Turning Points Are the Key to Construction Performance

By
Tuesday, January 5th, 2016
liked this article
Embed
Allegion – 300 x 250 (expire Feb 28)
advertisement
turning point
FavoriteLoadingsave article

Back in the now dim days of the early 2000s, I undertook a study for the Property Council of Australia with my colleague Tom Crow to determine what successful construction projects had in common.

We looked at more than 30 projects, 28 of them making the cut and qualifying for our definition of ‘excellent’ project. Our criteria were simple.

  1. End users are delighted
  2. The client makes feasibility
  3. The project team members make margin
  4. The project team would like to work together again
  5. The design, safety and environmental outcomes are outstanding

Our work showed that only 10 per cent of construction projects perform extraordinarily overall and attain excellence relative to those criteria. Increasing the number of projects that attain excellence can have a major impact on national productivity; a 10 per cent overall industry productivity improvement achieves a 2.5 per cent increase in GDP.

There was a light bulb moment that happened after we had begun interviewing the hundreds of people we spoke to about their experience of those excellent projects. It occurred to us that there were four turning points in a project’s life that contribute most to this improvement, and that whilst the events leading to the turning points can greatly differ, the turning points all have a significant impact on project outcomes.

Turning points are the critical events in a project’s life cycle which determine the project’s direction and likely performance outcome.

The four turning points we identified, their drivers and events associated with each, are summarised in this diagram.

chart

The concept of turning points helps explain and address the difficulties experienced by the industry when putting in place project delivery strategies to satisfy end-user and client needs, and particularly when they are constrained by a contract nominated by a client’s policy, solicitor or general practice adopted by professional institutions.

There are issues with three of these recurring and defining moments on too many projects. Firstly, the question most asked by clients when commencing a project is, “what contract do you propose using?” This question always appeared to be “putting the cart before the horse,” as it came before determining the project mission of what end-user needs had to be satisfied.

Secondly, contracts have become more voluminous, complex and risk averse, with project team members often struggling to cope. Further, they seldom received training on contracts, which often changed on successive projects. This lack of training often leads to people administering projects based on their previous experiences rather than current requirements. This situation in turn creates an industry desire to adopt a minimum number of contracts as industry standards.

Thirdly, many project outcomes are critically impacted by one or more major events. These events are analogous to ‘turning points’ often associated with major sporting events. These project turning points appear to be irreversible and raise questions of how they occurred, what were the turning point drivers and what strategic decisions led to the turning point?

These ‘turning points’ appeared are associated with:

  • The client’s initial decisions as to what was required, whether or not things would proceed and if so, how they would proceed. All of these are part of  ‘establish project environment.’ While the opportunity is presented here for the client to be visionary, too often clients have been observed to only adopt project strategies which are dictated by a particular contract.
  • Formation of project team, their selection and interrelationships which have been described in the diagram as ‘establish project team and strategies.’ This team formation necessarily involves the client making strategic decisions for the project.
  • Preparation of project implementation plans, or tactics, and the critical ownership by the project team, which has been described in the construct as ‘establish project business plan.’
  • Teamwork and monitoring performance during design and construction, operations, described in the construct as ‘establish control and communication.’

As it turned out, we were not on virgin ground here – there was respectable international literature identifying similar issues and events that affected project outcomes.

  • Turning points can be used to forecast project outcomes within a life cycle framework, which is based on the stakeholder project management model. The model involves stakeholders in the project team both sharing and owning the project objectives, and considers asset management needs as a key input into preparing project briefs.
  • Giving high levels of authority to the project director, generates an increased likelihood of success. Research shows a direct correlation between project organisational design and project success, but it also shows that technical competence is not related to project success. This success requires client leadership to determine both the project organisation (strategic phase) and project controls (initiation phase), both being potential turning points.
  • Research on the benefits of project controls indicate another perspective on turning points – the  optimum allocation of resources to the project team, project planning and control efforts. If an outstanding project outcome is required, a significant driver is resource turnover which should be less than seven per cent, while average projects have a 15 per cent turnover rate.
  • The UK report Rethinking Construction nominates the drivers of change on projects as committed leadership, focus on the customer, integration of the process and team around the product, quality driven agenda and commitment to people.

All of the events clustered around the turning points we observed in our study of excellent projects demonstrated informed leadership by the client and team to set an example to apply continuous improvement and not accept business as usual. It is unlikely that there is a definitive list of events which leads to a turning point, as circumstances vary substantially between projects. However, it is not the event but the outcome of achieving excellence that counts.

The Property Council work underpins much of the work ACIF has been doing with the Australasian Procurement and Construction Council on BIM and project team integration. It strikes me, as I reflect on that work, that the importance of turning points is just as important today as it was when we did the work, and also went on to apply to many new projects in the field. And the presence of client leadership is still the best guarantee of an outstanding project outcome.

Embed
FavoriteLoadingsave article

Comments

 characters available
*Please refer to our comment policy before submitting
Discussions