Greg Verhoef In the early nineties the Latham report espoused collaborative working and partnering; but has the economic downturn brought back combative behaviour?
You’ll probably remember the damning conclusion to Sir Michael Latham’s 1994 report, Constructing the Team. The industry, it lamented, “ineffective, fragmented and incapable of delivering for its customers.” This was mainly the result of adversarial relationships that led to low profit margins. The report’s recommendations focused on reforming relationships between clients and contractors, and stated that building contracts should be based on principles of fairness and team work.
Suddenly the construction process at all levels saw the benefits of collaboration and slowly, but decisively, the way work was delivered changed. Well, once again I believe we are in danger of moving back to a combative culture.
Ours is a smallish specialist contractor. The success of our relationship with a client largely depends on us working closely with the project team and factoring in our services and delivery of materials. But increasingly the project team that should be working with us is making it difficult to deliver our specialist skills and materials on time and on budget.
To illustrate this point, let’s take a project we are working on now. The designers are prolonging the process as much as possible. They constantly change their minds at the last minute with total disregard for the input and delivery of services and materials from other members of the project team.
Admittedly part of this is due to fear. Nobody knows for sure where their next job will come from and when, so it makes more sense to them to prolong, rather than get on with, the job in hand. But it makes delivering a fixed-price contract impossible.
Prolonging decision-making and changing the work schedule has a severe impact on our production line and delivery process. Changing the goal posts once the process starts quickly erodes any leeway on deadlines, which puts huge pressure on everyone. It jeopardises our relationship with suppliers and the client while depriving us of any discounts we may be able to achieve in delivering a fixed-price contract, because we miss our slots. And the project in question will be delivered later than planned much to the client’s dismay.
Changing the goal posts once the process starts erodes any leeway there might be on deadlines. It deprives us of any discounts for delivering a fixed-price contract
In these situations subcontractors are left stuck in the middle – we can’t complain to the client as this might upset the contractor and we can’t complain to the contractor as it is often our client too. But we shouldn’t need to complain; a well-structured team that includes all of us – the client, consultants, construction managers, specialists and suppliers – should be acting with care and consideration for each other and for the successful delivery of the project.
A return to a combative work ethic as a knee-jerk reaction to the latest economic crisis impacts on everyone in the supply chain, kickstarting a price war and a blame culture, which is exactly what Latham concluded was bad for clients – everyone focusing on themselves rather than on client needs and working with each other – which of course ends up costing clients more.
I often find myself in meetings about meetings. It seems to take an age for decisions to be made and I suspect many are simply trying to prolong the process. Good managers will ensure that this doesn’t happen and that design and procurement are done early, at the drawing board and not in the meeting room.
We need strong project managers on site, with strong leadership skills; people who have the ability to ensure there is a high level of collaboration between all participants in the supply chain with work being delivered as efficiently as possible.
We all need to pause and remember why the Latham report is so important. If we don’t, the whole industry will end up alienating clients and going back to the unacceptable fragmented actions of individual companies that nearly did for the construction sector.
Greg Verhoef is director of Szerelmey