If you are reading this article, the chances are high that you have more than a passing interest in dispute avoidance, mitigation, and resolution particularly as it relates to the construction industry. While there are many technical, operational, and legal processes and best-practices that aim to assist contractors and owners in reducing the likelihood of a dispute or to mitigate the overall risk associated with a dispute, a topic that is less frequently discussed in relation to dispute avoidance, though no less important - is that of leadership.
As an MBA alumnus, I have the privilege to stay involved with the business school by serving as a leadership coach for current students. This involves facilitating groups of students as they work through simulations designed to replicate real-world dilemmas. The purpose of these simulations is to teach students to navigate the challenges associated with leading groups, make timely decisions based on incomplete data, and balance individual motivations with team objectives.
If you read the previous sentence and immediately thought, “That sounds like what I deal with every day” -- you are not alone!
Construction’s Unique Challenges
Construction leaders, both in the office and in the field, face a unique set of challenges when compared to other industries. A prime example is the sheer number of stakeholders involved in a construction project – ranging from those funding the project to the sub-tier contractors physically putting steel and pipe in place.
Each stakeholder has their own set of interests, stressors, and goals. While the developer of the project site may be focused on the timing of completion, the lease-up of the facility, and the status of their relationship with city officials, the surety may be primarily concerned with the performance and financial health of the contractor.
As if that were not complex enough, it is also true that even within the same company different individuals can have personal goals that do not necessarily align. Consider the electrical subcontractor’s Project Manager whose immediate career trajectory may be determined by the financial success her company has on the project. This can be contrasted with the Project Executive who is entirely focused on the relationship with the general contractor to increase the chances of landing a future project.
The situation is further complicated by the fact that construction project teams are rarely repeated from one project to the next.
This means that not only do the collaborators involved in a construction project have individual goals that may or may not be aligned with one another, but many of the team members have never worked together in the past! These factors, coupled with the capital-intensive (i.e. expensive) nature of construction are a combination which, if not managed properly, can lead to disastrous results - as evidenced by the billions of dollars of construction currently in some form of dispute resolution.
So, the question becomes:
How can construction project teams appropriately balance individual objectives with overall project goals in order to create a shared future that considers all stakeholder interests and produces innovative solutions? Oh – and that all needs to be done quickly because according to the schedule you are already behind!
The Missing Piece
As many of the MBA teams discover in the simulations, there is a common theme that emerges which explains many of the pain points and failures experienced by both the MBA and construction teams…
Trust.
Or rather, a lack of trust.
Tell me if this sounds familiar to you,
“I felt like our discussions were guarded and we were all holding something back.”
This is a quote from a current MBA student during a recent simulation. This reflection hits the nail on the head. It reminded me immediately of countless OAC (Owner-Architect-Contractor) and subcontractor meetings that I have attended in the past.
In his book, The Five Dysfunctions of a Team, Patrick Lencioni astutely places the “Absence of Trust” at the base of his pyramidal model for the common pitfalls individuals and organizations fall into – which lead inevitably to a lack of effective teamwork.
As can be seen in Lencioni’s model, the absence of trust on a team is directly linked to several other ‘dysfunctions’ that hinder project success – fear of conflict, lack of true commitment, etc.
So, what exactly is an “Absence of Trust”?
Put simply, it means that the individuals comprising the team are not comfortable being their true authentic selves and are unwilling or unable to be vulnerable to each other. Team members who are not open with one another about their own mistakes and shortcomings make it impossible to build a foundation for trust.
As Lencioni puts it in his book,
"As 'soft' as all of this might sound, it is only when team members are truly comfortable being exposed to one another that they begin to act without concern for protecting themselves. As a result, they can focus their energy and attention completely on the job at hand, rather than on being strategically disingenuous or political with one another."
From a dispute avoidance perspective, the above quote is particularly relevant and is critically important to understand. This is because while the vast majority of contractors and owners naturally desire to avoid damaging relationships with clients and/or costly litigation, an extreme focus on protecting only oneself and keeping project team members at arms reach in an attempt to stem off a potential dispute never allows the project team to become “High Performing”. Ironically, this less-productive, low-performing team that hasn’t cultivated the foundation of Trust necessary to effectively communicate issues within the pressurized environment of a construction project is actually more likely to find themselves heading into a dispute!
This is not to say that the members of the project team should abandon the processes, procedures, and best practices developed to protect themselves in the event of a dispute. Simply that a focused effort must be made by the project executives, managers, and field supervision to ensure that while following these procedural best-practices, authentic relationships built upon mutual trust, are still fostered among all project stakeholders.
How to Identify if Trust is Lacking
Below are a few additional red-flags that may indicate the level of trust within your team is lacking.
1. Communication is “guarded”: Team member’s true motivations or intentions are not openly discussed - which can result in other stakeholders making inaccurate assumptions or even projecting their own motivations;
2. No safe space for conflict: Team members do not feel comfortable disagreeing with one another. This leads to false consensus - team members not truly buying in to the plan even though they “agreed” to it;
3. Hesitate to offer help outside their own areas of responsibility; and
4. Dread meetings and find reasons to avoid spending time together.
Teams with a lack of trust tend to spend far too much time managing the way they interact within the group rather than focusing on the overall objectives of the team.
If a lack of trust is evident within your project team, the logical next question is: How do we create trust?
Creating Trust
One of the key lessons for any leader to know about building trust is that as leaders, it is our job to cultivate an environment in which trust can flourish. This means creating an atmosphere in which our team members feel safe to give their true, unedited thoughts and opinions. Often, this means being the first person to show vulnerability – speaking up when you need help, openly discussing your motivations, giving the other people on the team a glimpse at the real you and putting aside your own need to be invulnerable in the eyes of your team mates.
This may seem counter-intuitive when considered through the lens of dispute avoidance, mitigation, and resolution. Indeed, the ability to balance the necessary legal and procedural best practices to protect one’s own interests while simultaneously building authentic, trust driven, relationships with other project stakeholders is one of the most difficult to finesse. Mastery of this skillset separates the good leaders in construction from the very best.
Unfortunately, as we all know, trust is not built overnight. In the construction industry, project teams are rarely the same from one project to the next and with today’s aggressive construction schedules, there is no time designated for “building trust” – despite its criticality. This is one reason it is so crucial for construction teams to utilize the most effective and proven methods available for building highly performing teams and to make conscious efforts to foster trust within the project team from day one.
A version of this article was originally published on LinkedIn.
Chase Callaway is a licensed Professional Engineer and globally certified Project Management Professional with David Pattillo & Associates, a Socotec Company. He has a decade of experience in the construction industry providing project management and consulting services to owners, contractors, architects, and engineers. Chase has worked on Domestic and International dispute engagements related to the construction of power generation facilities, mining operations, oil and gas operations, manufacturing plants, and government facilities. He also has extensive experience in the construction of commercial, industrial, educational, and medical facilities. Chase obtained a B.S. in Mechanical Engineering from the Georgia Institute of Technology and his M.B.A. from Emory University’s Goizueta Business School with concentrations in both Strategy and Leadership. While at Goizueta, Chase was honored to serve as President of the Evening MBA program during his final year and was elected by his peers to receive the Core Value Award for Community.
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