Following his award-winning presentation at the 2013 IPWEA International Public Works Conference, Thinc’s Graham Scott considers the impact of human relationships on project success.
By Graham Scott, Senior Advisor, Thinc
It has been reported that megaprojects worth more than $1 billion are failing at a staggering rate of 65 per cent; 35 per cent for projects worth less than $500 million (Project Manager, Dec/Jan 2012).
Construction disputes are also on the increase, along with the direct cost of resolving disputes in Australia. Recent estimates suggest disputes cost the industry $560–$840 million per year. Another report found that the transactional costs for resolving disputes and claims may total up to $12 billion a year.
These are worrying trends, but what is their root cause? There are a number of contributing factors – not least the global economic slowdown and more confrontational tendering practices, but we believe there is something deeper, which the industry has ignored for too long: the impact of human relationships on project success.
WHY DO PROJECTS FAIL?
It almost sounds too simple, but it is widely recognised that projects generally fail because of human behaviours, not technical issues.
“By and large projects are not driven to failure by a lack of technical knowledge, but by project behaviours that may be reasonably anticipated,” William Hayden wrote in the journal Leadership Management in Engineering
However, unlike other industries that have realised the contribution of human factors to performance, safety and success, the construction industry still has its head in the sand. We need to recognise the importance of non-technical factors and manage them to reduce project failure and improve outcomes.
THE FIELD OF FORCES
In any endeavour there are dynamics that impact outcomes – applied psychology pioneer Kurt Lewin referred to these factors as a “field of forces”. A crucial aspect is how the dynamics interact with, and how this ‘chain reaction’ impacts performance.
In the project context, there are three dominant groups of ‘forces’ that interact with the project environment and influence project deliverables and outcomes: technical, sociological and psychological. The Thinc Team Dynamics Process Model (pictured, above) shows these circles of dynamics operating within a greater system, which is the project or organisational environment. The circles, whilst independent, also impact each other.
Just as risks in technical areas of a project lie dormant and are typically planned for, sociological and psychological factors (which usually manifest as team performance risks) also have the potential to impact project success, often with devastating results. Understanding these dimensions and how they interact in the project environment and adopting a planned approach to mitigate them, will dramatically reduce project risk.
SUCCESS FROM THE OUTSET
Our research has shown that the most successful projects have a structured process to facilitate a collaborative, high-performance team, including:
Establishing a functional governance structure with defined roles, responsibilities and interfaces;
Aligning all parties to expectations, including contract methodology and ideal culture;
Identifying high-performance team objectives;
Collaboratively developing a planned approach;
Developing a risk-management plan; and
Monitoring the plan through the life of the project.
THE TEAM-BUILDING TRAP
Many projects opt for some form of ‘team-building’ event or intervention. Whilst a one-off hit may provide a shot in the arm, it is unlikely to have a sustainable impact on the project team. To be really effective in adding value to a project, any approach must be structured with clear objectives and KPI.
High-performance teams achieve higher standards and better project deliverables. A structured process to team development removes the ‘hit and miss’ from team building and leads to definable improvement in issue resolution and communication. This ultimately translates into better organisational outcomes.
Thinc is an independent management consultancy, specialising in projects. For more information, visit www.thinc.com.au
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