G4S and the Olympics nightmareby David Walton (No Comments )
What information a CEO needs on a project.
The 2012 Olympics in London is one of the biggest programmes in the UK. It all seems to have been planned and executed in a professional manner. But last week came the news about the lack of security for the Olympics as G4S had not been able to recruit enough security guards.
The CEO was hauled in front of a Select Committee and lambasted by a group of angry MPs. The effect of this debacle will probably be a loss on the individual Olympics contract, significant brand damage, a fall in the share price (currently 13%) and fewer Government contracts in the future. The CEO may also be lucky to survive the wrath of the shareholders.
G4S is not the only company to fall foul of a large project going horribly wrong resulting in brand damage and a reduction in shareholder value. We all remember the debacle of the Heathrow terminal 5 baggage system which just didn’t work when Terminal 5 was opened.
A CEO can be basking in the sun on holiday and then suddenly get a nasty surprise when a large programme or contract goes disastrously wrong. How can a CEO understand that a project car crash is about to occur so he or she can intervene and prevent it from happening?
A CEO cannot, nor should he/she understand all the risks of a large change programme like ‘providing security for the Olympics.’ In a programme of that size with many potential sub-projects, there could be hundreds of risks. A CEO is a busy person and has not time to understand all these risks and that is not his or her job. What a CEO needs to understand is the project risks that could affect not just the delivery of project components (delivery risks) but also affect the value of the project or indeed the company. These ‘value risks’ will naturally be a small subset of the programmes risk register. This value subset is likely to grab the attention of a CEO quickly so he or she can take immediate corrective action so as to avoid the consequences of a train crash like Terminal 5 or Security for the Olympics.
Many tools that are used on large projects or programmes tend to be large beasts that need a lot of feeding and produce many detailed reports. What is needed in addition is a tool and process that looks at the programme from top-down and identifies to the senior management the value risks and a high-level dashboard. Our project and portfolio management tool, PM3 does this and is the only tool that separates risks value risks as opposed to just delivery risks. Tools that just do the detail often give a false impression that all is under control because the massive software tool is controlling the programme! What is needed is the top-down view that screams ‘THIS NEEDS ATTENTION’
Concentration on value risks may keep the CEO basking in the sun a bit longer!