News & Insights

Our Expert's Shared Value Experiences

Its Winter 2017, Wolverhampton, UK. I’m stood in my back garden in the freezing cold, no coat, and getting lashed by the vertical rain. I’m in a heated argument with my builder who has constructed our home extension a metre too high by mistake. Our neighbours have complained, the local council planning department is involved, my architect doesn’t want to know, and the builder wants more money.

It’s a new experience for me, this, being the Client. I’ve employed the best people I could find to do the job, but somehow, it’s gone wrong. As the rain begins penetrating the last of my dry layers and I become aware that the builder is not going to budge on his position, I realise two things. Firstly, that I am going to end up out of pocket unfairly, and, secondly, that I will never hire this builder or architect ever again.

You may be wondering what all of this has to do with Shared Value. Well, quite a lot actually. In our market, we typically find ourselves in the relationship of Client, and Contractor, with us being the latter. In this case, my values, as the Client, were simply based on wanting to complete my home extension project to the desired quality, cost and time. My Contractor’s values, i.e. the Builder’s and Architect’s values of wanting to minimise risk, maximise profitability, were different to mine. This was fine when everything was running perfectly. But when they weren’t, the pull of those different values put us in adversarial positions that led to increased costs, delay, damaged relationships, and a desire from my side as the Client of not wanting to work with them ever again. Sound familiar? We’ve all had bad experiences with products and services that have put us off using certain companies or individuals again.

But what if there is a better way? What if we never fell out, never felt the need to blame one-another, always wanted to work together, on project after project, forever? Sound unfamiliar? Sound like a naive, idealistic concept straight from the desk of Dr Timothy Leary? Maybe not.

The concept of happy clients, happy contractors and staff associated with both isn’t a new one. It’s been referred to as the “Holy Grail of Asset Management” and has been achieved by some organisations that consistently achieve high rates of satisfaction in staff surveys (Lloyd, 2010). Clients consistently report satisfaction with the products or services delivered, staff turnover is low and annual revenue is increasing.

So, what's the secret?

Well one of the main features of such organisations, is in the sharing of their values, both within the organisation, and outside. In our case, this relates predominantly to Cardno’s values of:

  • Safety: creating a safe environment for our people, clients and the communities we impact should always come first.
  • Integrity: knowing and doing the right thing will lead to satisfied employees, clients, investors and better financial performance.
  • People: what’s good for our people, communities and the world we live in, can be good for profit.
  • Excellence: the delivery of high quality services creates value for clients, communities and investors.

 In the markets that Cardno IT Transport operates in, this is rarely the development partners or funding agency, but more likely to be Government Agencies or Ministries in the countries we operate in. In this market, donor interaction is more limited and in some cases we may rarely, if at all, interact with them. In other cases, and often with the more broad Cardno International Development service, there is no development partner and the project is directly funded by governments from their own revenue.

As such, integrity and excellence rule. Clients have typically employed us to solve a problem that they cannot solve themselves. When in such a position, the Client is actually very vulnerable; the fact that they need professional assistance means they have to put their trust in us to deliver what they need. In many Client and Contractor interactions, this is the point at which values diverge. The Client wants the best possible service and solution to their problem, the Contractor typically wants to maximise its revenue and profitability. It is this difference that is so often at the root-cause of many failed development projects. This may evidence itself in the following:

  • Production of a stack of glossy reports and documents that sit on a shelf gathering dust
  • Development of the wrong solution to the problem
  • Failed downstream project implementation
  • Client dependency on an ongoing service or product that they cannot afford to pay beyond the short-term.
But what does this look like in practice? Well, it’s about applying our values to all of our client interactions, and putting the Client at the centre of it all.

In many cases, developing the wrong solution can be highly profitable to a Contractor and the Client may not be aware of the failures until long after the Contractor has completed their work, received payment, exited the project and in some cases the country. In this example, the Contractor would have succeeded in maximising their profitability, but at the Client’s expense. However, in time, the Client will recognise this failure and is likely to harbour resentment towards the Contractor. It may take time for the client to realise, but nevertheless, reputational damage, damage that won’t show on the profit and loss accounts for that year, will have been incurred by the Contractor.

Beyond the interests of the Contractor and their shareholders, such an approach cannot really be considered as “Development”, since it does not actually help the Client or their country’s citizens to progress national development. It actually has the opposite effect, such as encouraging clients to focus on the wrong thing, or just as bad if not worse, encouraging their dependency on a product or service that has ongoing costs which they cannot afford. In such cases, it is often only a few years before the “solutions” developed no longer function, dragging the Client and their country’s progress backwards.

It’s an all too familiar story, but one that differentiates the work some of our competitors do, from the work that we do. The truth is that many of our competitors have a relatively narrow range of skills which they would prefer to implement in the same way, again and again. Such an approach is likely to maximise short-term to medium-term revenue, since there is increased efficiency in doing what they already know, and less obvious risk in the application of tried and tested methods, even if these come at the cost of innovation and meeting the Client’s needs.

The Cardno Difference

Where Cardno is different comes down to a simple change in mind set, namely that the Clients’ interests are just as important as our own. Such an approach may sound obvious, but in reality adopting this mind set requires organisational bravery since it means stepping outside of the known, and into the unknown, the consequences of which are not obvious until after the event. However, this approach is in itself the nature of development work. In our markets, development is a journey, a long road to improving the lives, and prosperity, of citizens in the countries we operate. The goal has to be that at the end of each project, the work we did has improved development in a sustainable manner, and that any additional work done in future builds on the work completed, rather than repeating it or taking things in a different direction because we failed to do our job properly. As Experts in our field, we have to be big and brave enough to say that we will work alongside our Clients with a mutually shared vision of creating improvement, and that when we reach the next stage of improvement, we believe in ourselves enough to know that whatever the next challenge is, we are good enough to face it.

Excellence, integrity and belief in our people has to underpin this approach, since if we do not believe in ourselves as being capable of facing complicated projects and the challenges they present, then why should anyone else?

Summary of the Client First Approach is, and what it isn't!

What it is

What it isn't

Listening to what the Client wants and asking open questions where necessary

Telling the Client what they’re getting and asking closed questions to obtain predetermined answers

Getting to the bottom of the issue together

Doing the bare minimum possible to meet the project terms of reference

Developing tailored solutions on a case-by-case basis and discussing with the Client

Recommending a product or service you are biased towards in some way

Prioritising the reputation of the Client over self-interest

Prioritising self-interest over the reputation of the Client

Speaking up in a professional manner and explaining your thought process, if you believe the Client is going in a direction you know will not be in their best interests

Keeping quiet or agreeing with the Client even if you know they are making a serious mistake, or attempting the shout them down when you don’t agree with something

Applying the correct amount of resources to ensure projects run smoothly and to the Client’s requirements, whilst generating a fair profit

Squeezing every last cent out of the project for the sake of profitability at the cost of excessive risk exposure, failure to genuinely meet Client requirements, or compromise safety to anyone associated with the project

Adopting a long-term approach and understanding that doing business in a sustainable manner is all about trust

Underbidding work at a price that makes delivery of the job to meet the Client’s requirements impossible, or obsessing over short-term gain at the expense of long-term growth and profitability

Understanding the concept of social capital and the value of things that cannot be easily measured through a money-measurement ideology Considering only those things that can be measured directly through monetary value as important
Being an equal partner in achieving the Client’s objectives

Looking for an opportunity to take the client for a ride when the opportunity presents itself

Key Points to conclude

  • Our Clients’ interests are typically based upon improving the economic, social and environmental situations in their country
  • Sustainable development is about progression first and foremost, not self-interest
  • Working with Clients whose values we can share in the delivery of projects is relatively simple and is good for everyone involved
  • Listening to what the Clients’ needs are, and addressing these is paramount
  • Relationships based on trust between Clients and Contractors are essential for good project outcomes, and the long-term sustainability of the Contractor in particular
  • Taking a long-term view of how we go about business will lead to better outcomes for our Clients and will likely lead to more work, ensuring the longevity of the Contractor
  • Making profit on projects is essential but should not be the only consideration, especially in cases where safety or reputation are compromised.

Author: Andy McLoughlin is the Managing Director of Cardno IT Transport. He is based in London, United Kingdom.