More to Nation Building Than Big Bucks

Friday, 23 September 2011

The Australian   The government is arguing that the National Broadband Network will have the nation-building impact of the Snowy Mountains Hydro-Electric Scheme. The Snowy was exceptional in many ways and has had a lasting effect on our nation. Like the Snowy hydro scheme, the NBN requires a big chequebook, but that may be where the similarities end.

My interest in the issue is personal and professional. At the personal level, the legacy of the Snowy scheme has featured large in my life. My grandfather was William Hudson, head of the scheme from 1949 until 1967, just before completion. He headed the scheme with a passion, energy and drive that attracts the near-universal admiration of informed commentators (regardless of their view on the outcomes) and those who worked on the Snowy. He was commonly known as the "Old Man of the Snowy", and I well remember him and the values he stood for. The memories have shaped many of my views about leadership and management. At a professional level I have always been fascinated by the ingredients for the success of a government-owned scheme on this scale because there is no other quite like it.

The challenge of turning the NBN into a Snowy-like success story is threefold.

First, the Snowy was intensely focused on delivering and communicating clear and tangible benefits to the consumers and farmers. Malcolm Turnbull has pointed out that a cost-benefit analysis was completed before construction on the scheme began. He is right, but it went much further. At the time the first power station was completed at Guthega dam, the future of the scheme was still tenuous. Sydney was suffering from blackouts during the evenings when demand for electricity was highest. Once commissioned, the power station could deliver electricity at peak hours on short notice. The Snowy leadership was relentless in ensuring that these benefits were delivered and communicated to the community.

I remember my mother describing the cheers at her Sydney boarding school when the lights went back on after a black-out. It was understood that the Guthega power station was responsible for solving the problem.

The widespread understanding of the benefits built community support for the scheme, resulting in cross-party support.

So far, the promoters of the NBN have struggled to paint a picture of benefits that are palpable, and don't need to be imagined. The McKinsey-KPMG implementation study did not set out to demonstrate benefits. Without real understanding of what internet speed of 100 megabits per second or more delivers, public interest will not be held for very long. The present picture of tangible benefits is limited to applications with narrow appeal, such as gaming, videoconferencing and e-health. (Arguably the last does not need anything like the full NBN.) Even if a rigorous cost-benefit analysis is completed (as it should be), the challenge is to demonstrate benefits as vivid and far reaching as those of the Snowy.

Second, the scheme brought together and developed skills across a diverse group of people, many of whom had recently fought against each other in World War II. More than 70 per cent of the 100,000 or so who worked on the scheme were immigrants. Workers came from Austria, Finland, Jordan, Russia, Germany, Norway, Cyprus, Czechoslovakia, Hungary, Poland, Turkey, Estonia, France, Portugal, Italy, Greece, Romania, Ukraine and many other countries.

There is no sense in which the NBN is seeking to bring together a diverse group of people united with a common purpose. Perhaps this is asking too much. However, it is ironic that the same politicians who are hailing the nation-building benefits of the Snowy are also posturing about limits on immigration and appear blind to looming skill shortages.

Third, the Snowy was innovative in industrial relations, contracting and what we now call organisation design. While it was unionised, nearly all the individual projects were tendered to private-sector companies from Australia and offshore, using innovative contracts with performance incentives.

The execution of key projects across the Snowy was decentralised and the leadership of the scheme was insulated from political interference. At the same time, the disparate and remote projects were connected by a vision of a better Australia, values of hard work and leadership focused on performance. Tunnelling records were regularly broken. Budgets and deadlines were almost always beaten. Traditional Australian workforce practices, such as smoko, were abolished and replaced by longer shifts and more efficient work practices. Workers were well remunerated, with large bonuses for reaching incentive targets, but the performance ethic was intense. The only significant exception to this was Eucumbene dam, which was initially managed by the Department of Public Works but was subsequently contracted out to the private sector because of poor performance.

My grandfather used to tell the story of driving between construction sites in the Snowy, when he came across a road crew, lounging around and clearly not performing their jobs. He jumped out of the car and dismissed the workers, only to be told by a smug supervisor that they weren't employed by the Snowy but by the Department of Main Roads. He said that in hindsight he should have known they weren't Snowy workers.

By the standards of the day the scheme made great leaps forward in safety and technology. This extended to making seatbelts compulsory, development of rockbolts, soil conservation and the use of computers in engineering.

A government-run infrastructure project costing tens of billions of dollars doesn't automatically qualify as nation building. The difference comes down to leadership and execution: substance, not spin. The recent rollout of federal government programs provides little reason for optimism. To achieve Snowy-like outcomes, the NBN will need to throw away this government's rule book. Unless it does, attempts to draw a parallel with the Snowy scheme should invite scepticism.

Angus Taylor is a director of Port Jackson Partners. The views expressed are his own.