The Garrison Report #2004-3

The Construction Industry From the Psychologist’s Couch, Part 2

Last month’s issue of The Garrison Report introduced the idea that the construction industry is in desperate need of a turnaround. It focused on the feeling of helplessness that too many people in the industry experience. However, the real obstacles to turning around the construction industry are its secrecy and tendency to blame others for the problems.

Secrecy

The problem of secrecy really stems from a deeper problem—a lack of trust. I laugh at buyers of construction services who argue they have to bid work because they can’t trust the contractor to give them the right price. My response to them is, “How can you trust the low bidder to deliver what you thought you were buying?” That generates some strange expressions.

However, owners of construction companies aren’t much better. I like to tease them by asking them if they show their employees their company financial statements. Most respond, “It’s none of their business.” I teasingly tell them they are fools because most of their employees think the companies are making five times as much as they are, so it would probably be better to show them how little they are really making. It might keep some of them from running off and starting a competing company.

I understand how people taking information and using it against us have burned us all. The result has been a tendency to keep the information close to the chest. However, partners can’t do that. Besides, if we can’t trust the people we are working with, why are we working with them? I wrote a magazine article entitled “Throw Away Your Existing Contracts.” I expressed that it’s not that we don’t need contracts but that we use contracts for the wrong purpose. The purpose of a contract is to describe what each party in the agreement is obligated to do. However, too many people attempt to use it as an enforcement method. In other words, they are attempting to write language to make the other party perform. That doesn’t work. The large number of litigation cases demonstrates this. The end result is unhappy stakeholders. My recommendation: Instead of onerous contracts, start working with stakeholders you can trust!

Likewise, buyers are often reluctant to reveal their true budget because they are afraid the contractor will raise his bid to the budget figure. Well, aren’t we supposed to use the budget? Oh, I know what they are thinking: “Regardless of the cost, the contractor will tell me it’s in my budget.” That’s lack of trust, pure and simple. Without understanding the client’s budget, it is impossible for any designer or contractor to offer suggestions on the best approach. The budget dictates whether the client receives a Chevy or a Cadillac! Of course, the buyer might want to keep a small contingency, which I would recommend, but the contractor and design team need a legitimate budget to work with.

Just as important, the more the contractor and/or design team knows about the owner’s business, the greater the value they can deliver. This is no different than when you go to the doctor; the more information you provide about your symptoms, the better the doctor can diagnosis your illness. The contractors and designers are experts on design and construction, but to provide the best solution, they must totally understand the client’s true needs. The number one reason projects fail is the lack of a clear definition. If the designer and contractor do not understand the client’s true objective, the client’s expectations will not be met.

Instead of secrecy, the construction industry stakeholders need to work together for the mutual benefit of all stakeholders, including the buyers of construction services, contractors, designers and workers.

 

Blame

If possible, the constant effort to blame someone else for everything that goes wrong is even more destructive. Instead of working to solve the challenges facing every project, which are inherent in developing prototypes, this approach drives a wedge between the stakeholders that lowers quality and increases costs. I haven’t even mentioned the wasted effort contractors and designers spend building walls around their organizations. Complex systems, such as the construction process, require cooperation and communication, not confrontation.

And the legal profession does not help the situation. Too many attorneys and claims consultants advise contractors and designers to run their projects in preparation for claims. I strongly disagree with this approach! My reason is simple: the contractor’s and designer’s jobs are to protect the client from claims, not generate them.

Besides, from a selfish point of view, how many repeat clients do you keep after you sue them? I’m not naive; I know in some cases we must protect our interests. However, if you feel you must prepare for a lawsuit with a client when you are starting a project, ask yourself if you should really be working for that client. It’s important to keep in mind that if you have a claim mentality, you will probably end up with a claim. So why focus on claim preparation? In the rare case where there is a significant problem, there is sufficient time to document the critical facts. The good news is there are many contractors who have never filed a lawsuit in their company’s history. Keep in mind no one wins in most lawsuits.

Instead of dedicating resources to the preparation of claims or deflecting others’ claims, why not spend the resources on solving the project’s problems? In most cases, if the problem is attacked quickly and diligently, the costs can be minimized or eliminated. However, when war breaks out, the costs only increase and create additional problems. I have been brought into situations where the stakeholders were at each other’s throats. When the various stakeholders were made to step back and gain a more complete perspective of the problem, they were able to start addressing the issues in a constructive manner. Project morale increased and project results improved.

In essence, when the project’s focus was shifted to success, or what I have often called the Strategic Goal© (a project outcome that is mutually agreed upon and creates a win-win situation for all stakeholders), all the stakeholders benefited. It’s time we each begin to reach out in an attempt to make a difference instead of hiding behind the barrier that “it’s someone else’s fault.” We all share the responsibility for the condition of the construction industry, and it’s time for us to become accountable for the success of our industry, not to mention our companies and our own careers.

 

* * * * * THE END * * * * *

Previous: The Garrison Report #2004-2
Next: The Garrison Report #2004-4

original site by jack out of the box designs inc. | © Copyright 2010 Ted Garrison | Site Map