University of Salford

1
University of Salford Trust in Construction MSc
Workshop Sessions Reading University 3rd December
2002
2

Trust in Construction Presented by Dr. Will
Swan University of Salford/ CCI
3
Trust in Construction Achieving Cultural Change

• Trust is seen as key to successful delivery of
  construction projects
• Trust has been highlighted in the following
  recent reports
• Rethinking Construction (1998)
• Modernising Construction National Audit Office
  (2001)
• Accelerating Change (2002)
• What is it, and why is it important?

4
What is trust?

• Trust can be defined as,
• We define trust as a willingness to rely on the
  actions of others, to be dependent upon them, and
  thus be vulnerable to their actions. We are
  mainly interested in trust as it affects the
  willingness to co-operate. (Wood and McDermott
  1999)
• Trust in Construction (EPSRC)
• 2 year research project
• Looking at trust issues in live project
  environments

5
Exercise 1 Trust Issues in a Case Study

• Why is it important?
• Read the scenario handed out
• Try and identify issues within the project that
  have damaged or improved trust.
• Offer some potential solutions to problems or see
  how you may reinforce positive behaviours.
• 15 - 20 Minutes Preparations
• 5 Minute Presentations

6
What are the key Trust Issues?

• Trust is built there is an identifiable process
• Communication
• Action
• Outcome
• It is important how these are perceived

7
In this Exercise.

• The client said they would advise the elected
  members to go for a GMP, but the contractor had
  to win the bid at lowest cost.
• The contractor bid for the work at a lower than
  usual price.
• The elected members did not accept the advice of
  their Technical Services Division.
• Contractor stuck with a potentially loss-making
  job.
• Trust between the two is damaged before the work
  has begun.

8
But it Doesnt End Here!

• Contractor thinks.
• Client team have not done there best for me
• Client thinks
• Contractor cant make money and will try to get
  claims. I had best protect myself.
• Contractor site manager thinks
• This job will never make money. This could be
  bad for me.
• Client RE thinks
• I am going to have to watch this lot. They are
  going to try to pull the wool over my eyes.
• Everybody positions themselves for the assumption
  of failure rather than seeing the problem and
  taking some time to discuss it. The situation is
  exacerbated.
• Negative behaviour reinforces itself

9
Key Issues

• Can you keep the promises you make? Are they in
  your control?
• Financial and contractual arrangements can and do
  affect site behaviours no-one wants to be
  associated with a failing project.
• If things are going wrong and you know they are
  going wrong deal with them straight away do
  not prepare for disaster or carry on regardless,
  hoping they go away.
• Lowest price does not equal Best Value if there
  is no money to be made then something will have
  to give which will be detrimental to the project,
  reputations or relationships. Profit is not a
  dirty word.

10
Communications

• Relationships were new there is a learning
  curve. Why do we pay for computers, phones and
  networks, yet we are unwilling to invest in
  building relationships that make these tools
  effective?
• There were weak structures for communication
  and these were not adhered to.
• Communications were mediated between the
  management teams who had a good relationship
  by site personnel who did not.
• Letters are flying between the site manager and
  the client representative on site, but there is
  little face-to-face communications even though
  they are based in the same office.
• There is strong adherence to the design and the
  contract.

11
Communications, Risk and Uncertainty

• Poor relationships mean information is not
  flowing in a quick and effective manner.
• Risk is not being identified and placed where it
  can be most easily managed it is being put onto
  who will take it.

12
Communications, Risk and Uncertainty

• Poor communications mean that the team cannot
  respond to new information effectively.
• They are not flexible for the benefit of the
  project.
• The cannot jointly make decisions for mutual
  benefit i.e. they cannot undertake value
  engineering.
• They cannot or are unwilling to highlight small
  problems, until they have become bigger more
  costly problems.

13
Problem Solving vs. Blame Culture

• Any site issues were always a source of conflict
• Conflict is not necessarily bad it is how it is
  resolved. Some project teams look to it as an
  opportunity for learning.
• If something goes wrong you have to be honest
  with yourself. I think blame culture is really
  bad. Everybody is human and things do go
  wrong.You have to accept these things and make
  sure they dont happen again. (Client
  Representative Case 1)
• Due to the individual risk approach people
  looked to apportion blame rather than jointly
  communicating solutions
• Blame culture means problems are hidden until it
  is too late this costs everybody time and money

14
Culture and Trust

• The two main parties were from very different
  organisational cultures.
• Commercial vs. Public
• Flexible vs. Accountable
• Rethinking vs. Traditional
• Did the contractor have realistic expectations of
  how the client could react to working in a new
  way?
• Did the contractor understand that agreeing
  approaches with the management team is not the
  same as changing site approaches?
• Did the client understand that the contractor
  wanted to work in a less adversarial way?
• Did the client understand their own internal
  culture?
• It is important to understand the way the parties
  operate this can only be really achieved
  through communication and experience takes
  time.

15
Fixing the Problems

• A workshop was undertaken.
• Key issues were identified and addressed.
• Management team stated they were responsible for
  some of the problems.
• Tried to implement a GMP type agreement
• Site team offered to improve communications
• Site team agreed communications structures
• Signed an agreement to effect change
• All participants were positive about what had
  happened
• Sodid it actually work?

16
Fixing the Problems?

• No the problems returned after about 2 weeks
• GMP was not agreed
• Letter writing resumed
• Profit was squeezed further on the job
• Change is difficult but we should still try it
• Trust is hard to rebuild once lost it is
  important to act early
• No-one was prepared to take the risk to trust
• Cultures remained in place

17
Defining Teams and Stakeholders

• When working in project teams it is important to
  identify who influences and is influenced.
• They may impact the project in ways you need to
  consider.
• They may be affected by the final outcome.
• If you build trusting relationships with these
  stakeholders the project will benefit.

18
What is a Stakeholder?

• A stakeholder could be defined as anyone who is
  affected by or affects a project.
• There are probably more of them than you think.
• Important to define who they are.
• For example, the client could be,
• Whoever holds the purse-strings
• Whoever is managing for the client
• The end users
• Are you talking to the right person about an
  issue?

19
Case Study 4 Schools Project Client Stakeholders
20
What Role Do the Stakeholders Have?

• They may have information
• They may need information
• They can support or constrain processes
• Building trusting relationships will improve
  these flow of information for the project.

21
Case 4 Stakeholder Examples

• End Users
• Need to understand the issues of construction
• Have a lot of information about building use
• Ultimately extract value from the building
• LEA
• Control the budgets can stop the project
• Must meet the legal requirements for the school
  design
• Need to be informed at the management level
• Local Residents
• Have a political voice
• Can stop the project through legal means
• Need to feel they are included in/ have ownership
  of the process

22
Information and Communication is Key

• If stakeholders do not have information they will
  often assume the worst
• If they are not involved they do not care you
  have no access to their enthusiasm or experience
• If you do not know what they need you cannot make
  their life easier and allow them to support you

23
Tools and Methods for Building Trust

• Contractual approaches
• Integrating the Team
• Processes
• Clarity and Expectations
• Performance Measurement
• Culture

24
Contractual Approaches

• Contract approach may affect performance
• Contract must be
• Fair there must be profit and mutual benefit
  including the sub-contractors open book?
• Risk must be clearly identified and shared
  between the partners best able to manage it
• Must be applied flexibly for the benefit of the
  project
• Scope for pain/ gain share?
• Partnering is not contractual you can partner
  under traditional contracts it is how these
  contracts are applied
• Commitment to shared goals is the main
  prerequisite

25
Integrating the Team

• Understand who is part of the team and what their
  role is
• Understand the shared objectives of the project
• Understand the pressures or constraints on team
  members
• Involve the members of the team in the process
  where their knowledge can add value often
  earlier i.e. contractors involved in buildable
  designs, sub-contractors involved in work
  scheduling
• Have clarity of communications
• In one case the client had over 20 points of
  contact
• Main contacts should have authority to make
  decisions and act on them
• Shared understanding and expectations of the
  project

26
What Do Teams Look Like?

• What are the characteristics of this network?
• Dense a response to a complex project?
• Redundancy in communications
• Super cluster of key knowledge workers from
  different organisations

27
What Do Teams Look Like?

• What are the characteristics of this network?
• Less Dense a response to a lower complexity?
• More organisational clustering
• Less key relationships

28
Measuring Trust in Teams

• Measuring trust in key project relationships
• Use of a trust inventory developed specifically
  for the project
• Based on Bromily and Cummings (1996)
• Interviews with clients, contractors, supply
  chain, trades
• The trust inventory measures
• Communication are they effective communicators?
• Reliability do their communications match their
  actions, are they capable?
• Relationship do you share goals and values?
• Commitment are they committed to the project?

29
Processes

• Processes for exchange of information are clear
  and easy
• Processes are shared and understood by all
  participants
• Processes are not imposed, but communicated
• Processes do not sacrifice flexibility complex
  processes are often ignored

30
Clarity and Expectations

• When expectations are not fulfilled trust can be
  damaged
• It is important to manage and understand
  expectations even if performance is high, if
  expectations are not met there can be problems
  Case 4
• Good project management can prevent trust being
  damaged
• Reduces waste more money available
• Prevents clashes of work
• Everybody knows what is happening and when
• Clear communications improves the final product
  briefing and design

31
Performance Measurement

• Looking to see how well we are doing
• Key Performance Indicators provide
• Benchmarks
• Points for discussion
• Basis for shared key goals
• Pick the indicators that are important to you
• Key Performance Indicators need to be
• Relevant to you and your project
• Easy to collect and present not a huge job
• Connected to the way we work if they are good,
  see why they are good and improve, if they are
  bad, see why and how they can be improved
• Key Performance Indicators provide an objective
  basis for communication

32
Culture

• Culture determines how we do things
• Culture can be driven from the top, but there can
  be a difference between what we say and what we
  do
• Culture is not easy to change Case 2
• Culture of organisations can be seen through
• Respect for people
• Long term relationships
• Retention/ development of staff
• Performance
• Well integrated project teams generate their own
  shared culture through understanding and shared
  meaning

33
Conclusions

• Trust is about good communications
• Better briefing and understanding of stakeholder
  requirements
• Better risk management
• Better problem solving
• Less wasteful conflict
• Increased flexibility
• Trust is built through
• Experience
• Reciprocity
• Mutual understanding
• Shared objectives
• Fairness
• Joint problem solving

34
Conclusions

• Trust can be damaged
• Poor communications misunderstanding
• Negative perceptions and behaviours
• Non-performance
• Unrealistic prices or timelines
• Breaking promises
• It is hard to build and easy to break
• It has value to both companies and projects
  social capital
• Requires commitment from all parties

35
Some References

• www.scpm.salford.ac.uk/trust - Trust in
  Construction
• Rethinking Construction (1998)
• National Audit Office Modernising Construction
  (2001)
• Accelerating Change (2002)
• Rethinking Construction Rethinking the
  Construction Client (2002)
• Movement for Innovation (M4I) A Commitment to
  People Our Biggest Asset Report of the
  Respect for People Task Group