Management lessons - letter to the FT

Published in The Financial Times: April 2 2008 03:00 | Last updated: April 2 2008 03:00

From Prof Alan Braithwaite.

Sir, It is important to remember that the construction of Terminal 5 at Heathrow has been on time and to budget and has highlighted new ways of managing major construction contracts. This is a success that the UK can be proud of and is attributable to a collaborative style of contracting where everyone takes responsibility and accountability. When set alongside the fiasco of Wembley stadium, we can only hope that the organisers of the London Olympics have learnt from the exercise.

I stand on the outside of this project but can draw on considerable corporate memory of complex automation disasters. From that experience the current difficulties with T5 baggage appear to relate more to total system design, too high a reliance on the technology and a lack of risk management. Operational resilience is designed in or out at a very early stage in such a project and then reinforced by meticulous planning and execution of commissioning, training and "go live".

Given the quite typical prior experiences at airports such as Denver and Hong Kong and the disastrous introduction of new distribution centres at J. Sainsbury (to name but three), the lack of corporate memory and learning is troubling. It should not be surprising that the unions have moved swiftly to distance their people from this and point out that they warned against how "go live" was being handled.

This experience was almost certainly predictable if the right questions had been asked at the right time, and preventable by operational excellence based on thorough risk management assessment. The outcome is that BA's profits and share price will be depressed, from which it may recover in due course. BAA/Ferrovial will continue to attract opprobrium.

It is a shame that, by all accounts, BAA and BA did not truly follow during commissioning and implementation the collaborative principles with clear accountability on which T5 was constructed. They will recover; the question is have they and the wider corporate body learnt?

Alan Braithwaite,
Chairman,
LCP Consulting, Berkhamsted, Herts HP4 2ST