KPI Workshop – The future of the construction industry KPIs

1. KPI Workshop – The future of the construction industry KPIs 1 February 2012

2. Background • Constructing Excellence responsible for publication of KPIs since their inception • Department for Business brought publication and data collection together in 2009 – CE and Glenigan appointed to take forward • Appointed to June 2012 with funding diminishing to zero • Full review of data collection methodology and the data collected and published carried out

3. Data collection methodology Key changes • Surveys now issued to all projects in Glenigan database • Survey issued within a month of a project completing on site • Surveys now issued electronically rather than on paper • Separation of project and organisational surveys

4. Data collection methodology What this has meant • Surveys issued to more projects has brought in more responses • Ability to provide more granular reporting of data • By project size • By region • By sector • By procurement route • Smoother experience for the industry

5. Review of the KPIs Why? • Aware that there had been parts of industry were not using the indicators as they were not fit for purpose • Lack of alignment with other measurement regimes • Danger of industry measuring lots of different things in lots of different ways – no ability to map trends or properly benchmark

6. Review of the KPIs What we did • Brought together a steering group from industry: • Richard Saxon CBE Consultancy for the Built Environment • Michael Bennett Highways Agency • David Bentley Glenigan • Rob Davis Glenigan • Nick Edwards Construction News • Keith Folwell BIS • Scott Mclew NSCC • Andrew Quirke City West Housing Trust • Andrew Thomas Centre for Construction Innovation • Jane Thornback Construction Products Association • Charles TincknellWillmott Dixon • Allan WilénGlenigan • Jon de Souza Constructing Excellence

7. Review of the KPIs Results • Reintroduced product manufacturer KPIs and widened M&E measures to all sub-contractors • Changed methods of measurement to convert as many as possible from being subjective to objective • Introduced a small number of new measures • Removed indicators not valued by the sector

8. Review of the KPIs New KPIs – Waste to Landfill • To go alongside existing waste produced KPI • % material diverted from landfill • Both indicators now can be filtered for just: • Demolition • Construction • Both

9. Review of the KPIs New KPIs – Responsible Sourcing • Part of Strategy for Sustainable Construction Strategy • % of material used secured under schemes that are recognised for responsible sourcing

10. Review of the KPIs New KPIs – Organisational Carbon Performance • To assist companies in their reporting against the Global Reporting Initiative • Measures of: • Carbon emissions from corporate travel • Emissions from corporate offices

11. Review of the KPIs New KPIs – Project Safety • Company safety KPI already exists • Project-based Accident Incidence Rate (reportable accidents per 100,000 man hours)

12. Review of the KPIs New KPIs – Apprentices • Many in the sector had already requested a KPI be developed to measure use of apprentices • Apprentice days x £100,000 project spend

13. Review of the KPIs New KPIs – Staff Leaving Organisation • To work alongside existing ‘Staff Turnover’ measure which calculates churn

14. Review of the KPIs New data for comparison – BREEAM, Code for Sustainable Homes, BIM • Three new positional questions to enable more opportunities for performance comparison • What BREEAM level did the project achieve? • What Code level did the project achieve? • Do you think that the project used Building Information Modelling?

15. Review of the KPIs Amended KPIs – Energy Use on Site • Existing KPI was being tweaked by individual contractors and so no benchmarking possible. Developed in partnership with Strategic Forum for Construction • New measure in line with ENCORD protocol and Global Reporting Initiative. Download new protocol from here: http://bit.ly/poOZ7Y

16. Review of the KPIs Amended KPIs – Equality and Diversity • Replaces existing subjective measure of project performance as rated by client. Developed in partnership with EHRC. • Now objective measures of level of employment and level of senior representation within businesses across the following under-represented groups in our sector: • Women • Black and minority ethnic people • Disabled people • Those aged 25 and under • Those aged 55 and over

17. Review of the KPIs Removed KPIs • Range of indicators not valued or used by the sector including: • Actual project cost • Actual project time • Subjective biodiversity indicator • Subjective general environmental indicators • Selection of questions that did not contribute to KPIs!

18. Review of the KPIs What comes next? • Post-project review indicators (surveys sent two years after completion) • Actual outturn cost • Predictability of energy use • Predictability of water use • Predictability of operational and maintenance costs • Level of post-project capital cost requirement • Local labour KPI • Anything else?

19. Government Construction Strategy • Data and Benchmarking Working Group – measuring the 20% • Supplier Relationship Working Group – related to KPIs • KPIs are one tool that Government may employ to ensure that they are getting best value from their construction spend

20. The overall KPI score

21. Overall KPI score – why? • Our industry loves a score! • Considerate Constructors’ • BREEAM • Code for Sustainable Homes • Encouraging improvement • Help companies understand where they may be weak • Identifying top performers – case studies

22. Overall KPI score - how • Developed with input from a major client and contractor • Aligned with the Construction Commitments • Approval from the Department for Business to explore • Scoring methods for both projects and organisations • Auditing on projects to verify scores • Data will need to be input into the CE KPI Engine to generate a score

23. Overall KPI score - projects Weighting • Waste 5 • Energy use - service 5 • Water - service 5 • Health and safety 15 • Apprentice hours 3 • Considerate Constructors Scheme 10 • Predictability - cost 15 • Predictability - time 15 • Client satisfaction - service 10 • Subcontractor satisfaction with payment 7 • Client satisfaction - product 10 ___ 100

24. Overall KPI score - organisations Weighting • Carbon 6 • Health and safety 15 • Equality and Diversity 3 • Staff turnover 3 • Training 3 • Employee satisfaction 3 • Qualifications and skills 3 • Investors in People 4 • Profitability 10 • Average of project scores 50 ___ 100

25. Workshop • Do you think the overall KPI score is a good idea? • What would you do to change the way it is calculated?

26. New services

27. The challenge • How to maintain the KPIs • How to ensure their independence • How to ensure that data remains anonymous • How to ensure that the data remains reflective of the performance of the industry as a whole • How to make sure what is generated can help drive improvement

28. Company reporting • Report comparing a company’s performance to that of named competitors • Would show KPI performance in a league table • Competitors would not be named in the report • Could be generic or focussed on particular types of KPI • Could be combined with Glenigan bidding report

29. Auditing • Work with a project team or organisation to provide an audit of KPI scores • Advice on how to improve KPI data collection processes • Post-project?

30. Awards • Invite the top scorers to put themselves forward for an annual set of Awards • Award per section of the Construction Commitments: • Commitment to people • Sustainability • Health and safety • Procurement and integration • Design quality • Client leadership

31. Best of Lists • Opportunity to publish lists of the top projects monthly and organisations annually • Construction News identified as a media partner • Would seek approval from each company before they were included on such a list • No plans to publish a full league table

32. More delivery of existing services • Training • In company • One to many sessions (KPI Masterclasses) • KPI Engine system for reports and benchmarking • Benchmarking clubs

33. Workshop • Would your organisation use any of the services described? • What other performance measurement activities would you like from Constructing Excellence?