Global Construction Success

Charles O'Neil

• Publisher: Wiley-Blackwell
• Year: 2018
• ISBN:
  9781119440338
• Edition: 1
• Topic: Technology & Engineering
• Subtopic: Construction & Architectural Engineering
• Index: Technology & Engineering

A guide to effective corporate and project management in the construction industry with a focus on the role that people play in the process

Global Construction Success explores the importance that human dynamics play in risk management of construction projects. Every time a project is structured, designed and built, personal behaviours and inputs can either lead to success or be the cause of failure. With contributions from noted experts on the topic, the book offers insight into stakeholders' reactions in a variety of situations, provides expert analyses of risk management and proposes potential solutions and recommendations in order to ensure effective construction management.

The book explores common causes of project failure, outlines the key factors of successful projects, shows how to implement Public Private Partnerships, explores the different stages of structuring projects and reveals what it takes to manage difficult client/contractor relationships. International case studies of major projects clearly illustrate how communications and relationships can lead to helpful solutions to commonly encountered challenges to achieve positive results.

• Offers a comprehensive review of the impact human dynamics play in the success or failure of construction projects
• Stresses the importance of the leadership of senior management
• Offers a chapter on managing and resolving conflicts
• Shows why the industry needs better risk management
• Includes new information for managing communications and relationships
• Explores new areas of technology that are being embraced by the construction industry

Written for construction industry senior management in both the corporate and government sectors, project management professionals, consultants and supply chain participants, Global Construction Success includes material for minimizing risk and improving management quality and profitability when working with international construction projects.

1
Introduction

Ian Williams MSc, CEng, FICE, FCIArb

Former Head of Projects for the Government Olympic Executive, London 2012

1.1 Opening Remarks

Things do go wrong on construction projects – surprisingly often and for a range of remarkably similar reasons! These failures are not confined to one country or region or culture. They happen across all continents, and have done so for many years.

So what are these failings? Could they be related to construction being an industry that has always been notorious for operating on a high risk/low margin model? Might a relevant factor be the onerous payment and contractual terms that are often imposed on head contractors and on consultants by clients, or by head contractors on their subcontractors and suppliers? Are companies bidding too aggressively and too often for work on the basis that this project is a ‘must win’ – either for the (short‐term) prestige of tender success, or the necessity to win new work just to cover failings elsewhere in their business? Are individuals over‐optimistic regarding outcomes and not evaluating the risks associated with time and cost in a robust, realistic, and pragmatic way?

Each new generation inevitably finds itself repeating the same old questions of ‘why’ the industry continues to be like this, and then ‘how’ and ‘what’ can we do to improve it for the future.

This book seeks to identify and understand the key structural ‘why’ questions related to the construction industry at this time, and then to make constructive arguments as to ‘how’ we can improve in the future, with emphasis on ‘what’ specific actions and focus could produce a long‐term improvement in the industry's general health.

From the experience of the authors and their analyses of failures, four overarching themes emerge on a consistent basis:

1. People and teamwork. We all know that building a house or a wall needs to be done on sound foundations. The critical foundation theme is people and getting the team and its organisation right. This starts with commitment from people with the right behaviours and values working in committed, focused teams.
2. The right framework (business models and form and terms of contracts). Getting the right contractual environment is essential to allow competent people and teams to deliver successful project outcomes.
3. Management of risk. Managing risk is not only the responsibility of risk managers; it is everyone's job. Managing risk must be at the centre of each project and the process of identifying, eliminating, and managing it must be a core management tool and value, not a bolt‐on. Client and project sponsors need to consider the concept of who owns the risk and who is best placed to eliminate it and if that's not possible, how should it be managed to reduce its probability of occurring and its severity. Why is risk management no higher up the ‘framework’? The simple answer to that is that it is equal, but without having the right people and contract arrangements in place the successful management of risk will not happen despite having the best risk management system in the world in place.
4. Robust processes (corporate and project management) . Flowing from the contract and how it is set up are the robust processes that are essential to enable the project to be executed successfully. History shows that many projects fail at this hurdle.

The book is split into six sections. Section A sets the scene with an overview of the state of the industry. Sections B, C, D, and E cover the solutions we put forward. Finally, Section F summarises emerging conclusions. Each section is described in detail below.

1.2 Section A – The State of the Industry (Chapters 2–6)

This section of the book sets the scene with an overview of the current global state of our industry today. Chapter 2 takes a global overview from the start of the millennium. It looks at world cycles, industry and regional trends, and the good and bad news and their consequences. Following this in Chapter 3, Judy Adams, Director of Turner & Townsend, provides a really interesting overview of the issues faced by construction consultants in the international market place. Chapter 4 looks at the common causes of project failure and puts forward 35 common failure causes. In Chapter 5, Professor Rudi Klein addresses the issues of the use and abuse of construction supply chains and puts forward that the links for failure and success lay between communications, cash, people, and the product. Chapter 6 concludes this section by focusing on the UK construction crisis and the viability of tier‐one contractors and supply chains, and shares lessons learned for improving the risk profile of infrastructure. At the end of this section the reader will be armed with an understanding of what the problems are that we face and will be equipped with a sound understanding of the issues that businesses currently face.

1.3 Section B – People and Teamwork (Chapters 7–11)

This section addresses the fundamental foundation block – people and how they are organised (teams and teamwork). These chapters provide solutions that address the foundation issues above all, which are all about people, their behaviours, values, and the organisational structures that they work in. In Chapter 7, we look at personal characteristics and corporate practices that can be obstacles to senior management and Board success. Chapter 8 focuses on structuring successful projects, with emphasis on the human element and effective teams. In Chapter 9, David Somerset, a respected dispute resolver, focuses on the criticality of understanding and managing difficult relations to achieve a successful win–win outcome. Tony Llewellyn in Chapter 10 puts forward that social intelligence is essential for project success. Finally, Chapter 11 brings this section of the book to a close, pulls all the strands together and focuses firmly on the human factors – getting the right people into the team. Without doubt, at the end of this section you will have grasped that it is people, people, people, and their behaviours and values, working in appropriate structures that set the right environment for success.

1.4 Section C – The Right Framework – Forms of Contract, Business Models, and Public Private Partnerships (Chapters 12, 13, 14, 15)

Getting the right contractual environment is essential to allow competent people and teams to deliver successful project outcomes. This section looks at business models, the form and terms of contracts, and the need to create the right supply chain and commercial environment to allow competent people and effective teams, outlined in Section B, to work successfully – setting the rules and boundaries! In Chapter 2, Rob Horne, a ‘seasoned’ construction lawyer puts forward, with examples, that getting the contract right is a fundamental risk management tool. In Chapter 13, Richard Bayfield then discusses the New Engineering Contract (NEC) interface with early warning systems ( EWSs) and collaboration. Chapter 14 puts forward Jon Lyle's personal international experience with development contracting. This section concludes with Chapter 15, which provides a general overview of Public Private Partnerships (PPPs) and makes recommendations for improvements to PPP contracts.

1.5 Section D – Management of Risk (Chapters 16–23)

Dr Robert Gaitskell QC opens this Section with Chapter 16 looking, not surprisingly, at human factors. Chapter 17 outlines effective risk management processes and John McArthur in Chapter 18 takes us though the relationship of success with risk management in North America. In Chapter 19 Edward Moore and Tony Llewellyn explain how an EWS provides the project community with simple but powerful early warning signals, which should be a standard part of all project management.

In Chapter 20, Rob Horne looks at advances in technology that aid in the management of construction risk. Graha...