Project, Programme & Portfolio Management

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BE1170 Project, Programme & Portfolio Management Stage E: Individual Project Portfolio focused on specific discipline “Explain the role and interconnections of Project, Programme and Portfolio management to innovation as a driver with sustainability as a key stimulant for change.”

Transcript of Project, Programme & Portfolio Management

BE1170 Project,Programme & Portfolio

ManagementStage E: Individual Project Portfolio

focused on specific discipline

“Explain the role and interconnections of Project, Programme and Portfolio

management to innovation as a driver with sustainability as a key stimulant for

change.”

Team: The Strings

Submission Date: Thursday 6th November 2014

Module Tutor: Robert Moehler

Word Count: 2185*

*Excluding all headings, diagrams, references, quotes,

tables and appendices.

Contents

Page

1.0 Introduction and Overview

3

1.1 Introduction

3

1.2 Overview

3

2.0 Interconnections and Communication

7

3.0 Coping with Innovation and Change

10

3.1 Innovation

10

3.2 Philosophy on Change

11

4.0 Governance in Portfolio Management

15

5.0 Summary 16

6.0 References

18

7.0 Bibliography

21

Northumbria University The Strings

1.0 Introduction and Overview

1.1 Introduction

“Explain the role and interconnections of Project, Programme and

Portfolio management to innovation as a driver with sustainability as a

key stimulant for change.”

How do we break down the above and establish the question? In

terms of Project, Programme and Portfolio management (PPPM),

current processes applied in the market today are to be analysed

and assessed for change; if necessary. Is sustainability is being

exploited at the expense of profit for business when reviewing

key drivers?

1.2 Overview

A survey conducted by McKinsey in 2011, states that organisations

include sustainability as a main key driver within and 57% have

integrated sustainability within their strategic planning

process. Within some organisations this is the key driver within

their business strategy planning and sustainable innovations need

to be interconnected within their PPPM (Bonini & Gorner, 2011).

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“More companies are managing sustainability to improve

processes, pursue growth, and add value to their

companies rather than focusing on reputation alone”

(Bonini & Gorner, 2011) www.mckinsey.com, Accessed online

22 Oct 2014

The project definition stage is where success or failure will be

determined and also be less disruptive for business (Winch,

Morris & Pinto, 2007). For ‘Greenality’ to succeed, this must be

included in the definition phase and be part of the ‘SMARTER’

process (Maltzman & Shirley, 2011).

Table 1.2.1 – The ‘SMARTER’ Concept (Maltzman & Shirley, 2011),

p.75

SMARTER

pecificeasureablettainableelated to the Goalimelynvironmentallyesponsible

In 2014, Marks and Spencer’s (M&S) produced a document entitled

‘Plan A’ with key drivers focussed on sustainability and emulates

what the McKinsey survey established. Their ‘stimulant for

change’ was initiated in 2007 to focus on three world-wide

challenges. That is, environmental impacts in terms of the

continual use of the planet’s natural resources, addressing

social needs and lifestyle changes in the developed world. Within

Fig. 1.2.1, the M&S Corporate Model outlines what they need as a

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business, in terms of resources as people, services and products

across their ‘Plan A’ ethos – the four ‘I’s (Inspiration, In-

touch, Integrity and Innovation).

The four I’s within Plan A (Fig. 1.2.1) reach across the spectrum

of business needs, in terms of how they conduct business, the

products and services within their portfolio, through to their

global end users, customers or stakeholders. These relate to

‘Value Outputs’ as key drivers, which will help create

‘financial, social and environmental value for society’. This is

the ’Triple Bottom Line’ principle introduced by Elkington

(1999), when reviewing sustainable development in any business

model or core strategies (Hope & Moehler, 2014).

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Fig. 1.2.1: Marks & Spencer’s (2014) Business Model [Online]

Available at: www.corporate.marksandspencer.com (Accessed

22 Oct. 2014).

M&SPortfolio

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This can be considered as ‘work in progress’, in terms of

environmental value or reduced impacts, in the use of the

planet’s natural resources from a review in 2014. A continual or

dynamic assessment of their sustainable drivers in PPPM has

advanced from their earlier plan to measure current and future

performance, against a common ‘environmental’ goal (Hope and

Moehler, 2014). These are determined at governance level, with

increased or longer-term goals than perhaps originally envisaged

(Muller, 2009).

“New and potentially increased risks were reviewed as

part of the development of Plan A 2020 in 2013/14,

prompting increased activity on youth employment, supply

chain management, transparency, operational efficiency

and the development of new business models.”

Anon, (2014). [online] Accessed 05 Nov. 2014

Since the launch of 'Plan A', their carbon footprint has been

reduced as the business has grown Marks and Spencer Corporate, Plan A

(2014). This relates to the theory of 'Roosevelt's Smart Growth'

as suggested by Balestrero, ex -CEO of PMI (2010), a smaller

footprint per person leads to success. If business can view the

planet's natural resources as assets, this would in turn see an

increase in value for current and future generations. This

connects to the definition of Sustainable Development from WCED,

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“Development that meets the needs of the present without

compromising the ability of future generations to meet their own

needs” (WCED, 1987).

The driver for M&S is to excite their customers, to maintain up

to date knowledge of sustainability, to ensure they are doing

things correctly and ethically and to improve or be innovative

along their journey (Hope and Moehler, 2014). Their new goal to

2020 and beyond, are to find new ways of doing business that are

not detrimental to the plant and become ‘carbon positive’ and

fair (WCED, 1987).

M&S are using innovation as a driver to make change, which

answers the latter part of the question within this document.

With regards to PPPM, the company appears to be addressing a

number of individual projects within the portfolio, to achieve

their eventual goal. However, frameworks in the past have been

criticised for not addressing all elements of ‘financial, social

and environmental’ outputs (Hope & Moehler, 2014).

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2.0 Interconnections and Communication

Without interconnections with society and other organisations

outside of the corporation, they have identified this cannot be

achieved alone. In essence, they have identified that engagement

with their stakeholders is an important part of the process to

succeed with a sustainable model (Ebbesen & Hope, 2013; Winch,

Morris & Pinto, 2007).

“We know we can’t deliver Plan A 2020 alone. That’s why

we’re stepping up our efforts to ‘lead with others’ by

participating in broader coalitions to deliver sector

wide change.”

Marc Bolland, Chief Executive Officer M&S (Plan A Report

2014), p.1

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“...part of our journey is all about engagement. The

shift to new sustainable business models will only be

completed with the strong support and participation of

our customers, employees and business partners.”

Mike Barry, Director of Plan A, M&S (Plan A Report 2014),

p.2

Walmart only connect with suppliers who believe and follow the

same ethos as themselves regarding impacts on the environment

(Balestrero, 2010). However, a report by the Institute for Local

Self-Reliance (ILSR) appear to contradict that from Walmart’s

2005 key driver above, the “company’s carbon pollution is up 14%”

and that their PR campaign is misleading with regards to

sustainability (Mitchell, 2013). However, Walmart may still be

considering themselves green, but this could be green by

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Fig. 2.1.1: Maltman & Shirley, (2011) Types of Sustainable

Projects.

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‘general’ (Maltman & Shirley, 2011) from the ILSR’s point of

view.

The report also maintains that “Walmart is a major contributor to

the campaigns of lawmakers who are blocking action to address the

climate crisis”. The principles of Sustainable PPPM is not that

of Walmart, who operate a ‘non-sustainable’ model, which

includes, long distance haulage of materials, both on land and

overseas, whilst their products endure a short cycle (Mitchel,

2013). The lifecycle of a product or service should be included

within every phase from planning to completion and at

decommissioning stage in terms of energy used (Hope, 2013; Hope &

Moehler, 2014).

“…..we are focused with Plan A 2020 on engaging with

millions of customers, nearly 86,000 employees and 1,000s

of other businesses by making Plan A the way we do

business through inspiration, being in touch, integrity

and innovation as we build towards our long term goal of

being a truly sustainable retailer.”

Our Plan A Journey – Marks and Spencer Group plc. (Plan A

Report 2014), p.4

Within the McKinsey Survey, they identified three key

characteristics that differ. With regards to effectiveness, these

being, mission and values preceded by external communications.

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The least connected area of concern is within supply chain

management and budgeting (Bonini & Gorner, 2011).

‘Being In Touch’ is one of the key drivers within Plan A and

encompasses all three characteristics. Communication needs to be

effective, to ensure success is achieved and links with the 80-

20, rule or Juran’s ‘Pareto Principle’ of control versus

communication (Sanders, 1992; Koch, 2011).

“20% of your time should be employed doing transactional

based activities needed to control the project and 80% of

your time is best spent on transformational type

activities associated with leadership and delivery of the

project - COMMUNICATION being considered the most

important”

(Successful-project-management.com, 2014) Accessed online

22 Oct 2014

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3.0 Innovation & Change

3.1 Innovation

The National Ignition Facility (NIF) flipped the traditional 80-

20 concept above on its head by technological innovation. Time is

not wasted in managing the 'system', but having the freedom to

spend more time on innovation or R&D (Frazier, 2014).

Sustainability has remained with Chief Executives as one of their

most important features of their three key drivers, included

within the organisations business practices. Formal projects or

programmes have been initiated to address issues with

‘Sustainability Leaders’ as of last year and they “managed

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sustainability very or extremely effectively” (Bonini S & Gorner

S, 2011).

“Companies should integrate environmental, social, and governance

issues into their business model and act on them”, (Bonini S and

Gorner S, 2011). These values were disconnected in the past from

the ‘core strategy’ of the business. Governance of the “green”

credentials are handled in a ‘fire-fighting’ or reactive

maintenance sense to comply with regulations and to ‘look good’

instead of being of added value to the company in addressing

sustainable impacts and avenues to save the company money.

(Bonini & Gorner, 2011).

36% of CEO’s expressed that their organisations had a ‘strategic

approach’ for sustainability ‘with a defined set of initiatives’.

Organisations need to take a long-term view of sustainability in

a strategic context, whilst incorporating this within the key

drivers to gain return on “capital, growth, and risk management”

(Bonini S & Gorner S,

2011), (Fig.

3.1.1).

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3.2 Philosophy on Change

During the nineties, Total Quality Management (TQM), was a key

driver and business perhaps perceived this new concept, as

another costly system being added to the business, rather

than cost saving (Juran, 1995). This appears to parallel the

current drive within sustainability at the forefront within

businesses objectives (Bonini & Gorner, 2011). However both are

connected in terms of achievements being viewed as ‘long-term’

strategies (Muller, 2009). TQM is a system that is central to

quality, this being based on the full inclusion of all personnel

involved in the business and aimed at “long-term success” (ISO

8402:1994, now ISO 9000). The people or stakeholders included

within the process should be its members (shareholders),

customers and society as a whole (Muller, 2009).

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growth, and risk management [Online] Available at:

www.mckinsey.com (Accessed 18 Oct. 2014).

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Juran (1995) declared “the main reason for an organisation

seeking quality certification is maintenance or market

expansion”. Within a sustainability context, this can relate

project management to innovation and continual review or

revolutionise concepts (Maylor, 2010). Maintenance is

contemplated as ‘remaining the same’ or ‘status quo’, whereas to

change is to be inventive and consequently review alternative

approaches in achieving key goals for the environment, social and

ethical issues (Juran, 1995).

‘Innovative’ managers or Project Managers (PM’s) continually

develop and will be proactive with change. The act of monitoring

refers to the follow-up process or reporting and circulation

(APM, 2012). Change of the ‘status quo’ appears to frighten to

those who are used to the same routines (Schneier et al, 1994).

Within Table 3.2.1, differences are evident between a General

Managers day-to-day tasks with a PM, who will facilitate and

manage a number of portfolios and will encompass ever-changing

‘routines’ within their role (Maylor, 2010).

Table 3.2.1 – Project versus General Management (Maylor, 2010)

General Management Portfolio/Project Management

Responsible for managing

status quo

Authority defined by

management structure

Responsible for overseeing

change

Lines of authority not clear

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Consistent set of tasks

Responsibility limited to

their own function

Works in ‘permanent’

organisational structures

Tasks described as

‘maintenance’

Main task is optimisation

Success determined by

achievement of interim

targets

Limited set of variables

Ever-changing set of tasks

Responsibility for cross-

functional activities

Operates within the

structures which exist for

the ‘life’ of the project(s)

Predominantly concerned with

innovation

Main task is the resolution

of conflict

Success determined by

achievement of stated end-

goals

Contains intrinsic

uncertainties

Similarities can be made between the roles of PM against what is

required to progress new sustainable drivers forward in terms of

being innovative and continual change (Maylor, 2010).

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Fig. 3.2.1: Schneier et al (1994). Four types of plateaued performers

(p.250)

Majority of individuals do not enjoy change or innovation,

depending on culture, beliefs and their own morals. This is

termed as a 'Resistance to Change' from the intended change

combined with the social consequence of that change (Juran &

Gryna, 1995). Within Fig 3.2.1, there are four different groups

of people. Individuals, who are categorised as ‘pleasantly

plateaued’, will feel comfortable in their organisation and that

there is no need to change or move elsewhere. Whilst conflict

will be minimal, the danger is “if an organisation has too many

of these, innovation will suffer” (Schneier et al, 1994). This

could be detrimental if too many CEO’s were of this nature,

therefore innovation would suffer as change would not be their

‘stimulant’.

The model in Fig. 3.2.2 is a network that highlights a structured

approach in connection with innovative management within the

portfolio process. This allows new ideas and R&D to be conducted

without interference within the business’s day to day processes

to ensure that operations are not compromised (Koch, 2011).

According to the McKinney Survey, only 31% organisations commit

to address new sustainable ideas, processes or products within

R&D (Bonini S & Gorner S, 2011).

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Where resistance to change or organisation key drivers are not

clarified, the PM can make change in PPPM with regards to

sustainability applications. However strategically these ideals

would best fit or begin at corporate level (Hope & Moehler, 2014;

Maltzman & Shirley, 2011; Winch, Morris & Pinto, 2007).

“Placing responsibility and accountability for

sustainability with the project manager also enables the

integration of sustainability within a project even if

there is an absence of vision or strategy from the

project sponsor”

(Hope & Moehler, 2014).

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Fig. 3.2.2: The Innovation Portfolio Management Process

[Online] Available at: www.innovationmanagement.se

(Accessed 18 Oct. 2014).

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4.0 Governance in Portfolio Management

Within the nineties, standards including, Environmental

Management Systems 14001, Quality Management Systems 9000, and

Occupational Health and Safety (OHSAS) 18001 were key drivers set

by corporations within the UK. However, the only way to succeed

would require a powerful strategy set at the higher chain of the

organisation hierarchy, whilst management culture at COE level

would be instilled herein (Muller, 2009, p.87).

Culture, support and decision making for good governance needs to

be initiated and installed at the required level of project

portfolios (Hope & Moehler, 2014). Once the companies values have

been set, appropriate steering groups could be formed. For

example, within manufacturing, they could be PM’s within Quality,

Product Development, Finance, Project Engineering and so forth.

All teams would work to achieve the same initiative or set of

strategic objectives made at those who control governance

(Muller, 2009). Another key component in setting common

objectives and goals is that members at to be committed –

definition of team according to the APM (2012).

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M&S have set their governance within their four I’s concept and

to ensure that their reputation will rely on the quality of

relationships. Risk Profiles are conducted every six months at

the correct governance level and they deemed it relevant herein

to develop their original 2012 ‘Plan A’ document which was not

meeting their social and environmental objectives (Anon, 2014).

“Our reputation rests on the quality of our relationships

with customers, employees, partners, suppliers and local

communities.”

Anon, (2014). [online] Accessed 05 Nov. 2014

5.0 Summary

Therefore this poses a question ethically and morally in how

should companies be independently measured. Upon analysing

Walmart, this perhaps poses a question, what are their true

stimulants for change? Do they genuinely believe that they need

to change and is their key driver only money orientated, at the

expense of the planet? Within the organisations “Live Better”

campaign, they believe that there is a corporate responsibility

to make a difference and issues, including the preservation of

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the environment as well as fighting poverty and providing access

to affordable goods for society (Anon, 2014).

Governance plays a key role in setting drivers and initiatives at

the highest level in connection with sustainability as is being

conducted in M&S’s ‘Plan A’ (Anon, 2014). There appears to be a

contradiction in Walmart’s values, as they appear to be involved

in both sides of the argument for and against sustainability

(Mitchel, 2013).

“Companies can choose to see this agenda as a necessary

evil – a matter of compliance or a risk to be managed,

while they get on with the business of business – or

they can think of it as a novel way to open up new

business opportunities while creating value for society”

(Bonini & Gorner, 2011)

On the flip side, the Marks and Spencer's model looks to be

extremely focussed and driven, where core values and innovative

ideas are at the frontier of their business (Anon, 2014).

Culture, therefore, has to affect what set of objectives the

boardroom set, as well as their relationships in terms of context

with suppliers and clients (Muller, 2009, p.87).

The creation of sustainability within strategic sense is ultimate

to meeting targets over a long term. For example GE and their

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'Ecomagination' division have grown at a rapid rate (Bonini &

Gorner, 2011). The continued creation of environmental values is

to improve operational costs has succeeded with improved

technological advances at NIF where 20% of their time is to

manage day to day processes, whilst innovation is 80% of their

time (Bonini & Gorner, 2011).

Growth is dependent on continual risk management and review of

the business portfolios (Bonini & Gorner, 2011) and be aware of

any changes that may affect the organisations strategies (APM,

2012).

Innovative models can only be reflected positively, but only on a

long-term view. The Clean Ignition Facility in the US won PMI

project of the year award in 2010. Their 'Ignition' concept was

based on a ten year sustainable project management programme to

potentially create 'unlimited energy' (Balestrero, 2010).

This could be viewed as a positive stimulant for change, which

would affect stakeholders globally, if successful in terms of

financial gain and public perception, from positive media spin.

The portfolio had no completion date but this could be a win for

all stakeholders, in every sense of the term, if not solely

financially driven which has been viewed as a major concern for

the capacity of natural systems in the past 150 years. (Bonini &

Gorner, 2011; Dyllick & Hockerts, 2002).

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Hope & Moehler (2014) reiterates that once sustainability is

enhanced within, issues can be tackled at various levels and that

PPPM can operate visions, innovations and opportunities in terms

of sustainability. PM's can operate as a ‘hub for governance’,

only if there is structure for corporate and social

responsibilities (CSR), which appear to be opposite between

Walmart and M&S’s ‘Plan A’ (Anon, 2014; Dyllick & Hoberts, 2002;

Mitchel, 2013).

6.0 References

Association for Project Management. (2012). APM body of knowledge.

6th edn. Buckinghamshire: APM Publishing.

Anon, (2014). [online] Marks and Spencer's Plan A. Available at:

http://www.planareport.marksandspencer.com/downloads/M&S-PlanA-

2014.pdf (Accessed 22 Oct. 2014).

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Anon, (2014). [online]. Walmarts' Global Responsibility - “Live

Better” initiatives are making a difference. Available at:

http://corporate.walmart.com/global-responsibility/ (Accessed 26

Oct. 2014).

Balestrero, G (2010). Project Management Institute. What Does

Hope Look Like – Project Management and a Sustainable Future.

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2014).

Bonini, S & Gorner, S. (2011). The business of sustainability: McKinsey

Global Survey results. [online] Available at: http://www.mckinsey.com/insights/energy_resources_materials/the_b

usiness_of_sustainability_mckinsey_global_survey_results

(Accessed 22 Oct. 2014).

Corporate.marksandspencer.com, (2014). Carbon Neutral. [online]

Available at: http://corporate.marksandspencer.com/plan-a/about-

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Dyllick & Hockerts (2002). Business Strategy and the Environment:

Beyond the Business Case for Corporate Sustainability. Vol 11, pp.130-141.

[Online] Available at: www.interscience.wiley.com (Accessed 18

Oct. 2014)

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Ebbesen, J.B & Hope A.J (2013). Re-imagining the Iron Triangle:

Embedding Sustainability into Project Constraints. PM World

Journal, Vol.2, Issue 3 – March 2013. [online] Available at:

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Frazier, T (2014). Fusion Will Be a Huge Clean-Energy

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energy-nif-cio/ (Accessed 26 Oct. 2014).

Hope, A (2013). Lecture 5 – Sustainable Project Management

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Hope, A.J & Moehler, R (2014). Balancing projects with society

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York: McGraw-Hill.

Koch, R. (2011). The 80/20 principle: the secret to achieving more with less.

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http://philosophersnotes-samples.s3.amazonaws.com/pdf/the-80-20-

principle.pdf (Accessed 31 Oct. 2014).

Maltzman, R. & Shirley, D. (2011). Green Project Management. 1stedn.

Boca Raton: CRC Press.

Mitchel, S (2013). ILSR (Institute for the Local Self-Reliance).

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Muller, R. (2009). Project Governance. 1st edn. Gower Publishing

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Schneier et al (1994). The training and development sourcebook. 2nd edn.

Massachusetts: HRD Press.

WCED (1987). Our Common Future. World Commission on Environment

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Winch, G. M., Morris, P., & Pinto, J. (2007). Managing Project

Stakeholders. In P. Morris & J. Pinto (Eds.), The Wiley guide to

project, program, and portfolio management (pp. 271-289).

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Williams, P. (2014). Is Stage Gate the Right Tool for the Job: A Fresh Look at

Innovation Portfolio Management | Innovation Management. [online]

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7.0 Bibliography

Allwood, J. (2014). Should we design for deconstruction?

Construction Professional, pp.30-31.

BBC news article. File on Four, aired 24 February 2013. Britain’s

Plutonium Mountain. [Online] Available at:

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BBC news article. Inside Out, aired 29 September 2014. How should

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Grafsgaard, B. (2014). Sustainable Innovation through Portfolio,

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