Every construction project relies on collaboration. Ideally, this begins even before the start of planning and shapes every relationship – be it between clients and contracted companies, among service providers, or within teams. We explore why collaborative working models have such a huge impact on a project’s success and what changes the construction sector is currently seeing.
For all the technical progress, one thing has not changed since the pyramids were built: large construction projects involve a lot of people. And when problems arise in large-scale projects, it is often the result of failed collaboration. This was the finding of comprehensive investigations and analyses conducted in 2014/15 into project failures such as the construction of the new airport in Berlin and the Elbphilharmonie in Hamburg, which both produced a lot of negative headlines and caused an enormous loss of trust in German engineering and architectural expertise.
The Federation of the German Construction Industry played a major role in developing a ten-point plan, lighting a new spark in the industry. The plan included cooperative execution and contract models which resulted in a different approach, fair risk distribution, more open agreements, and the effective use of building information modelling (BIM) and lean construction in projects.
“The sector has totally rethought how it works, especially in building construction.”
Matthias Jacob, Country President and Head Buildings Germany
Eight years later, the way collaboration works in Germany has fundamentally changed, believes Matthias Jacob, Country President and Head Buildings Germany. “The sector has totally rethought how it works, especially in building construction, where we tend to work with private clients. Our project portfolio reflects this transformation: we usually work together in a very cooperative way,” he explains. “Civil engineering, where the clients are mostly public sector bodies, is unfortunately lagging behind despite some initial successes.”
Focus on overall project success
It is a similar story in Switzerland, where, according to Jens Vollmar, Head of Division Buildings, classic project processing models often reinforce inefficient incentive structures. “Once the contract is concluded, the parties involved often begin discussing responsibility and blame as soon as something unexpected happens – which can lead to resources being allocated incorrectly,” he says of the usual practice. “The unexpected is unavoidable in complex projects. To prevent inefficiency, delays and drops in quality, everyone involved needs to work towards the success of the project as a whole, instead of trying to come out of it best themselves.”
WHICH PARTNERSHIP MODEL FOR WHICH CONSTRUCTION PROJECT? THIS IS HOW COOPERATION WITH IMPLENIA WORKS
How can new models of collaboration prevent these kinds of failure and the resulting legal disputes? Matthias Jacob: “The most important thing is to commit to a cooperative approach. That starts even before planning begins, by getting the client and as many of the people involved as possible around the table. When experts from a wide range of fields work towards a shared goal, it increases the chance of spotting and avoiding potential problems early on. This reduces the risks to scheduling, costs and quality.”
The client as a partner
In legal terms, the approach works through two or three-level contract models: for the initial phase of getting to know one another, for setting up the project, and for the implementation itself. For large-scale projects, this often means investing months in setting up a project correctly. And although cost targets are agreed, no-one takes on contractual risks that are not yet clear. “If the total project amount is EUR 180 million, for example, only around EUR 70 million of the costs might be set out contractually in the first stage,” explains Jens Vollmar. “The remaining budget items are developed together with the subcontractors as the project progresses.”
This cooperative model of collaboration benefits everyone involved, even if clients often have the sense that they are giving up some privileges. Experience shows that clients, too, have everything to gain. Instead of having to ensure adherence to 300 or 400 individual contracts, they benefit from teamwork between everyone involved. As a result, in almost every case, they get a higher quality property, earlier and at lower cost than planned, and achieve the returns they want.
“When we succeed in establishing trust, agreeing on shared goals, and balancing the interests of all parties effectively, we ultimately achieve much better results.”
Marc Bosch Managing Director Wüstenrot Haus- und Städtebau GmbH
No wonder that clients who have experienced cooperative construction swear by this kind of collaboration. Like Implenia customer Marc Bosch, Managing Director of Wüstenrot Haus- und Städtebau GmbH: “When we succeed in establishing trust, agreeing on shared goals, and balancing the interests of all parties effectively, we ultimately achieve much better results.”
Both Matthias Jacob and Jens Vollmar work actively in associations to spread this message and thus propagate more progressive contract models, both in German civil engineering and in Switzerland. “We are trying to convince public clients and architects in particular of the benefits,” explains Jens Vollmar. For this purpose, the Schweizerische Baumeisterverband [Swiss association of master builders] has issued a publication named “Using the right collaboration model for project success”.
The future: integrated project processing
At the same time, his team is actively trialling new models of collaboration, for example using the IPD (integrated project delivery) method to develop its own projects. The method originated in the USA, where it has become established as an alternative to traditional forms of project execution.
COLLABORATION MODEL OF THE FUTURE - INTEGRATED PROJECT DELIVERY (IPD)
Integrated project delivery (IPD) aims to increase efficiency in real estate projects and improve results. Using this approach creates an environment that fosters collaboration, innovation and value creation in project work. Lean construction methods are also incorporated.
FIVE CORE ELEMENTS OF EQUAL VALUE:
Involving stakeholders at an early stage: Continuous collaboration between clients and those planning and executing the project from start to finish
Shared opportunity and yield strategy: Transparent, success-related pay for everyone involved in the project, in line with the principle of “everyone wins or everyone loses”
Joint project management: All members of the project team work in an integrated way even beyond the company, have equal status, and share responsibility for the project’s success
Multi-party contract between clients, planners and executing companies: Targets are defined together by everyone involved, forms of collaboration decided on in terms of culture, organisation, methods and processes, and the payment system agreed
Liability and project insurance: Mutual exclusions of liability foster a shared alignment of interests and allow collaboration based on trust
“In cooperative multi-party contracts like IPD, everyone involved benefits from the project’s success,” explains Jens Vollmar. “By the same token, they share liability when something goes wrong and one of the partners is at fault. A model like this suddenly triggers different discussions. If the structural engineer makes a calculation error, for example, that would previously have been the problem of the sole contractor, the construction engineer or their insurance. Now, all the partners try to find solutions together – perhaps reducing the weight or trying different processes. That is much more likely to make the project a success than asking who bears the contractual risk.”
“With cooperative contracts, everyone benefits from a project’s success.”
This new way of collaborating demands a new way of thinking – and some persuasion, sometimes even within one’s own company. Many staff have already fully embraced this new mindset,” says Matthias Jacob. “But in some places, we still have our difficulties. The construction industry has been in combative mode for so long, that cannot change from one day to the next.”
The best way to actively guide the transformation is by setting an example, he believes. And sometimes, the make-up of the team needs to be changed in order to achieve the goals. What discussions and workshops show? Matthias Jacob: “The ability to walk in the other person’s shoes – accepting and understanding the other position – is vital to good collaboration. If we can do that, there will be no losers in a project, only winners.” Jens Vollmar: “Collaboration works when we begin discussions early and transparently, both internally and externally. This includes an open feedback culture, regardless of hierarchies and roles. That is the only way to resolve challenges before they develop into massive problems.”