“Any Construction Project Is a Problem in Progress”

What separates successful owners, contractors and subcontractors from the unsuccessful ones is the ability to effectively manage problems. Through the effective management of problems with good people, problems can be resolved without deteriorating into serious disputes, or if disputes occur, they can be more timely and inexpensively resolved.

The late Ohio State Football Coach Woody Hayes used to say “you win with people.” And so it is with the successful management of a construction project. A study analyzing problems on construction projects determined that people were the most important factor in avoiding disputes.

A civil engineering professor at the University of Colorado who studied this subject – James Diekmann – said it best when he stated:

The most interesting thing we’ve found is that people are really the key. Even a terrible project built under terrible circumstances can avoid disputes if it has good people. Likewise, even the simplest project built with the best process will have problems if the people are not good.”

1. Employ people empowered to make timely decisions and assume responsibility for them.

If the people witnessing and discussing problems in the field have no real authority, decisions are delayed, time is lost and the climate deteriorates. As information is moved up the “chain of command” it invariably becomes more general and less clear. If someone is empowered to make a decision in the field (and will be “backed up” by corporate), people will be more willing to take risks and assume meaningful responsibilities to solve problems cooperatively. Most importantly, when a commitment is made, it must be kept. Your word must be your bond.

Even when authority must be obtained from the corporate office, there should be specific agreed upon time frames for response.

On projects where schedule is critical, often times a bad decision is almost better than no decision at all.

2. Utilize contracting and construction management methods designed to make timely, fair and binding decisions.

The Construction Industry Institute found that adversarial relationships most frequently occur as the result of poorly defined project scope, excessive changes, improperly managed decisions, lack of communication and unrealistic project schedule and budget. Managers should strive for equitable documents that clearly set forth the scope of work with realistic time frames. Measures should be taken to encourage prompt decisions that are well communicated. Lines of communication and decision making should be well defined. Surprises or unrealistic expectations only encourage disputes.

3. Utilize Contract Documents that are clear and a fair sharing, not a shifting, of the risk.

A problem project often develops when a party feels that it has been treated unfairly, particularly if they are losing significant sums of money. Risk-shifting simply sets the stage for legal wrangling and litigation as the parties split legal hairs without looking at the perspective of success of the project and all team members.

Instead, the parties should only share the risk they are best able to manage and control – rather than just shifting it downstream on the construction “food chain.”

4. Seeing is believing – document the problem.

If a problem is worth complaining about – it is worth documenting properly. Construction project files are filled with paper, but short edited videos, photos, color charts, summaries and other demonstrative evidence get the attention of decision makers and help the issue come alive. Once the key decision makers appreciate the seriousness and urgency of a problem, they are more likely to take affirmative action to solve it before it becomes worse.

5. Realize that a fair settlement is one where both sides are equally displeased.

Many problems escalate into disputes because both sides are trying so hard to win that they forget that the primary goal is to solve the problem. To do so you must also try to find some common ground and let the other side come away with something of value as well. Only then can the issue be settled and the long term relationship preserved.

Remember these five tips and you will go a long way towards solving problems and minimizing the risk associated with troubled projects.