INSURANCE AND RISK MANAGEMENT

A Shared Project Offense: The Best Value Tool for Managing Project Risk

By Jim Eisenhart, Ventura Consulting Group

There’s an old

military axiom that goes something like this, “Your best de- fense is a good of- fense.” This

also holds true as it pertains

Camp Pendleton which won a local and national partnering award from the AGC, explained, “Project stakeholders need team goals backed up by specific personal commitments

that when executed will saying to risk

management in con- struction projects. A top priority

for a vast majority of construction project stakeholders is to identify, prevent or mitigate project risks for themselves personally and for their or- ganization. Considerable time, money and stressful effort is put into this endeavor prior to, during and, often regrettably, after a project’s completion. Yet, paradoxically, most of us would

agree that when everyone on a project is “playing not to lose” this intent can actu- ally provoke the risk each stakeholder is trying to prevent. For example, an owner’s effort to mitigate noise impact might hin- der your efforts as a contractor to expedite project completion in order to mitigate a risk to your profitability. You may be wondering—is there a bet-

ter way, or are our interests mutually in- compatible? By enabling a project team to develop and commit to compelling, measurable,

non-contractually binding

partnership goals where each individual is committed to “playing to win” as a team, you will find that a better way is certainly possible. Contracts can’t do this. Nor can alter-

native project delivery methods (design- build, IPD, CM at risk, etc.) or collab- orative technological tools such as BIM. Neither can good intentions, which we can all agree are short lived at best. As Lou Palandrani, Senior Vice Presi-

dent of Clark Construction and the prin- cipal overseeing the Clark/McCarthy joint venture on the U.S. Naval Hospital at

trump any individual stakeholders pursuit of their own personal self-interest. And, these goals must be freely developed, pe- riodically revisited and committed to by every member of the project team.” While it takes some work, inevitably

project teams who hammer out compel- ling team goals achieve a win-win out- come. Additionally this positive, construc-

: While it takes some work,

inevitably project teams who hammer out compelling team goals achieve a win-win outcome.

tive effort taps the full creative potential of the project team leading to further project advantages. As Peter Drucker, a leading 20th

century management thinker, says, “Results are

obtained by exploiting opportunities, not solving problems.” Use the following seven processes to

create and execute a shared offensive game plan for your project: 1. Create clear, truly compelling com-

mon project partnership goals address- ing the end user’s real intent—rarely ex- pressed in contract documents or specs. For example, “We, as a team, commit to turning over the operating rooms of the rehabbed hospital

two months earlier

than contractually required with the un- derstanding that the rest of the project will come in on schedule.” 2. Focus on pursuing opportunities as a

team, rather than just solving problems or dealing with “rocks in the road.” Rather, create your own road. For example, “We, as a team, can allow the public ongoing ac- cess to this location during construction.” 3. Once goals are established, develop

collaborative teams made up of individu- als who can best contribute to the achieve- ment of the goal or who can best expedite the process with names, dates and deliver- ables. For example, “Paul, Lynn and Frank will develop a means of expediting change orders NLT April 3, 2015.” 4. Create a behavioral protocol that

calls for personal meetings or verbal con- versation in lieu of emails or letters except to communicate data or facts. 5. Develop a joint risk identification,

prevention and mitigation process relative to achieving the partnership goals. NOTE: Typically, at least 85% of these risks can be identified by a team at the outset of their job.

6. Employ a conflict resolution proto-

col that expedites the resolution of issues and disputes while keeping trust intact and the project moving toward the team’s shared goals. 7. Create a process wherein the team

holds itself and its members accountable for their commitments and recognizes and reinforces team achievement. This process includes dealing with non-team players— a huge, potential risk if not dealt with quickly by a project team. Using the above proven processes of

playing to win as a team is by far your best value approach to mitigating risk, achiev- ing true win-win project results and ulti- mately succeeding as a world-class team— with no excuses.

Jim Eisenhart is president of the Ventura

Consulting Group in Ventura, CA and Con- necticut. He was the inaugural recipient of the International Partnering Institute’s “Ex- cellence in Partnering Facilitation” award in 2012. He has facilitated partnering on over 1000 projects worldwide with 13 of the top 15 GC’s in the US.

16 March/April 2015

California Constructor