Why your QS is right to reject your portfolio strategy

The project QS who rejects your portfolio strategy is not a Luddite. In fact, she may be the only person in the room reading the numbers as they are written.

Consider the numbers from her perspective. The central team asks her scheme to pay for common designs that don’t reflect her stakeholder needs, central support she did not ask for and extra reviews she could do without, in return for benefits that arrive later, spread thinly across other projects, credited to budgets outside her control.

She is being judged on immediate affordability, not on the value of a shared investment whose payoff is unclear, deferred and buried in a business case she has never seen.

Some would call her view narrow, a failure to see the bigger picture but, viewed through this lens, it is completely rational.

We think in portfolios and deliver in projects

The industry has, on paper, made up its mind. Every conference agrees that public construction should think in portfolios. The Construction Playbook expects government departments to buy buildings as portfolios and programmes.

When the Construction Innovation Hub analysed a five-year, £50bn pipeline of social infrastructure, it found around 70% of government buildings share consistent geometric characteristics. The researcher Daniel Davis calls this the “fat middle”: the territory between bespoke one-offs and identical mass production. The question is why don’t we benefit from that repetition?

Declaring a portfolio does not create one. Unless funding, decision rights and accountability also operate at portfolio level, the organisation remains a collection of projects with a common presentation template

The standard answer blames the resisters: parochial project teams, defensive professionals and stakeholders insisting their needs are unique. The more uncomfortable answer is that the instruments governing delivery, including business cases, approvals, contracts and accountabilities are still written in project grammar. Portfolio logic is discussed in strategic reviews, but project logic remains at the heart of process.

Declaring a portfolio does not create one. Unless funding, decision rights and accountability also operate at portfolio level, the organisation remains a collection of projects with a common presentation template. Our QS is not defying the system, she is obeying it.

Supply chain logic

Over the last decade, the top 100 contractors had a median pre-tax margin a little above 2%. Those margins cannot bankroll speculative product development. When one tries, two-stage open-book procurement will quietly confiscate the return: investment in common solutions sits in overhead, while the savings appear in measured works, which the client keeps.

Over five years, several major contractors each sustained healthcare workloads of at least £135m a year and spent or managed roughly £10m in design fees. As a product-development budget that would be serious money if it were pooled and governed as such. Scattered scheme by scheme, it bought many of the same solutions several times over.

The sceptics have history on their side

Before the reformers conclude the answer is simply more central grip, history deserves a hearing, because it largely belongs to the sceptics.

Across government digital services, estates and procurement, centralisation-first reform has repeatedly absorbed billions while falling short of the savings promised. Christopher Hood and Ruth Dixon’s study of three decades of UK central government found that successive reforms largely failed to cut costs. Christopher Hood and Ruth Dixon’s study of three decades of UK government reform found no evidence that centralising efficiency drives produced net savings.

The pattern is familiar: ambition set everywhere, for everything, at once; blueprints designed at the centre using filtered information; governance that grows until it consumes the savings it was meant to unlock. Decisions that once took a phone call take a committee. When it stalls, the system reverts to project-by-project delivery until the next reform arrives.

The answer is not to choose between project autonomy and central control, or between some imaginary state of efficiency and waste. It is to decide what the centre must own, what projects should share and where local discretion - around issues such as stakeholder needs or supply chain capacity - genuinely adds value.

Choose inefficiencies, don’t inherit them

The point here is that the in the drive for efficiencies and standardisation across projects we do not need to eliminate all variation. Instead we need to decide consciously which variations are worth paying for.

First, fund the capability before demanding the behaviour. Portfolio efficiency requires money, people and authority. If every initiative must repay itself within one project, shared investment will always lose to local optimisation, even when the projects are collectively more expensive.

That investment is not limited to standard designs or components. The reusable asset may be a data structure, an approval route, a supplier relationship or a lesson the next project does not have to buy again. These are portfolio assets, so the business case should measure value across the pipeline, not scheme by scheme. That means being honest about coordination costs, optimism bias and the fact that early projects may bear costs while benefits only become visible in later ones. In other words, if you want portfolio benefits don’t pretend every individual project will see an immediate return.

Second, be able to answer three questions about your pipeline. Where are we deliberately the same? Where are we deliberately different, and why? And how far, on the evidence rather than the enthusiasm, can we increase the first without damaging the second?

At Akerlof we have published our attempt at making this choice honestly: a Portfolio Efficiency Framework in which the longest chapter, tellingly, is about what goes wrong. It offers a disciplined way of deciding what should be common, what should remain distinct and what inefficiency, or bespoke variation on a project, you would rather pay for.

That choice is already being made in your organisation, whether deliberately or not. You can run an accidental portfolio that wastes repetition or build a deliberate portfolio that learns from it.

The QS was never the obstacle. Give her a business case she can see, make her accountable for delivering it, and ensure her project shares in the benefit, and she will build the portfolio for you.

 Jamie Hillier is a partner at Akerlof