Tag: Management

Posted on

Project Manager or Scapegoat?

You Need to Stop Pointing That Finger

Big Project Failures Claim Their Victims in Spectacular Fashion

You’ve just been assigned a high visibility failing project  and  you’re working round-the-clock to get the work to the client on time, despite the fact that the job bears barely any resemblance to the project  you initially discussed. The  scope keeps creeping, the risk  and issue alerts are coming in thick and fast, the project is already  two months  past the original deadline, the clients are getting antsy even though they’re yet to provide you with various key pieces of information in order to baseline the project.  Is this your chance to shine  and showcase your skills?

If You Don’t Know Where You’re Going, You Will Probably End up Somewhere Else – Laurence J. Peter

If you manage to turn the project around and the project is successful, you will attract many fathers. However, if the project fails, you will probibly be  offered up as the  sacrificial lamb (scapegoat),  there is absolutely no way around it.  A  high percentage of projects fail to deliver useful results, that’s a  fact.

Project managers are  regularly blamed for schedule delays and cost overruns for projects they inherit by no fault of there own, however, in most cases, the fault for such issues rarely lies with just one person.

Sufficient data has been gathered to indicate that blockers such as unsupportive  management, senior sponsorship or low  resource availability are as much to blame for project failure as ineffective stakeholder management or poor communication.

Capture  all decisions

The only way to protect yourself is to ensure that you capture all decisions made in the project. In most cases  many of these decisions  will have been made by people above you. While you can influence decisions made by people under you. Get into the  habit  of building a dashboard early in the project and updating it each week with actuals.  Also consider using a  standard repeatable technique to analyse the health of your project.

Constrained resources

If you are in a project where resources are constrained, clearly outline the resources that you require to deliver the project in terms of time, scope, budget, risk  and  quality. If resources are pulled from your project, clearly articulate the affect of that in delivery terms and measure that to time delayed or cost added.

Risk and issues register

Operate  a strong risk and issue register,  ensure  it is both visible  and assessable so  your team can  actively participate in updating it.

Stop  the project

Always remember, cancelling the project is not always a failure. There can be many reasons why the project may no longer be desirable now. If you have done your job well, you can be really successful by ensuring a project does not continue to meander along, wasting time and money when there is no possibility of completing the project.

Organisational change management

Unfortunately, the same can’t be said when there are organisation change management issues.   While there are a  few project managers who feel their jurisdiction ends at the triple constraint, most now  understand the need to achieve the expected benefits from their projects.

So when is it fair to blame a project manager for poor implementation of a  project’s deliverables,  this is assuming that they were employed at the beginning of the project?

  1. If they didn’t perform good  stakeholder analysis during the project initiation stage as well as at regular intervals.
  2. If they turned a blind eye and deaf ear to factors that could impact value achievement
  3. If they didn’t insist on a clear communication strategy and progressive information sharing with relevant  stakeholder groups.
  4. If they didn’t engage influencers from key stakeholder groups throughout the project lifecycle.
  5. If the organisation management deliverables were not built into the project’s scope definition and work breakdown structure.

Assuming the project manager was appointed at the start of the project and had undertaken  all of the above, what are invalid reasons to blame the project manager  if the project failed?

  1. A lack of timely resource availability or commitment by the organisation
  2. Directives to the project manager to not engage certain stakeholder communities
  3. Ignorance by senior sponsors to management risks raised by the project team
  4. A management decision  that is too bitter a pill to swallow in spite of how much it has been sugar coated

Have any comments or stories that could help to expand this article?

Posted on

4 Lies about Procurement You Probably Believe

The world of Procurement is seemingly full of impassioned people absolutely certain about what procurement is all about. Like other great lies, many of these half-truths and misleading ideas sound agreeable to the ears and come packaged as good advice from influential people.

How many of these popular lies have you fallen victim to?

1. Procurement should have a seat at the C-table

It’s not so much an outright lie as an irritating half-truth – but the damage comes with what Procurement people do with it. The thought behind this is well-intended: Procurement people should be able to speak the language of senior executives as easily as they can talk about FIDIC or demand forecasting. Terms such as EBITDA, ROIC, and economic profit should be part of their everyday parlance. Procurement issues are often the least understood by the board and the CEO and must be explained in their language.

What on earth could be wrong with that?   Nothing – if the Procurement people have full cognisance of their own tools and language – and can be persuasive to senior people of the value of Procurement.  

Now, that’s where we have, what is kindly referred to, as a skills gap.

In reality, for Procurement with no reputation (outside of that pesky metric of cost) and few business-aligned projects to call upon, it can be incredibly hard to try and catch senior people’s ear – never mind a C-seat (see what I did there?).

2. You must carry out a competitive tender to obtain value for money

I’m trying to distance myself from the public sector here (noting I did co-author the CIPS book on contracting in the public sector) but even in the private sector there’s a desperate need to get three quotes.  

Why three quotes?  

Not five, not 11?   ‘Cos the rules say three; that’s why.  

And the rules of Procurement policy and procedures, well, they can’t be broken because the CFO or the head of internal audit (all very commercial animals?) will be down on Procurement like a ton of bricks.  

When the three quotes are received the following conversation occurs – the highest price is rejected – ‘they’re ripping us off’ followed by – and I love this one about the lowest price quotation – ‘the price is too low, they must have got the specification wrong’ – and the contract is awarded to the middle-priced one”¦.surely there’s a better way to deliver value for money?  

Perhaps starting with actually defining it!

3. Procurement is the only source of governance for 3rd party spend

Being the only source would suggest a 100%, right?  

I’d be amazed – and delighted – if Procurement governed half of all the 3rd party spend.   Words such as ‘influencing’ are sometimes bandied about to shore up this lie. What a surprise that sales people are either trained, or very quickly learn ways, to actually bypass Procurement when selling.

And the reason?

Obviously marketing, IT, auditors fees, construction/property, recruitment (I could go on) is completely different, say the senior people in those departments – echoing the views of the oh so helpful sales people.   And Procurement just never gets near, as they can’t articulate (deliver?) the value they can add.  

I await the avalanche of people commenting on this telling me I’m wrong.   Please be assured you are exceptional in Procurement.    

4. Procurement welcome innovation and strategic relationships and anything other than lower price

Few businesses view Procurement as a strategic process. Most often, Procurement staff report to the CFO. This astonishing trend indicates that Procurement is still viewed as a financial / accounting activity and not an operational strategic activity that directly impacts the bottom line.

Suppliers; if you have an innovative product or service, recognise that Procurement’s ‘raison d’être’ is to deliver cost savings.   That’s what they are measured on, that’s what the research with CPOs and the C-suite say is the #1 priority.   There’s oodles of other priorities such as local sourcing, sustainability, innovation, partnering, risk management – I could go on and on and on.   But that’s the one they get measured on. Think that through, next time you’re pitching.    

The take-away

Perspectives on Procurement need to change, mature and grow up.  Lies like these need to be re-evaluated and abandoned. Procurement needs to change the way they engage and manage suppliers and their internal stakeholders; ‘adding value’ (a dreadful phrase!) means so much more than asking for a discount.

Stephen Ashcroft BEng MSc MCIPS (speaking here, very much in a personal capacity!) is Associate Director, Procurement and Commercial Advisory at AECOM, a Fortune 500 company. He’s a procurement learner stuck in the body of a procurement veteran, and with over 20 years’ experience still sees the glass as half full. Working with leading organisations across diverse industry sectors, Steve helps clients reimagine procurement to drive improved performance. A recognised advisor, speaker, lecturer, and author; the ever-hopeful Kopite shares his bright-eyed/world-weary views on Twitter @ThinkProcure, LinkedIn and his blog.

Posted on

34 Thought Provoking Change Management Quotes

Change is good. It’s also often hard. The status quo can be so much more comfortable. But to succeed in business, you must run toward change.  Companies most likely to be successful in making change work to their advantage are the ones that no longer view change as a discrete event to be managed, but as a constant opportunity to evolve the business

Here are 34 thought provoking change management quotes:

  1. It is not the strongest or the most intelligent who will survive but those who can best manage change —  Charles Darwin
  2. One key to successful leadership is continuous personal change. Personal change is a reflection of our inner growth and empowerment — Robert E. Quinn
  3. Change before you have to — Jack Welch
  4. You must embrace change before change erases you.
    — Rob Liano
  5. Change before you have to — Jack Welch
  6. Too few leaders have the emotional fortitude to take responsibility for failure.
    — Paul Gibbons, The Science of Successful Organisational Change: How Leaders Set Strategy, Change Behaviour, and Create an Agile Culture
  7. People don’t resist change. They resist being changed! — Peter Senge
  8. If you want to make enemies, try to change something — Woodrow Wilson
  9. The key to change is to let go of fear — Rosanne Cash
  10. The world hates change, yet it is the only thing that has brought progress — Charles Kettering
  11. There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things — Niccolo Machiavelli
  12. Change is the law of life and those who look only to the past or present are certain to miss the future — John F. Kennedy
  13. Even those who fancy themselves the most progressive will fight against other kinds of progress, for each of us is convinced that our way is the best way.
    — Louis L’Amour
  14. Whosoever desires constant success must change his conduct with the times — Niccolo Machiavelli
  15. Your success in life isn’t based on your ability to simply change. It is based on your ability to change faster than your competition, customers and business — Mark Sanborn
  16. Change your thoughts and you change your world — Norman Vincent Peale
  17. If you don’t like change, you will like irrelevance even less —  General Eric Shinseki (U.S. Army Chief of Staff, 1999-2003)
  18. We now accept the fact that learning is a lifelong process of keeping abreast of change. And the most pressing task is to teach people how to learn — Peter Drucker
  19. Whosoever desires constant success must change his conduct with the times
  20. — Niccolo Machiavelli
  21. All is connected, no one thing can change by itself
    — Paul Hawken
  22. Learn to adjust yourself to the conditions you have to endure, but make a point of trying to alter or correct conditions so that they are most favorable to you — William Frederick Book
  23. We would rather be ruined than change
  24. We would rather die in our dread than climb the cross of the moment  and let our illusions die  — W. H. Auden
  25. Every generation needs a new revolution  — Thomas Jefferson
  26. Never doubt that a small group of thoughtful, concerned citizens can change the world. Indeed it is the only thing that ever has  — Margaret Mead
  27. I’ll go anywhere as long as it’s forward  — David Livingstone
  28. Life isn’t about finding yourself. Life is about creating yourself  — George Bernard Shaw
  29. Adaptability is about the powerful difference between adapting to cope and adapting to win— Max McKeown
  30. You can’t build an adaptable organization without adaptable people–and individuals change only when they have to, or when they want to — Gary Hamel
  31. People will try to tell you that all the great opportunities have been snapped up. In reality, the world changes every second, blowing new opportunities in all directions, including yours — Ken Hakuta
  32. A wise man adapts himself to circumstances, as water shapes itself to the vessel that contains it — Chinese Proverb
  33. The price of doing the same old thing is far higher than the price of change — Bill Clinton
  34. Each of us has the opportunity to change and grow until our very last breath. Happy creating — M.F. Ryan

Change or die? we  choose life! How about you?  

Posted on

Millions of It and Project Management Professionals to Benefit from the New Axelos Professional Development Programme

For the first time, millions of professionals across the globe qualified in ITIL ®, PRINCE2 ® and PRINCE2 Agile┞¢ will be able to track and record their professional development through a Continuing Professional Development (CPD) scheme as part of the new AXELOS Professional Development Programme, which launches today.

The AXELOS Professional Development Programme is an online membership programme aligned to the global best practice frameworks of ITIL, PRINCE2 and PRINCE2 Agile, that provides members with a range of specialised tools. Members will be able to assess their ability against industry benchmarks and gain access to exclusive content and activities designed to develop their skills and knowledge.

The programme will give practitioners the confidence and tools to keep up-to-date and relevant in their field while supporting them in their professional development. By completing the required CPD points, members will earn a digital badge that can be shared via online platforms to demonstrate their relevance and commitment to professional development.

Peter Hepworth, AXELOS Chief Executive, said: “There are millions of practitioners with either ITIL or PRINCE2 qualifications, and we want to champion these professionals by giving them a means to develop their knowledge and skills. This new programme is all about offering additional value for IT service management and project management professionals which goes beyond passing an exam and gaining a qualification.

“Ongoing investment in professional development also benefits organizations as well as individuals. Employers can ensure that their employees are continually developing their skills and the new digital badges will also help employers source the right talent by using them to differentiate against individuals who haven’t kept their skills up to date.

“The scheme will enable ITIL and PRINCE2 practitioners to achieve industry recognition and enhance their own personal brand. In addition, employers who invest time and money in CPD can develop their teams and drive up standards while improving staff loyalty and morale.”

Those wishing to join the scheme must hold an ITIL or PRINCE2 qualification. AXELOS are running a promotion so anyone joining in 2015 can save £100 on annual membership costs, and just pay the initial £25 registration fee.

The Professional Development Programme is the latest addition to the best practice portfolio owned by AXELOS – a joint venture between the UK Government and Capita plc. More information can be found on the AXELOS website: https://www.axelos.com/professional-development

Project Journal  staff were  not involved in the creation of this content.

Posted on

Manage Your Project More Effectively Now

There are a few who get project management right from the outset, but for many it’s a minefield. In theory, project management seems easy, but it’s not as straightforward as it seems. If you’re like the majority of people, you follow what seems like a simple project management process. You start by setting your budget, you choose the right people to join the team, and hope the project gets completed without too many hitches along the way.

But, realistically speaking, project management is nothing like this – it’s hardly ever so straightforward. Mistakes are made. You might choose the wrong people to complete the project. Your team might have no idea what’s expected of them or what the project goals are, or in some cases they might even receive conflicting information, which puts the whole project in jeopardy. Sometimes the scope of the project changes, and because of everything else that’s going on, your team is unable to fulfill the requirements and meet the project deadlines.

It happens, and you’ve got to be prepared for any situation while working together towards the common goal – successfully completing the project.  

Don’t throw in the towel just yet. It might seem daunting, but there are few surefire tricks of the trade which businesses and project managers can implement to better their chances of successfully completing a project on time and within budget.

1. Know the Project Details Well

Before starting, you need to create a thorough project scope that outlines every single thing. This then needs to be approved by every stakeholder involved.

Your scope needs to have as much detail as possible such as the short-term milestones, deliverable dates, and a budget outline. It makes sense really. The more detail it includes will improve your odds when it comes to completing the project successfully.

What’s more, you’ll also improve your relationship with your client throughout the whole project process from the beginning right through to the end. Of course every project will encounter a few changes along the way – this is the norm, but having a detailed plan will help you manage your client better when something is off course.

student-849826_1920 (1)

Choose your Project Team Members and Size Wisely

2. Choose your Project Team Members and Size Wisely

Naturally, if you want your project to be a winner, you need the right people for the job, which includes having the right project manager on board. Keep your team as small as possible – size does matter; so don’t let anyone else tell you otherwise.

The smaller the team, the better the communication. It also eases the stress and takes the pressure off the project manager. With a smaller team made up of the right people, the project manager will be able to organise their group without losing sight of all the details and work that’s needed doing. So, if you really want to have an effective project, limit your group’s size and only use those people and their skills that can benefit the project.

startup-594091_1920

3. Highlight your Expectations from the Outset

You need to outline what you expect and what the client expects, which includes all the milestones, from the very beginning. Setting more milestones more frequently will allow you to follow the project’s progress more effectively. This way you’ll be able to jump on things quickly when they begin to go off scope, allowing you and your team to remain on target and on time.

Setting frequent milestones in a project will also allow you to review your spending and the investment thus far, which in turn will help you stay within the budget.

Milestones remove any ambiguity. They allow people to stay on target and there’s less risk of derailing the project.

Milestone setting should be a team effort. Everyone should be on board, so there won’t be any excuses later on down the line.

4. Does your Team Know what They’re Doing?  

It may sound like a given, but it’s really important to be crystal clear from the beginning regarding people’s roles in the project. In other words, you need to highlight who is responsible for what, and what their deadline or deadlines are.

Things can get complicated with many people working on the same task. Sometimes things get misinterpreted or lost in translation. Avoid anyone being confused by clearly stating who should do what right from start, and make sure you enforce accountability.

You don’t need to worry about manually managing such tasks, as there are plenty of easy-to-use online task management programmes that can do this for you, so embrace technology and ease your pressure.

You may think it’s a waste of time spelling it all out, but this ensures that the full scope of the project is understood, people are clear of their role and individual and collaborative timelines. This is the key to keeping people on task and motivated.

5. Stop Micromanaging

It’s important to constantly touch base with your team members. However, there’s a fine line between supporting them and breathing down their necks. Give them space instead of micromanaging. Empower your team, trust them, and you’ll get their best work.

6. Use a Reliable System to Manage the Project

Communication is key. Most people rely on emailing, but when it comes to managing a big project with a number of different people working on it, this can hinder the project’s progress. Constantly referring back to old emails and previous correspondence is only going to waste precious time. Use software that keeps everything in one place from communication to any project information and updates. This will save you and your team a lot of time and money.

student-849822_1280

Motivate your Team

7. Motivate your Team

Everyone works better with positive reinforcement. Set milestones and reward when they’re reached. Your milestones will keep all people on track. Celebrate milestones together, but be sure to also recognise those who can’t meet them.

8. Frequent Short Meets to Stay on Track

startup-593344_1920

It’s a project with many people collaborating, so holding regular meetings is a must. This is the only way to ensure that everyone and the project are on track. But you need to keep it short and sweet. Don’t meet for the sake of meeting. Have an agenda and stick to it. If you’re doing your project virtually, it’s even more important to touch base on a regular basis, so keep those communication lines open.

People do tend to go on at times when given the floor, so give everyone a set time to speak and make sure you all stick to it.

9. Allow Time for Change

student-849824_1920

No project ever runs 100% smoothly and specifications do change along the way. So to avoid the unnecessary stress and running around frantically, do some forward thinking, and set aside a certain amount of time for any changes in the scope – you’ll thank yourself for doing so in the end!

Posted on

2 Ways Residential Elderly Care Providers Can Drive Growth

The care sector is growing fast. People are its most valuable asset and investment in care-home developments is being fuelled by an ageing population and a growing demand for specialist skills.  

Scalability and Replication Have Now Become the Building Blocks That Will Enable Residential Elderly Care Providers to Sustain Growth, Deliver Successful Change and Achieve High-quality Service Outcomes

Dean Jones, former Investment Growth Programme Manager for Care UK offers insight into how REC providers can take advantage of market opportunities by building a sustainable and scalable system. Jones’ experience includes programme managing a £250 million investment-growth programme from 2012 to 2015, which involved building and commissioning 20 new state-of-the-art care homes and their services. He also oversaw a £60 million 3-year investment in a Suffolk programme, for the building of 10 new care homes and 10-day clubs and bringing much needed additional nursing and dementia-specialist care to the community.

REC Providers Can Develop Their Own Blueprints to Replicate and Scale Growth

REC providers can learn much from Jones’ involvement with scaling successful care homes. In his work at Care UK, Jones employed innovative ideas for evolving the next generation of care homes and introducing a competitive edge through unique selling points to harness market potential. The trendsetting programmes have led to phenomenal success, with more than 30  new homes built over a five-year period, a level of growth rarely seen in this sector. Jones describes how REC providers can develop their own blueprints to replicate and scale growth.

Building a foundation

The organization relied on a guiding principle as it developed a scalable system. It consisted of a toolkit that would outline how to manage projects and launch new homes, along with the standard of care the organization expected once a home is operational. The first system in the toolkit, the Project Management Blueprint (PMB) consisted of methodologies, processes and systems that would guide the creation of an ambitious and exciting growth pipeline for new homes.

The Blueprint ensured that the programme and project’s team resources would deliver high-quality outcomes through the practice of sound project management, both at a programme and individual project level. However, the Blueprint was just one of three tools the organisation would use to govern the commissioning and operation of new care homes. The other tools, a Home Manager Launch Manual (LM) and a suite of Standard Operating Procedures (SOP), complemented the programme on the whole.

Building the Capability to Service the Demand Is the Key to Driving Growth

The blueprint

construction-370588_1920

Creating the demand for growth and the environment for change is not enough to generate scalability. According to Jones, building the capability to service the demand is the key to driving growth. Instead of control, managers need to:

  • Introduce a framework and certainty about processes.
  • Implement repeatable best practices.
  • Build the ability to drive quality.
  • Equip people to do the best job possible.
  • Introduce a suite of project documents that directly suit the organisation’s purposes while ensuring consistence use.
  • Increase efficiency and productivity.

As a result of the Blueprint, Care UK was able to construct the building blocks for scalability and replication that would encourage change, growth and quality outcomes. When the foundation of an organisation is built on highly standardised and formal processes underpinned by highly developed performance-monitoring systems and the ability to control quality, it has a scalable business model. Another component involved in the process, evolving the product offerings through a process of service innovation enabled Care UK to apply standardised business-model concepts.

The requirements

Building a methodology for scalability involves considering project and business requirements first. Then, the organization can develop a system that meets the business and management-style needs to deliver successful outcomes. Jones employed a methodology that outlined the standard project-management methods to be used, and practices and guidelines to follow when managing new-home opening projects and business-transformation projects. With a disciplined, well-managed and consistent methodology, Care UK promoted the delivery of quality products and services, on time and within budget for each location.

The essential benefit of adhering to such a defined project- and programme-management methodology is the ability to demonstrate repeatable successes, rather than learning the same difficult lessons again and again. The objective of the methodology ensures that each new home opening was delivered to the highest possible standards via:

  • High-quality product or service that adheres to the business case.
  • Excellent standards of care and service.
  • Financial performance that achieves or exceeds the business case.
  • Homes or change initiatives delivered on time.
  • Projects executed on budget.

Relationships

Effective working relationships are also critical to the success of large-scale projects. Management tactics based on a matrix structure ensure that functional and operational resources are aligned across the business. This approach results in significant advantages, as it enables effective and responsive participation from different parts of the organisation that have specialist expertise. In Jones’  matrix, people from different parts of the business took a lead role in managing a specific work stream and were known as Work Stream Leaders. Jones  also adopted the RACI technique for identifying functional areas, key activities and decision points where ambiguities exist.

Project Lifecycle

The management of any large, complex project is made easier when broken down into more manageable chunks. This unique approach to the project’s lifecycle enabled Jones’  to establish clear controls, e.g. review points, or gateways, at which to consider progress before moving on to the next phase. The Care UK project lifecycle methodology consisted of five distinct stages, with each stage considered as a sequence, providing the structure and approach to progressively deliver the required outputs.

Risk and issue management

Focusing on critical risk issues helps programme managers mitigate threats. Regularly planning and leading benefit reviews helps organizations drive success and ensure that profits aren’t eaten up by largely avoidable risks. For example, a slight reduction to a home’s expected average weekly fee (AWF) – although based on a more up-to-date market analysis – could have a detrimental effect on the bottom line. However, if this market analysis re-evaluation were to take place at the pre-planning stages, then the organization has an opportunity to review down spec. Key decisions like these must be managed with due diligence and care, by referring to the original business case and using a clearly defined change-control process, and then directing such matters to the programme board for approval.

Recommendations

Programme managers embarking on a scalability journey should note that before diving into the planning of a system of methodologies and processes, it’s important to first understand what needs to be fixed. Jones began his appointment at Care UK by working with a small team. They spent time getting into the nitty gritty of launching care homes, reviewing checklists, liaising with the Care Quality Commissions (CQC), and understanding the business and identifying gaps. Only then did he present the findings and gain support for the project’s Blueprint. Managers also need to understand the organisational culture in which they operate, and then adapt their approach accordingly. Finally, gaining senior management trust is another critical step, as approval and support helps form links throughout the organization – including the lower-management levels.

write-593333_1920

Successful organizations need managers with a breadth of knowledge – not necessarily construction management expertise – to successfully drive the outcomes of the project. They also require some understanding of IT systems, staff, marketing strategy and more. Only then will the organisation reap the strategic benefits of higher management-level expertise. With the right approach to project management and creating repeatable systems, care home organizations can seize market conditions and drive growth, while delivering quality outcomes through scalable building blocks.

 

Posted on

Professional Consultancy Responds to Health and Social Care Challenges

As people in the UK live longer, demand for residential care and nursing homes is growing, as are our expectations of the standard of living they will provide.  Dean Jones  offers insights about the value a professional consultancy has for overcoming the challenge and driving value for patients.

The current state of affairs

As a result of some well-broadcasted care scandals that attracted extensive, and in some cases, damaging media attention, the government has responded with cuts that are impacting local authority (LA) fees and resulting in far tougher  Care Quality Commission (CQC)  policies.

Office for National Statistics (ONS)  Projects That by 2035 There Will Be 3.5 Million Uk Residents Aged 85 and Older, Compared to Only 1.4 Million Currently

In spite of this, the “extra-care” – or Residential Elderly Care (REC) sector – continues to overcome these challenges, attracting new investments, particularly into new-build care homes. These are specially designed, owner-occupied, self-contained housing, often with round-the-clock support and meals and sometimes with nursing assistance.

A typical pattern is for owner-founded care home operators to reach a growth limit, based on the founder’s management capacity, access to capital and appetite for risk. They cease to invest in new capacity and don’t benefit from economies of scale which can be passed on to commissioners. Public markets typically do not fulfil their function as a supplier of capital in the case of healthcare services, because they generally demand relatively modest gearing.

There’s a widely recognised need across all health and social care market segments for innovation and system change, as well as capital investment in new services. A private equity investor is well placed to leverage technical services to strategically programme and project-manage Residential Elderly Care (REC)  public real estate schemes across their entire lifecycle.

Supply and demand challenges

Today, professional healthcare businesses and registered social landlords (RSLs) are the main providers of new capacity, period. Since 2008, private and voluntary status providers, who service 92 percent of all Residential Elderly Care, have reported an upswing in demand and occupancy. Paradoxically, as adult social care budgets are decreasing and the provision of residential care by the  NHS  and local authorities has shrunk, the number of UK people who require help and support is rapidly increasing.

The Increasingly Ageing Population of the Uk Appears to Be Underpinning the Overall Rise in Rec Capacity and Occupancy

While Local Authorities (Las) are seeking to divert placements to inexpensive non-residential/domiciliary-based alternatives, the increasingly ageing population of the UK appears to be underpinning the overall rise in REC capacity and occupancy. Britons are living longer than ever. The  Office for National Statistics (ONS)  projects that by 2035 there will be 3.5 million UK residents aged 85 and older, compared to only 1.4 million currently. The cost of caring for these residents is also forecasted to increase. For example, caring for a person with dementia will increase to $1,142,677 by 2025 and $2,092,945 by 2051. In total the government estimates that 1.7 million more adults will require some type of care and support over the coming decades.

As a result, the current number of nursing and residential care homes in the UK (over 381,000) will need to almost double over the next 20 years to cope with rising numbers of people aged 85 or more.

dependent-100342

A bright future?

The demand for care will continue to rise as a result of life expectancy increasing and ageing. A robust REC independent sector arises primarily from the net increase in residential demand, and more recently, improved occupancy. These are the result of a number of competing forces:

  • Demographics, with the ageing population expected to drive the demand for health and social care.
  • Outsourcing, the long-term transfer of residents from LA homes to independent care homes.
  • Severe financial constraints, at least over the next five years, as the government – which pays for the bulk of health, social care and special education – seeks to eradicate the public expenditure deficit and restrict new builds.
  • Outdated assets, or older care homes that no longer meet needs.
  • Consolidation, a trend within segments of the independent sector.
  • Maturity, against a currently immature healthcare market.
  • Efficiency, highlighted by the “Nicholson challenge” for the NHS to make £15 to £20 billion in efficiency savings between 2011 and 2014. (It costs the NHS approximately £3,000 a week to care for elderly patients with no clinical need to be in a hospital ward. By contrast, it comes to about £1,000 per week for a residential care home provider.)
  • Demand and Occupancy. Unless the supply of new builds increases (currently by approx. 7,500 beds p.a.), it’s possible that some regions may see bed shortages, driving up LA fees.
  • New Technology. Progressive management capabilities in leveraging technology and strategic collaboration will constitute the formula for success and sustainability in the new healthcare business environment.

While a longer life is welcome news for millions of Britons, it could ironically trigger a public service meltdown as our national health system is stretched to its breaking point. Local authorities and NHS trusts retain a significant role in delivering services, with 75 percent of nursing home places funded by the public sector. There exist ever-increasing opportunities for private care providers to take some of the strain from NHS and ease bed-blocking by caring for patients, mostly elderly, in a residential setting when there is no clinical need to be in a hospital ward.

The REC Sector Could Potentially save the Nhs Billions of Pounds.

A combined approach to health and social care and some innovation is required for this savings to become a reality. In addition, Care Home Operators have a unique opportunity to grow their businesses and benefit from economies of scale, leveraging the expertise and resources of a professional consultancy. In doing so, they’ll have necessary resources and systems to bid for significant re-provision of services tendered by local authorities.

About Dean Jones

Dean is an Associate in AECOM’s Programme Leadership Practice. Dean joined AECOM from Care UK, the UK’s largest independent provider of health and social care, where he was a Programme Manager and delivered a £250m investment growth programme over 2012/15 which increased Care Uk’s number of homes circa 33%. Dean was also Programme Manager for a £60m Suffolk programme to build ten new care homes and ten day clubs, bringing much needed additional nursing and specialist dementia care to the Suffolk community.

Posted on

Container City, Trinity, Buoy Wharf, Docklands

Containers have long held an  attraction for designers as the  ultimate off-the-shelf industrialised,  transport ready, stackable house  component. They are particularly  attractive in short term  developments because they  can be picked up and moved  elsewhere when the term comes to  an end. All they need are proper  doors and windows, fitting out with  plumbing and electrics and, hey  presto, low-cost hi-tech cool homes  for all.

Container City is the brainchild of  Eric Reynolds, Managing Director of  Urban Space Management who was  looking for a way to address the  problem of providing space at a construction cost low enough to ensure affordable rents for artists and creative startup businesses.

Constructed from redundant shipping  containers the first phase, completed  in 2001 was originally three stories  high and provided 12 work studios.  In 2003 a further floor was added  providing 3 additional live/work  apartments.

The containers were pre-fabricated  off-site and upgraded as necessary  to provide the desired thermal and  acoustic performance standards and  to meet local building regulations.

Developer:  Urban Space Management

Architect:  Nicholas Lacey and Partners

Principal Supplier:  Container Space Ltd

 

As seen on