Driving commercial performance: insights from industry pioneers
We need to move away from the fragmented, transactional contracting and commercial arrangements to unlock greater value across major programmes. As programmes grow in scale and complexity, short-term monetary objectives are no longer sufficient.
A bold and fresh approach is needed to transform commercial performance. We need to challenge our thinking to encompass a broader set of outcomes, establish the right environment for commercial success and create a lasting legacy.
As part of our series, Transforming performance of major programmes, we spoke with three industry leaders to hear their insights on what is it that drives commercial performance:
- Ruth Todd CBE, Senior Advisor, Operations and Supply Chain Director at Rolls-Royce, former Chief Commercial Officer at High Speed Two and Programme Director at the Vaccine Task Force
- Nic Hillier, Commercial Director at Lower Thames Crossing
- Paul Doherty, Procurement Director at Heathrow Airport
Key takeaways from the discussion
Our panellists addressed three specific areas: how to align commercial models with delivery models, whether new models are delivering better outcomes and the commercial capability for the future. Key takeaways include:
Adapting commercial models: There is no one-size-fits-all approach.
Ruth Todd CBE said:
When dealing with major programmes, there are so many unknowns. The challenge we’re set is how to set out on the right footing. How do you do that sustainably over the life of the outcome you're trying to achieve? There’s no perfect solution. You're always trying to be adaptable.
Contractual relationships: It is critical to ensure that the intent of commercial structures is maintained through all levels of contracts, avoiding erosion as contracts are awarded down the tiers.
Continuous improvement and agility: Implementing and maintaining the commercial model requires ongoing effort. Strategies must be adaptable to unforeseen challenges, while fostering trust and collaboration.
Honourable intent: Successful programmes thrive on shared goals and honourable intentions from all parties. Trust is critical – optimising solely for individual gain can undermine the entire programme.
Paul Doherty commented:
Understanding intentions, what our supply chain wants from an arrangement upfront, and being clear about that, is probably where we need to improve.
Leadership and innovation: Clients must lead by example – setting clear mandates and creating the right environment to foster innovation.
Nic Hillier said:
It is challenging for a client, but innovation will not happen if we do not start taking on some more risk. Behaviours are critical on any programme and the commercial model has a lot of influence on those behaviours.
Listen to the full conversation
Listen to the full conversation for more detailed insights around driving commercial performance and the importance of aligning commercial and delivery models to fully realise the potential of major programmes.