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August 13, 2019

Key essentials for collaborative contracting

Key essentials for collaborative contracting

NEC is a collaborative contract suite that encourages all contracted parties to act, ‘in a spirit of mutual trust and co-operation’. But what does this mean in practice? This article sets out the key essentials for collaborative contracting and partnering to work in the real world.

Let us start with the basics. Successful collaboration requires

  • a positive change of mindset and behaviour
  • the creation of an enjoyable working environment
  • engagement of all parties including subcontractors, suppliers and relatedstakeholders
  • moving away from ‘business as usual’ procedures.

Collaborative contracting builds on open and honest dialogue to jointly seek continuous improvement throughout the construction period. It involves helping each party to perform better and be prepared to challenge and be challenged in a constructive way to enable timely decision making.

It requires joint management of project risks and development of the most cost-effective mitigation measures to address risks and changes with fair dealing. Above all it needs leadership and communication skills to forge a culture of trust and co-operation.

Developing the right business relationship

The starting point for a collaborative approach is to develop the right business relationship, one that is founded on trust. It is a relationship that enables people to face up to real difficulties openly, certain that the response will be one of helping to solve the problem together.

The right business relationship will ultimately release the real potential of a group of people and companies, enabling them to work as one to achieve common goals, striving to improve at each step of the journey.

The reality is that true collaboration is difficult. It requires the subordination of individual goals to corporate achievement. It means engaging in tough, emotional ‘give and take’ dialogue that most teams find easier to talk about than to do. The following sections look at some of the essential features of collaboration in more detail.

Changing mindsets

Everyone in a collaborative contract needs to reflect on their own behaviour. Traditional project team behaviour is steeped in a culture of adversarial relationships, fueled by contractbound thinking and self-interest, with secrecy, blame and even deception commonplace.

Collaborative contracting requires a move to a whole-project focus. The aim is to achieve a win−win outcome through everyone being open and considering the needs of others. It involves the creation of an environment founded on trust and collaboration and where constructive challenging, in all directions, is not only accepted but expected. However, this rarely happens by itself: behavioural based workshops followed up by individual and team coaching are usually required.

Collaboration also involves the adoption of value thinking, focusing on removing waste, both in design and construction. Everyone must challenge activities and processes that do not add value.

In addition, the project team must improve the effectiveness of dialogue in all directions at all levels. Ongoing and open communication is key to establishing trust and maintaining the collaborative ethos. Understanding each party’s needs and being committed to helping them achieve their needs is vital.

Providing strong leadership

Change will not happen without the project team leaders’ understanding that change management is their main role. Strong leadership across all the organisations must ensure the embedding of a common collaborative culture and application of a ‘best-for-project’ philosophy.

Leadership teams in the employer, project managers, supervisor, contractors and key supply chain organisations need to be visible and committed to the new collaborative way of working. There should be a project joint leadership team to champion the vision, inspire the teams, align the teams to common goals, and monitor the team’s behaviour and performance in achieving the vision.

Leaders should serve as role models for collaborative behaviour. Unless the leaders are seen to be actively collaborating, then real collaboration at site level will not happen. There should also be a strong focus on stakeholder engagement at strategic level. This will include subcontractors, end users, government departments, neighbours and the public.

It is a good practice to appoint independent facilitators. Although the leaders need to sell the vision and role model collaborative behaviour, they are often not best placed to facilitate the internal process. An independent facilitator can challenge all parties equally, break down hierarchical thinking, ensure effective workshops and coach individuals and teams in collaborative behaviour.

Finally, leaders must actively recognise and reward collaboration at every opportunity. They need to move from a traditional top-down hierarchical style to a more supportive style, empowering and rewarding teams and individuals to make decisions at the lowest competent level in the best interests of the project.

Creating the right environment

Setting the right environment is crucial o fostering collaboration. This starts with the process of selecting the supply chain partners, ensuring that expectations of working collaboratively are clearly understood. It is then important for the project team to engage with the supply chain, face to face, as fully as possible throughout the journey. Ideally this should start with a launch alignment workshop, formal and informal meetings and review workshops, thereby minimising communication by letters and emails to a bare minimum.

The key is inclusivity and early involvement of partners in everything that impacts on project success. The goal should be to integrate all parties into a single team as far as possible. Key essentials are a shared vision, alignment to common goals and objectives, and shared values and behaviour.

Policies and procedures should be revised to ensure they support collaboration. This includes progress meetings, reporting systems, supplier performance rating systems, variations/claims processes and payment procedures. A procurement strategy should be established to ensure the right partners are selected, along with a commercial environment that supports collaboration and offers a fair return for all parties.

It is a good idea to co-locate teams who interface and need regular and informal dialogue, so that face-to-face communications become preferable to emails. It is also important to engage with stakeholders as early as practically possible. For example, there should be collaborative value-engineering workshops with end-users early in the design phase and ‘soft landings’ workshops well before the commissioning and handover phase.

Communication channels and processes should be collaboration-based and support openness and inclusivity. In this regard joint task teams should be set up to solve problems and improve systems and processes, to ensure buy-in and successful implementation of new processes. In particular building information modelling should be used as a collaborative tool.

Finally it is important to celebrate success, for success is usually the foundation of further success.

Written by KH Fok, BMT Hong Kong and Bryan Clifford and David Maxwell, JCP International


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