Of Conflict and Communication—the Risks and Rewards of Collaboration in Construction
May 2, 2017 | Julian Anderson
According to the Oxford English Dictionary, collaboration is “the action of working with someone to produce or create something.”
To many in the construction industry, it is the equivalent of the holy grail—an elusive ideal of performance. In theory, in a truly collaborative venture, all parties focus on and contribute to a project’s goals, thus ensuring success for the project and themselves. Experience, however, suggests a different reality. While construction requires many players to act together (collaborate) for a project to be successful, each person typically has somewhat different goals from the others. While some of those goals will not be in alignment, they might even be competing or conflicting. For example, an interior designer may have a vision for a desired quality of furnishings and finishes, but if that vision is too grand for the project’s budget, it may negatively impact the landscape architect’s vision when the quality of the landscaping design is compromised to fund the opulent interiors. Success for one party leads to the relative failure of another.
To add to the complexity, the successful achievement of one player’s goals may not be dependent on the successful achievement of another player’s goals. Consider that a project’s mechanical system might be a dismal failure, while its structural design is award-winning; the mechanical designer failed to meet their goal of designing an appropriate system, yet this had no effect on the structural engineer achieving their goals. However, in this example, the project may be considered a complete failure by its owner because of the poor mechanical system—regardless of the fact that it was recognized for outstanding structural design.
Finally, the transmission of information between designers, between designers and contractors, and between contractors and sub-contractors/suppliers provides numerous opportunities for gaps in understanding that lead to disrupted expectations and ultimately claims and/or financial losses.
In short, while some degree of collaboration is necessary for any project to achieve completion, the construction process is more often an antagonized struggle involving competing, disconnected goals; broken trust; and imperfect communications—often resulting in litigation.
The Norton Rose Fulbright 9th Annual (2013) Litigation Trends Survey, in which Fulbright surveys companies in the United States and the United Kingdom on litigation issues and trends, stated:
“Engineering and construction companies led in litigation, with 80% of them filing at least one suit last year. The engineering sector faced suits at an even greater rate than it initiated them and almost half of all Fulbright’s engineering respondents faced at least one high-dollar suit during the last year. Not surpri- singly, 57 percent of engineering respondents reported an annual litigation spend of $5 million or more—the highest for all respondents to Fulbright’s survey.”1
At the core of this scenario are misaligned goals. As Dr. Dean Kashiwagi P.E. and his team at the Performance Based Studies Research Group (PBSRG) at Arizona State University described this classic standoff: “The client wants low price and high value, and the vendor (contractor) wants minimum performing systems.”2
Add to the mix humans with their different goals, different ways of working, and common reaction to conflict. As John Jozwick, General Counsel for Rider Levett Bucknall, Ltd. writes:
“When we human beings experience conflict, we naturally perceive feelings of threat, fear, and mistrust. In fact, research has found that humans, when faced with conflict, are actually ‘hard wired’ to experience an emotional fight-or-flight reaction before we are able to respond rationally. From the moment we encounter information that might pose a conflict or threat, we fear first and think second.”3
Common Characteristics in Successful Projects
In my experience, successful projects have three common characteristics:
- The right team. One that is well experienced in the project type, used to working together, and that has delivered successful projects in the past can be trusted to go the distance to completion with a collaborative attitude.
- Fiscal clarity. It’s critical to confirm at the outset of a project that its scope, quality, and schedule can realistically be achieved within an established budget. What I call “Anderson’s Maxim”—“Most projects with poorly conceived budgets never fully recover”—is a guiding principle in construction.
- A shared vision. All the participants in the project must precisely understand their scope and what is specifically required of them.
Can the form of contract enhance (or enforce) collaboration in construction? An effective but ultimately limited tool, the contract is relevant to the extent that it is suitable for the type of project being procured, ensures the project team is familiar with the specific project type, and accurately allocates the risk factors appropriate for the project type. But in and of itself, a contract can neither inspire nor compel genuine collaboration. Does Integrated Project Delivery (IPD) solve the problems of construction? While it has merits, it, too, is not the be-all-end-all any more than CM-at-risk, design/build, or other forms of contract. Can engaging project neutrals and using partnering help? Yes, but only to a point—again, authentic collaboration defies formal negotiation.
Still, no project can reach completion without some collaboration. Aspiring to the highest level of collaboration is good, but better still to have an appropriate budget, an alignment of the parties’ understanding of project scope and quality, and a clear-eyed vision of their respective roles. Failure to achieve this will result in an unsuccessful, litigious project where no parties will fulfill their goals. Collaboration in construction carries both risk and reward: The biggest risk is failure, either individual or collective. The greatest reward is success.
Julian Anderson is a member of Rider Levett Bucknall’s Global Board and Chairman of the Gulf States, North America, Oceania and Southeast Asia Region. He is President and a founding shareholder of the company’s North American practice where he is responsible for overall management of the practice. www.rlb.com
1 “Litigation Bounces Back: Regulation Hits High – U.S. Release.” Fulbright’s 9th Annual Litigation Trends Survey: Litigation Bounces Back; Regulation Hits High. February 26, 2013. Accessed November 9, 2015.
2 Case Study: Best Value Procurement/Performance Information Procurement System Development, Dean Kashiwagi, PhD, Fulbright Scholar, P.E. Accessed October 1, 2016.
3 “Building Trust: How Project Neutrals Manage Conflict and Foster Successful Projects,” John Jozwick, Esq. Accessed September 29, 2016.