The Dangers of Silo thinking in Infrastructure Development

The reinforced autoclaved aerated concrete (RAAC) scandal has demonstrated the dangers of prioritising short-term cost savings during capital investment programmes.

This focus on capital cost over and above wider, longer-term considerations is one example of ‘silo thinking’. Silo thinking in capital investments and complex transformations creates sub-optimal results. Considering whole-life benefits and value while investing for the long term is crucial – especially in the face of climate change. We need to urgently move to a whole-life, whole-system approach that accounts for the socio-economic and environmental conditions of the future.

As project managers, engineers and infrastructure leaders we can often be very ‘output’-focused. When working on capital projects and programmes, the traditional view is to think that handover is the end of the story. But the end purpose of any capital investment, complex transformation or infrastructure build is to deliver benefits and services to clients, stakeholders and ultimately, wider society. This means we must focus on the purpose of the assets that we help to create, develop and build. It means taking a whole-life (cradle to cradle) approach. It can take months and years to deliver a project, but the assets and transformations can be in service for decades. Holding the promised benefits and outcomes to the end user front and centre throughout the delivery of capital projects is essential.

We’re living in volatile and uncertain times, on a path to global temperatures rising by 2.7°C¹ considering current policies and action. We must accept the reality of warmer, wetter weather, and an increase in frequency and severity of extreme weather events. Our physical infrastructure, organisations and supply chains need sufficient resilience to continue performing and delivering services to clients and society within these new weather norms. Leaders, engineers and project managers must deliver that performance within a shrinking carbon budget, while also seeking to enhance biodiversity and nature. We have opportunities to contribute to levelling up and social value throughout project delivery and beyond. Every pound we spend must deliver as much benefit as possible.

We’re working within a system in which capital cost is often the focus when setting budgets. This can create incentives to reduce capital costs while losing sight of the impact on whole-life costs. While RAAC has dominated recent headlines, the underlying issue of silo thinking isn’t new. When making decisions about materials and activities, focusing on a single metric such as cost or performance will likely lead to unintended consequences.

For example, a focus on the amazing insulating properties of asbestos led to its widespread use in the UK last century. But wider considerations, such as the impact on human health or end-of-life disposal, were overlooked. A whole-system approach at every stage of a project is necessary to address this. This means thinking beyond an individual asset or project into a wider system of assets, services and environment. This approach can initially feel complex, but it can also deliver significant benefits.

Circular economy tools allow decision makers to take a broad view beyond cost, to include biodiversity, social value, and environmental impacts such as waste. The World Business Council for Sustainable Development’s Circular Transition Indicators (CTIs) is a good example. From rails to roads and sewers to schools, significant parts of our infrastructure is coming to the end of its design life. Many of these assets were built without consideration for maintenance or end-of-life. Had they been designed for modular repairs, we could be identifying elements for simple replacement rather than complex, bespoke interventions or full-scale demolition and replacement. We’re increasingly seeing the ‘right to repair’ emerge as a theme in consumer goods that have a lifespan of years.

Adopting circular principles in infrastructure assets, with lifespans of decades and centuries, will necessarily take longer – but is nonetheless essential.

Our business cases need to shift too. They need to take full account of biodiversity and nature, social value, carbon and the environment, as well as resilience and adaptation. This is fundamental for organisations to achieve the ambitious sustainability targets they have set themselves. The only way to achieve their targets is for these factors to be embedded throughout each of the five cases (strategic, socio-economic, commercial, financial, and management) and across the asset life. For example, management cases need to include robust benefits management, and strategic cases need to measure non-monetised benefits in detail.

There’s little value in a project delivered to cost and time that fails to deliver in service and benefits. We must move away from the traditional ‘silo’ priorities of cost, scope, risk, and time. Regardless of the type of capital programme, whether we’re building new infrastructure or delivering a complex transformation, a failure to take a ‘whole system’ approach will cost us all dearly.

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