2
Stage A: Inception
2.1 Purpose of stage
The purpose of Stage A is to determine whether the strategic aspirations (intent and benefits being sought) of an organisation can be achieved by executing a programme of works.
2.2 Stage outline
During inception, the organisation or organisations interested in implementing the strategic change or undertaking, will articulate the state they desire to achieve in a ‘vision statement’ (describing what they want to come about). This statement will be used to define what physical outcomes will need to be delivered by a programme in order for their vision to be realised; this document is known as the ‘programme mandate’ (the plan for the next few years). See Figure 2.1.
Figure 2.1 Stage A: Inception.
Vision statement
The process determining the need for a programme is likely to be complex and lengthy. This is because programmes by their nature are likely to be large enterprises, involving a wide mix of interested parties and large expenditure of capital, resources and effort and creating a large environmental and societal impact.
The inception stage will be undertaken by the sponsoring organisation which itself may comprise a number of separate legal entities.
At a senior executive level in the sponsoring organisation, there will be consideration of the need for a business change, or for the creation of a new enterprise or capability, that arises out of the strategic business objectives of the sponsoring organisation. This corporate aspiration is described by a vision statement, which is produced at an executive level and sets out the intent and benefits being sought. It is likely to be subject to a board-level approval and authorisation.
A vision statement can also be described as business vision for change as it is at the root of programme design and benefit definition (see Appendix T1 for a vision statement template).
Its key attributes can be summarised as below. They are:
- focused: simple, clear, concise
- motivational and inspirational
- feasible, with realistic and achievable goals
- easily conveyed (‘the elevator pitch’)
- at a high level, with flexibility to be developed further for each audience
- unambiguous and collectively understood by all in the same way
- free from technical jargon and uses common and plain language
Examples
- Major transport programme: To build a world-class new railway which expands the capital’s infrastructure
- Major sporting event: To host an inspirational, safe and inclusive Olympic and Paralympic Games and leave a sustainable legacy for London and the UK
- Major energy generation programme: Leading the energy change by developing and implementing a carbon capture and storage (CCS) programme in UK
Programme mandate
One of the first actions of the programme sponsor is to expand on the vision statement, setting out in greater detail what the programme needs to achieve in terms of outcome(s) and what the programme seeks to deliver. Depending on the nature of the programme, defining this may be obvious and straightforward or it may be highly complex, requiring development in association with parts of the sponsoring organisation and possibly with external parties. This process describes the programme mandate (see Appendix T2 for a template for a programme mandate).
2.3 Stage organisation structure
2.3.1 Stage structure and relationships
The inception stage requires the appointment of the programme sponsor by the sponsoring client body; the programme sponsor has total overall responsibility for the delivery of the programme and for the achievement of the required outcome. Adding detail and clarity to the initial aspiration is carried out principally by the programme sponsor. During the course of this stage, the programme sponsor will have acquired sufficient knowledge of the requirements of the proposed programme to determine the appropriate membership of the programme sponsor’s board (PrgSB). The PrgSB will provide strategic direction to the programme and will be the body ratifying key approvals and decisions on behalf of the programme business partners. (See Figure 2.2 for a chart of the Stage A organisation structure.)
Figure 2.2 Stage A: Inception – Organisation structure.
2.3.2 Stage roles of key participants
Client/sponsoring organisation
The client body that has decided to embark upon a major business change selects and appoints a suitably experienced individual who has the business, technical and managerial knowledge and skills to direct the successful delivery of the anticipated outcomes. Appointment of the programme sponsor should be accompanied by the client’s production of a vision statement setting out what the programme needs to achieve.
Business partners and funders
Those organisations that have a business or financial interest in the outcome of the programme assist the client in developing the vision statement and in providing advice to the programme sponsor in developing the programme mandate.
Programme sponsor
Announcement of the vision statement should be accompanied by the appointment of the programme sponsor. Having determined the need for a programme, it is essential for the sponsoring organisation to rapidly nominate one person from within the organisation to take ownership of the programme. The programme sponsor has full accountability for directing and leading the programme and for its delivery.
For very large programmes, it may necessary for the role of programme sponsor to be provided by a group or even by an organisation. In this situation there still must be a lead role that carries the ultimate responsibility.
The focus of the programme sponsor’s activity during inception is interpreting the outcome set out in the vision statement regarding what actually needs to be accomplished by the programme in order to achieve this outcome; this is defined in the programme mandate.
Key activities addressed by the programme sponsor to produce the programme mandate include the following:
- Reviewing the vision statement with the client
- Reviewing the vision statement with the programme business partners
- Breaking down the overall outcome into achievable objectives
- Engaging with external parties/key stakeholders who have specialist knowledge that helps to inform the programme mandate
- Determining the way the programme will be managed
- Preparing the programme mandate document
Developing the programme mandate should allow the programme sponsor to determine the functions and/or individuals to comprise the PrgSB. In relation to the PrgSB, the programme sponsor needs to:
- make recommendations to the sponsoring client body on the proposed composition of the PrgSB
- develop terms of reference (ToR) for the function and operation of the PrgSB
- oversee the formation of the PrgSB
- hold an induction meeting with the newly formed PrgSB
Following the production of the programme mandate, the programme sponsor has further activities to undertake:
- Presenting the programme mandate to the PrgSB
- Developing a ToR and plan for carrying out Stage B: Initiation
- Securing the approval of the PrgSB for the programme mandate
- Securing the approval of the PrgSB to proceed to Stage B
Programme sponsor’s board
Once formed during the inception stage, the PrgSB will be asked by the programme sponsor to review and ratify the programme mandate, together with the terms of references and time schedule indicating how the next stage will proceed. PrgSB approval allows the programme sponsor to proceed to the next stage of the programme. During inception, the PrgSB undertake a number of activities:
- Ratifying the selection and appointment of the business change manager
- Providing advice and input into the programme mandate
- Resolving issues raised by the programme mandate
- Ensuring the proposals contained in the programme mandate are consistent with the requirements of the functions/organisation that they are representing
- Reviewing and give approval to the programme mandate
- Giving approval to proceed to Stage B
2.4 Programme management practices
2.4.1 Strategic change
Change management is about doing things better: delivering organisational changes while managing quality and risk, as well as producing measurable and sustainable benefits adding value to operating business models. Programme management is a systemised and structured approach designed to realise strategic objectives and manage the risks of delivering programmes.
Programme management brings reality and method to the aspirations of strategic planning and to the delivery of strategic change with the right strategic objectives phased and delivered ‘on cost, on time, on quality and with benefits’.
A programme is a temporary organisation designed to operate, learn and adapt in a complex environment of interrelated projects, people and organisations. In this context, the programme manager is the chief executive officer of a temporary organisation with ‘the ability to carry the flame for what users want’.
Programme delivery in context of the built environment is illustrated in Figure 2.3. It is a circular process running from strategy to benefits realisation, framed between (i) businesses as usual – strategizing and realising benefits while operating a business/an organisation – and (ii) programme environment – planning and managing a programme to deliver outcomes and benefits.
Figure 2.3 Programme delivery in the built environment.
Strategic change: setting the direction
Strategic planning is typically carried out at the organisational governance level. It is at this level that the strategic direction for the organisation is set, thus strategic planning typically is not a programme management practice. Rather, strategic planning establishes the direction and strategic changes for an organisation’s programmes. Normally initiated at a senior level, it is a process which defines the business intent, formulates the vision statement and captures the strategic changes to be delivered via a transformational programme that will have positive economic, environmental and social impacts.
Strategic changes are defined and selected through the strategic planning process and the analysis of macro-environmental scenarios in order to produce qualitative and quantitative benefits, adding value by the expected return of this investment. For each environmental scenario driving a strategic change, the following questions will be considered:
- What political, environmental, social and technological trends are you noticing?
- What are the related issues or challenges?
- What advantages or opportunities are there?
- What impact might these have on the organisation?
A number of examples are listed below for each type of change:
- To enter new geographical market
- To renew equipment fleet
- To become leader in use of building information modelling (BIM) technology
- To develop strategic capability in programme management
- To implement operational waste regulation
- To implement carbon emissions regulation
- To adopt new licensing requirements
- To increase passenger capacity
- To deliver a major sporting event
- To improve flood controls
- To deliver alternative energy generation sources
- To reduce patient waiting time for hospital admission
An overview of the overall strategic approach (see Figure 2.4) adopted by the Olympic Delivery Authority to deliver the 2012 London Olympic Games’ physical assets is summarised below. Each project – land, venues and infrastructure, transport – was aligned to overarching and priority themes and a set of objectives established for programme delivery and decision-making purposes against specific reporting metrics. The Olympic legacy programme was designed to be delivered through three separated organisations funded in majority by the UK government as follows:
- Olympic Delivery Authority (ODA) – to design and build the venues for games and legacy purposes
- London Organising Committee of the Olympic and Paralympic Games (LOCOG) – to run the Olympic Games
- Olympic Park Legacy Company (OPLC) – to transition the assets in legacy mode
Figure 2.4 Olympic Delivery Authority – London 2012. (http://learninglegacy.independent.gov.uk/)
Business objectives: defining the destination
To deliver a successful programme, managers need to understand and consistently communicate their organisation values and vision for strategic change. They also need to translate these into business objectives that are SMART (Specific, Measurable, Achievable, Realistic and Time bound) in order to bring continuous improvement and/or deliver sustainable benefits. The following is an example.
See Figure 2.5 below for some further examples.
Figure 2.5 Strategic change and strategic objectives by change type.
An effective way to capture strategic objectives and filter down this information in a programme and an organisation’s functional areas is illustrated in Figure 2.6. The integration of programme reporting and business reporting metrics underpinned by earned value management is key to a successful delivery.
Figure 2.6 Strategic objectives alignment. HSSE – Health, Safety, Security & Environment.
Business change process: delivering continuous improvement
For customer or client-led programmes (i.e. delivering multiple physical assets or complex long-term contracts), the focus of the following sections, the traditional linear delivery cycle for major projects offers a robust model for delivery. Using this model, an effective programme will anticipate and integrate organisational changes within financial, contractual and physical constraints as time passes. Innovation through clarity of strategic intent and creative design coupled with adapted controls (risk management and change management) is critical to successful scope delivery (on time, to budget and quality) and benefits realisation. The programme and organisational structure (including resource levels) will be gate controlled and will evolve through each delivery phase.
2.4.2 Funding policy and strategy/arrangements
Sources of funding for a programme may come from single or multiple (internal or external) organisations or business units contributing to the programme budget and anticipating a benefit from a strategic change. Not all the projects within the programme may have the same funders, given the potential time variances. Hence, the number and range of funders may change over time; typically, these may include banks, pension funds and insurance companies, together with investors from the UK, EU and other international sources. This is likely to depend on where the individual projects are located. The nature of the projects themselves may attract different types of investors and funding organisations.
The funding policy for the programme typically will depend on the nature of the programme and whether it is in public sector or private sector. At the inception stage, the key decision for the type and nature of funding may not be fully detailed: perhaps, neither would the budgetary requirements or cash flow. Depending on the outputs and outcomes, it is possible that different streams of funding may have to be pulled together for different projects and outcomes.
Some of the initial considerations in relation to funding arrangements may include the following:
- Is the proposed programme a strategic fit for the organisation?
- Does the work require long-term and extensive support?
- Are there adequate considerations for lowering the financial risk, thereby reducing the cost of money?
- Is the proposed programme in an area of high strategic priority for a large investment?
- Is there a case for a major investment in the context of the overall portfolio and budget?
- Does the programme mandate generate confidence that the programme has the potential to successfully manage and deliver the benefits?
- What is the quality of the proposed programme?
- Are the risks clearly defined, with mitigation measures proposed?
- Are there contingency options in place?
- Are the delegated authorities clearly defined?
- How significant is the proposed programme in terms of its potential impact?
- Are there clear and deliverable benefits?
- Is it important to pursue this programme now?
- Is the vision and mandate realistic in its time frames and proposed resources?
- How convincing and coherent is the overall proposed approach?
- Has the organisation demonstrated a clear commitment to the proposed programme and the desired benefits?
- Are there any internal or external dependencies or funding?
- Does the programme represent good value for money?
- Are the proposed arrangements for the stakeholder understanding of this programme appropriate and sufficient?
Not all of the above considerations may be fully determined at this stage; however, these are some of the key criteria (and by no means this is an exhaustive list) that the programme brief (see Stage B) must be able to satisfy in order to secure funding.