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In brief:
United Utilities United Utilities PLC was created from the merger of North West Water and Norweb in November 1995. With headquarters in North West England, it employs over 17,000 people and is also a FTSE 100 company. Its principal activities are managing and operating the regulated electricity distribution, water and wastewater networks in North West England, a region with a population of around seven million. The group also owns two support services businesses: United Utilities Contract Solutions and Vertex. These businesses apply the group's core skills of infrastructure management and business process management in the provision of services to others.
Northern Gas takes on United Utilities Northern Gas Network, a company responsible for distributing gas to homes and businesses across the north of England, had chosen to separate its asset management and ownership responsibilities from the delivery of operational activity under a model known as ‘strategic asset management’. This split of assets and operations meant that Northern Gas Networks would retain all of its obligations and responsibilities required by its Licence to Operate, issued by the industry regulator Ofgem, but that it would outsource the maintenance and repair of the gas pipe work. The contract would be worth £80 million to its chosen partner. United Utilities was chosen by Northern Gas Network to manage and deliver this outsourced service. The majority of the physical work for replacing and repairing the region’s 36,000km of gas mains pipes will be outsourced to third parties. In such a situation, United Utilities knew it would have to work closely and effectively with delivery partners to ensure everything remained on track for the gas replacement works. To achieve this it had to demonstrate to Northern Gas that it was the most progressive in its culture and that it could work effectively in collaboration on this project with its chosen consortium of outsourced partners. The implications of choosing the wrong partner could result in massive legal and operating costs. If the programme was to slip by just a few weeks, potential loss of investment could be massive. Making it a success
70 per cent of alliances fail to deliver their objectives, of those 70 per cent of the failures are due to relationship issues, including things like transparency. To stop this from happening United Utilities realised that there needed to be a move away from traditional contractual work, where there was little thought towards working cultures collaborating effectively. ‘Culture & process’ would now have to be key components in choosing an alliance in order for the project to be a success. United Utilities initially short-listed four bidders for this project. In the past they would have simply visited each bidder’s site to make sure they had the right tools and people to do the job, little emphasis was placed on how effectively the two parties could work together. However, for this contract United Utilities would place 30 per cent of the score on the culture and partnering capability of its potential partner, with the final stage of the selection process involving a culture and partnering assessment. It became evident to United Utilities that an outside consultancy would be needed to help them in this new approach to the procurement process. They knew that it would also demonstrate to Northern Gas that they were thinking ahead, ready to work in collaboration and adopt a new working culture. Jamie Major, head of commercial at United Utilities Operations ltd, was directly involved with the tender process. He was tasked with bringing in an external consultancy to assist with the partnership bidding process. He approached CPCR, a consultancy that specialise in collaborative leadership and with whom they had worked on a previous project of a similar nature and were pleased with the results. Jamie interviewed CPCR, and outlined the potential challenges they might face. He also highlighted that United Utilities wanted to be prepared to prove to Northern Gas that they could adopt a collaborative working partnership with its chosen consortium and that their people had the required skills to go on and manage the task ahead. CPCR's role
CPCR designed and facilitated a process that would allow United Utilities to assess the culture and behaviours of the bidding partnership organisations. In the initial meetings, CPCR worked with the procurement team at United Utilities to help them set out their goals and translate those goals into a framework of assessment criteria. CPCR then designed a two-day workshop, which would give teams a range of different opportunities to demonstrate how well they met the criteria. The aim was to expose people to the typical demands of a partnership and assess how they managed the processes and relationships to deliver results. During the workshop, each of the four bidder teams worked alongside United Utilities staff and managers, completing a series of exercises designed as a vehicle to expose the real team culture and test their partnering skills. Other United Utilities managers worked as assessors, taking the lead in the observation, recording and evaluating the performance of the different teams. CPRC’s role was to facilitate the process, chairing the assessor panel, providing expert behavioural advice, and transferring knowledge to the United Utilities’ assessors. The workshop itself was followed up with a half-day conference with the United Utilities assessor team and CPCR to collate and score the performance of the teams. Once the assessor team had collated and agreed the results, CPCR went on to produce a detailed report of quantitative and qualitative data which was used as part of the final tendering decision making process. “We’re delighted with the work CPCR has done. They have given us the framework and valuable skills to demonstrate our partnering skills and unique culture. We would have no hesitation in bringing them in again for other projects.” “The money we’ve invested to bring CPCR in has no comparison to the turnover of an £80 million contract. We’re currently in the final process of procurement, but have been recognised to be ‘top class’ by Northern Gas - I’m sure this has been a direct result of CPCR’s involvement. I have no doubt that we will select the best partners to go on and help us complete the gas replacement works, based on the final report produced by CPCR,” explained Major.
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