Driving successful outcomes for your construction clients
This should be at the forefront of our minds at the start of every construction project. How do we get the best results for our client?
The usual three criteria for measuring success in the construction industry are:
Programme: completing the project on time.
Budget: completing on or below budget.
Quality: achieving a high-quality finish.
Are these unrealistic criteria given the amounts our clients invest in delivering projects? I don’t think they are. So why is it often so hard to consistently deliver these outcomes?
The problem is with the way we do things. Our current model of construction in New Zealand doesn’t work and we have to fix it, but it needs a collective buy in and willingness to change.
In recent months I have read about, and listened to, many clients, consultants and contractors saying that project success is driven by choosing the best procurement route. Design and Build has become far more popular, mainly because it suits a given individual client and organisation. But did anyone ask if it was best for the project and whether it would deliver to the needs of the client? Follow-on question: Did the client receive the best procurement advice to enable them to make an informed decision?
Delivery to a particular procurement route does not necessarily mean project success. Instead, choosing the best procurement strategy for the project should be driven by client needs and success factors for a specific project. A procurement strategy that works well for one project may not be best for the next. Each project strategy should be determined based on the needs, wants, drivers and success metrics of that client.
Procurement strategy is not a one size fits all. It is always client and project specific….and its only one piece of the puzzle in producing a successful project.
So…how can we get back to the best outcomes?
It all stems from the project set-up—and I don’t mean from day one of construction, but right from project inception—to ensure that the project strategy is correct, due diligence is undertaken and the right skillsets are involved from the outset.
The correct strategy and associated advice, coupled with good communication and a collaborative team attitude sets the project up for success. This approach enables informed input into the projects’ business case and a genuine collective view of what the project is trying to achieve. By avoiding silos between teams, the success of the project becomes the collective focus and all parties win.
Undertaking early due diligence benefits the project’s later stages by getting the correct team on board to develop a well-defined scope. Too often, Project Managers are brought in after other consultants are engaged, and we see scope gaps between consultants. These lead to assumptions and less cost and programme certainty by pushing risk into the construction phase.
Patrick MacLeamy’s Curve of Influence from 2004 is as relevant today as it was back then. It highlights that a project becomes more difficult to change the more developed it becomes, and advocates frontloading effort earlier to reduce the ultimate cost of design changes. In my view, we should not be going to tender until we have maximised every opportunity to have a complete, accurate and reliable design, and de-risk the project as much as possible.
Patrick MacLeamy’s Curve of Influence, 2004
Successful project initiation, including bringing together people from across different disciplines to create teams with the right expertise, can take more time and effort at the start. But this investment up front will be repaid many times over in delivery. The early involvement of a good Project and Design Manager also greatly benefits the project. My own cost benefit analysis on a selection of projects has demonstrated significant cost spend late in the project resulting from poor due diligence and project set-up, which could have been mitigated by earlier access to project management expertise. I will dive into the findings from my cost-benefit analysis in more detail in a future article.
What does ‘best’ look like for our success criteria?
Referring back to the three success criteria I identified at the start, what does good practice look like?
Programme: Completing the project on time
Explore how to achieve programme and completion certainty from the outset, to set a realistic initial completion date. Surprises and delays during the construction phase are the greatest reason for a delayed initial completion. This is not to place blame on the contractors as they are often caught out as much as the rest of the team. Programme certainty can be achieved through appropriate project set-up and a thorough due diligence process at the start of the project. When this is done correctly, the project achieves greater cost and programme certainty.
Budget: Completing on or below budget
It’s critical that the budget is realistic. We often come across budgets set years in advance or established after poor due diligence. These circumstances leave the project team trying to deliver the same scope for an out-of-date budget, or a budget that doesn’t match the scope. An impossible situation, which could be avoided with more time spent planning at the project initiation. In most cases the budget won’t increase, so the pressure comes on to provide the greatest cost certainty at the earliest opportunity.
Quality: Achieving a high-quality finish
The key here is the setting of clear expectations from the beginning, acknowledging that there can be different levels of quality. These expectations must be bought into by all parties, as the most common mistake is not having input or buy in from the end users and this is where the problems materialise when perceived quality is not met. This requires open communication to ensure that all parties agree to the quality standards that will be delivered.
What does the client reckon?
Reflecting on the conclusion that more time invested at the front of a project results in better outcomes, I decided to delve a little deeper with one of our clients. So, what do they think?
The client I spoke to cited delivering quality service, doing what we say we will and value for money as the most important elements of the client relationship. Strong initiative and leadership, as well as understanding the client’s business operations, were also extremely important, as was feeling valued.
The ability to deliver on these elements, particularly in relation to quality service and good value for money, relies on project managers being engaged early enough to be able to influence decision-making. Meanwhile, project success also relies on the client taking heed of the advice they are paying for to enable the project team to do their jobs to the best of their ability, with minimal constraints. Open communication at the start of any successful project must include a discussion about the client’s responsibilities as well as the contractors.
So….how can we drive better outcomes for our construction clients?
In the New Zealand construction sector, we need to start thinking about projects and programmes in new ways and our focus must be on getting projects and programmes right from the start. Gently coaching our clients to invest more at the front-end of the project in design and due diligence will reap benefits across the project lifespan, resulting in better, quicker and more cost-effective outcomes for everyone.
Stephen Threadgall is The Building Intelligence Group’s Canterbury & Upper South Island Lead and an experienced Project Director. His project and construction management experience has been gained over more than 20 years in the UK and New Zealand, including extensive involvement in the Christchurch re-build. Stephen can be reached at s.threadgall@tbig.co.nz.
