Construction firm owners must drive collaboration
Tuesday, September 19, 2017
Inhale deeply and hold it. Keep holding. Your lungs begin to hurt, carbon dioxide is building up.
Now, exhale and hold it. Keep holding. You begin to crave oxygen and begin to feel dizzy.
OK, just breathe.
Inhaling and exhaling is a great example of "interdependence." Neither inhaling nor exhaling is right or wrong. We cannot protect the interests of one over the other. We need them both to succeed.
The various parties on a construction project exhibit the same interdependence. Yet today, much of construction continues to operate under a "war" model. This adversarial model produces the opposite of what we need. When we see each other as adversaries, we are working against ourselves (as in the inhaling/exhaling example).
We need a new model, a "partnership" model.
Collaborate or bust
There is no doubt that the construction industry needs to become more collaborative. We lose billions of dollars each year due to loss of productivity, miscommunication, excess administration and claims. These dollars could be used to build things.
Worse yet is that the nature of construction is highly interdependent. Because of our interdependence, no one working on a construction project can just walk away from issues and succeed. We must have the cooperation of the other stakeholders who hold our success in their hands as much as we hold it in our own.
It is logical for a new wave of technologies and techniques to emerge offering "the answer." These include building information modeling (BIM), integrated project delivery (PD) and lean construction. These technologies and techniques require high-trust, high-functioning teams.
But how do we consistently build high-trust, high-functioning teams?
Partnering is the foundation
For more than 30 years, partnering has proven to be an effective process for developing collaborative relationships. It only failed when we stopped short of integrating partnering concepts into all aspects of our construction programs. We did not drive partnering throughout each organization's culture to really make it the way that we work together.
Partnering is the underpinning for making BIM, IPD and lean construction work. This is also true for design/build, CM at risk, design-bid-build and P3's. Project and program success lies in knowing how to create, grow and maintain a strong partnership among an array of stakeholders.
This does not happen by "chance" or because the "stars are aligned" for the project team. It happens because the owner integrated partnering into the entire construction program, and a partnering culture emerged. The partnering culture naturally supports the collaboration that operates in a high-trust environment.
In the face of adversity, we have seen example after example in which the circumstances that the project teams faced were not optimal. Team after team worked together, developing high-trust relationships, staying together, despite the constraints. We have come to believe that it is not the issues that determine if a project will succeed or fail, but rather how well the team comes together to resolve those issues.
This is what we need to focus on: How do we ensure that our teams are committed to working together, despite what might happen, whether using a new approach or an old one?
Owners must drive a partnering culture
If I asked 100 people to meet me in New York city at noon, with no further direction, the vast majority would meet me on the top of the Empire State Building. If I said Paris, they would be at the Eiffel Tower. This concept is known as prominent outcome.
The prominent outcome identifies what is most likely to occur. So, as BIM, IPD and lean construction are implemented, what is the prominent outcome?
Yes, you are right. Unless we really make partnering the way we work together, we cannot achieve the level of collaboration needed to fully utilize these new processes. Technology is not going to change the way we work together. We must change our culture and this effort must be owner driven.
The long-term effect
In creating an integrated, structured, comprehensive partnering program that changes the behavioral norms for working together, one that holds people accountable for those changes, owners will ultimately reap all of the benefits.
It starts with both the contractor and owner sharing a reduction in total installed costs (2-3 percent). The contractor's profit is now 5 percent, and we can assume the owner saved 5 percent (from budgeted cost).
This increased profit will attract new entrants into the market. Contractors will bid based on the lower cost to remain competitive while making the usual profit. This results in lower prices for the owner. Contractors who are unwilling or unable to work in a partnership manner will not be competitive.
Eventually the contractor's profit will return to equilibrium (typically around 3 percent), and all the savings remains with the owner. The contractor gets more predictable, fair results. Some owners have already taken action to change their culture.
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