processes operating inside the different departments. So companies have activities going on in departments as diverse as estimating, project management, purchasing and finance but all these need to work in harmony for the overall process to be successful. These end-to-end processes, in which four or five departments are involved, are the ones that need to be measured and be managed rather than the processes in the departments; which can by improving them in isolation lead to a sub-optimisation of the end-to-end process.

Having developed a better process understanding, we move onto what are the best measures and who takes responsibility for managing them. In the construction industry the Site Manager is probably the only person who has a good overall view of progress and issues, he should take responsibility for the measure therefore but will need the support of all the departments that contribute to the end-to-end process. He should be able to call on changes and improvements in these departments to improve process performance. The best quoted example where this has worked well is the automotive industry, where matrix management and the ability to look at the end-to-end process is the only way that cars can be made to time and cost these days. Here, the person responsible is the Programme Director – not the engineers in departments such as chassis, drivetrain, suspension or engine or staff in support departments such as finance or purchasing.

This translates into the management looking at the business across departments and determining how best to deliver value to the customer, that can be difficult because in addition to the process vision there is an associated change in culture. As companies become bigger so do their levels of bureaucracy and as a result cross-function processes simply do not work. This can be amplified if the company is also divisionalised.

Do you think performance measurement is imperative for a company to remain successful?

If you do not know how the business works then you cannot manage or improve it. You have to recognise that everybody has to be more agile. If a process has not been redesigned in the last 18 to 36 months it is going to be 40% to 50% wasteful. Measuring the performance, removing the waste and looking at other ways of doing things are therefore imperative. It ought to be a fundamental part of everybody’s business activity and it should report to the CEO.

Given the potentially sensitive nature of performance measurement, are companies receptive to the idea of having their processes scrutinised?

It is difficult because you are challenging the way they are running their business. No-one wants to hear that message? You have to be very open minded about your own processes and roles and the performance of the business. Ultimately, it is about honesty. It is about companies holding a mirror up and saying “I do not think we are doing a good enough job here and we ought to do something about it”.

From our perspective, the success relies as much on interpersonal skills as it does tools and techniques. We need to build ‘trust bridges’ with business leaders and then deliver on our promises. So we first build credibility and trust, educate and inform and then support the business undertaking the change and developing their performance measurement system.

For more information on how H3 Partners can improve your business please visit the Company’s website or download H3 Partners’ Performance Measurement e-Book.

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