Breaking the mold: How Crossrail’s Innovate 18 program works
Crossrail is Europe’s largest
infrastructure project.
The £14.8 billion rail line will link four
major London economic centers: Canary Wharf, the financial district, the West
End, and Heathrow Airport. It will be integrated with other transport services
and increase central London’s rail capacity by 10 percent. Scheduled to open in
late 2018, Crossrail is running on time and on budget. In short, it is on track
to success. One reason for that is Innovate 18, our program to identify and
implement new ideas.
The construction industry has historically
been slow to pursue innovation and sometimes seems reluctant to encourage it.
There are structural issues as well. The industry is fractured, and its
procurement processes seldom include incentives for innovation and R&D
generally, which are limited by its tight profit margins. Finally, companies
tend to see projects not as part of a pipeline but as unique; this mind-set
reduces their ability to transfer innovations from one project to another. Many
industries invest 5 percent or more of their revenues in R&D; for British
construction, that figure is only about 0.5 percent.
However, there are hints of change. During
the construction of Heathrow’s Terminal 5 in 2008 and of London’s 2012 Olympic
infrastructure, the clients promoted the idea of creating a more systematic approach
to innovation. Because the client was talking, the construction industry
listened. Crossrail was in a good position to learn from these experiences—its
program director, Simon Wright, worked on the London 2012 games and has also
been a senior executive at Network Rail, which maintains and upgrades the
national rail infrastructure.
As part of a relentless focus on
innovation, we explicitly sought to build on the practices demonstrated in
these projects. Working with London’s Imperial College, we defined an
innovation strategy and processes for implementing it—the first step in what
became Innovate 18, the Crossrail innovation program. Its introduction sent a
powerful message that it was OK to generate new ideas, something that is not
always typical of major construction projects.
At the same time, we took practical steps
to engage the most important members of Crossrail’s supply chain. We wrote to
these chief executives and set out our commitment to innovation and to sharing
ideas. We then asked them to pay £25,000 into an innovation fund—and pledged to
match each contribution. All our major contractors joined, creating a pool of
£750,000. In the context of a £14.8 billion project, this is a modest sum. But
by putting skin in the game, we and our suppliers demonstrated our mutual
commitment to promoting innovation.
We encouraged our contracting partners to
share their intellectual property and to release ideas buried deep within their
supply chains, often from small and midsize enterprises. Initially, we asked
the contractors to trust that they would benefit from doing so. In this sense,
taking part in the program was an act of faith—there were few precedents. But
from the start, people were enthusiastic; innovative ideas flowed into the
portal. Many early ones focused on safety, but soon people saw the opportunity,
and significant innovations began to be submitted in a variety of other fields
as well.
Early examples included a first in the
United Kingdom: the use of telescopic excavators, which delivered significant
financial savings. Also, the first digital ideas began to appear; they were to
bring more significant savings later. These early successes were enough to
encourage the supply chain, and with innovation rates staying high, confidence
in the program was maintained.
By early 2013, Crossrail’s four-person
innovation team, which reports to the strategic-projects director, had
developed a conceptual model of collaboration, culture, and capabilities. We
identified four innovation themes: health and safety, efficiency,
digital–physical integration, and sustainable solutions. This approach allowed
us to concentrate our efforts and therefore to realize opportunities that we
would otherwise have found more difficult.
·
Collaboration. The innovation team
worked with every project in the Crossrail program to establish a network of
innovation champions and then helped them set up forums and workshops to
support grass-roots efforts.
·
Culture. We called our philosophy
“pinching with pride.” In British English, “pinching” is a slang term for
stealing. In the context of Innovate 18, it meant sharing and openness—a
willingness to show and tell ideas. The sense that building Crossrail
successfully was a collective activity began to pervade our work, in part
because all the innovation efforts explicitly encouraged a collaborative
approach.ƒƒ
·
Capabilities. For the innovation
program to work, we needed a way to create, share, and challenge ideas and then
to govern their development. So the innovation team set up a database where
participants could upload and discuss suggestions. A working group and a board
decided which ideas to finance and in what order.
Urban
mobility at a tipping point
These innovations have ranged from basic
safety features to new types of engineering facilities, new materials, improved
sensor systems, and digital enhancements. The total cost of the program (for
Heathrow, contractors, and other partners) was about £3 million; we estimate
that the benefits already amount to three times that figure, which will probably
double by the time we are done. And we believe that there are also intangible
benefits, in the form of improved reputation and collaboration.
The intangible benefits of collaboration,
performance, and reputation are significant to a program of Crossrail’s
complexity and scale. Our experience of the Innovate 18 program was that it
transcended contract and other boundaries and encouraged the collective effort
to succeed, and that in turn helped to improve our performance and
collaboration between colleagues.
One important lesson of the Crossrail
experience is that clients need to develop business and commercial models that
encourage the supply chain to participate—for example, through contracts that
share the benefits of innovation among the parties. If clients take the lead in
this way, the construction industry might begin to invest more to make
innovation the norm rather than the exception. There is precedent for this. In
both the automotive and aerospace sectors, companies have collaborated for
years to focus scarce resources on strategic priorities, such as developing
engines, so they can share costs and risks and compete more effectively.
The Crossrail innovation program will not end when the
ribbon is cut. The Thames Tideway project has adapted our model, and we are
sharing our database with other national infrastructure efforts. Completing
capital programs more efficiently across the entire life cycle not only adds
value but also builds public confidence—and that may be the most important
innovation of all.
By Andrew Wolstenholme
http://www.mckinsey.com/industries/infrastructure/our-insights/Breaking-the-mold-How-Crossrails-Innovate-18-program-works?cid=other-eml-alt-mip-mck-oth-1605
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