Over the course of the last week I posed the following question on LinkedIn; ‘Why don’t many construction projects meet owners’ expectations?’ This article included a link to a KPMG Global Construction Survey which reported that 53% of owners suffered an under-performing project in the previous year. (Read more on the KPMG survey.)

Many readers read and liked my questions but few added their comments, which was disappointing.

Over the course of the next 2 weeks I’ll discuss my thoughts on why some construction projects aren't entirely successful and how their outcomes can be improved.

What defines a project as under-performing?

The KPMG report defined under-performance as:

1.       Projects completed late.

2.       Projects completed over budget.

In addition, I believe the following should also be added to the criteria:

1.       Has the project achieved the desired outcomes – for instance if the outcome was to build a facility that produces 1000 units a day, and the facility doesn’t achieve this target then the outcome wasn’t achieved?

2.       Has the project met the required specifications and quality standards?

3.       Has the project been executed safely with minimal damage to the environment?

4.       Has the project achieved the best use and value of the owner’s resources?

Some projects are expensive ‘white-elephants’ or aren’t ‘fit-for-purpose’. These certainly cannot count as successful even if they came in under budget ahead of time.

The project life-cycle

Many focus on the construction of a project as purely being the construction process. But the construction phase is only one part of the overall project which consists of; inception, planning, design, construction, completion, handover and operation which includes maintenance and, in some cases, should also include the end of facility life. Unfortunately many of the errors we encounter during the construction phase could have been avoided if the earlier phases were completed correctly.

What can be done to make construction projects more successful?

When projects go wrong it is inevitably the contractor that gets the blame and the bad press. When it can’t be the contractor the fall-back position is the designers. However, in many cases the problem is because of the client. In today’s article I want to discuss the client’s role in the success of construction projects.

How can clients ensure the success of their project?

1.       At project inception the client must ensure the right project is built in the right location, at the right time. Unfortunately some projects are ill conceived, are constructed to serve personal or political gain, with little thought to what’s the best use of money and resources and whether an alternative project, or, the project in another location, could have achieved a better outcome.

2.       The project scope must be defined correctly, meaning the facility that is designed and built will meet the client’s expectations.

3.       The client must have sufficient finance for the facility. This means preparing an accurate budget which includes all the costs and when they will be incurred, as well as the source and timing of the finance. Many projects fail because of insufficient funds.

4.       They should have realistic expectations of what they can expect for their budget.

5.       Clients need an understanding of the project life-cycle, including operational requirements and costs, including maintenance, the life of the facility and its equipment.

6.       They should engage a competent design team, and where necessary project manager, who have experience with similar projects.

7.       The designers, project manager and all contractors must be appointed using a contract that has a clear scope of work, clearly articulates what each party is responsible for, and has conditions which are fair, unambiguous, and legally enforceable and which allocates risks to the parties best suited to mitigate them.

8.       The client must ensure they timeously procure all the required permissions and permits in compliance with national, state, local and industry requirements. Many projects are delayed or disrupted when permits such as environmental aren’t procured in time. These permits can have a major influence on the size and location of the facility as well as the final process and design, all of which can impact the cost and schedule.

9.       Clients must ensure full site investigations are undertaken, especially ground conditions, since some founding conditions can result in major cost and time impacts.

10.   A competent contractor should be selected to construct the project who has suitable resources available and that has executed similar projects. Contractors should not be chosen on price alone.

11.   All finance must be in place and all contractors should be paid on time in accordance with the contract conditions.

12.   The client must ensure that the project is managed properly. This management includes monitoring safety, budgets, variations, quality and schedule.

13.   There should be an agreed project schedule which is achievable and allows for normal weather interruptions, takes into account the availability of information, long lead items, approval processes, impacts due to the client’s operations, third party interactions and available access. This schedule needs to be regularly updated and monitored.

14.   The client must ensure that services required to construct and run the facility are available in sufficient quantities in time, so the project isn’t delayed. These could include, water, electricity, transport networks and sewer.

15.   At the end of the construction phase the client must have suitably trained staff to manage and operate the facility. They must ensure all project documentation, including warranties and operating manuals are handed over, and all connections and commissioning is completed.

16.   Successful project delivery demands teamwork and cooperation. If one of the parties fails the project will almost certainly not be successful.

Conclusion

Clients need to become more educated in project delivery, use the knowledge of experts, ensure there projects are managed properly through all phases and appoint a competent team based on factors that aren’t just driven by price alone.

Next week I will look at the role of designers and contractors on ensuring projects are a success and meet the desired outcomes.

Thank you for reading this article. If you found it useful please like or share it.

Please add your comments so we can all learn from your experiences.

Other useful articles by the author:

What does it take to manage a construction project?

Why should we take construction safety seriously?

Did you make a difference on your construction project today?

(Written by Paul Netscher the author of the acclaimed books ‘Successful Construction Project Management: The Practical Guide’ and ‘Building a Successful Construction Company: The Practical Guide’ (see reviews). Both books are available in paperback and e-book from Amazon and other retail outlets. This article includes information from a third book which will be published later this year. See how Paul can help you)

© 2015 This article is not to be reproduced for commercial purposes without written permission from the author.

Managing a construction project must be one of the most difficult jobs there is. To do it requires a large skill set. Some skills can be learned by attending courses, colleges or universities. Others are only learned through experience, and often the hard way – learning from mistakes!

Below are some of the skills I think it takes to manage a construction project. See if you agree. What skills do you think it takes to successfully manage a construction project? How did you learn your skills and how can we improve the skills of our future Project Managers?

Skills required to manage a construction project

·         To manage a construction project requires technical skills and knowledge (an electrical project would require knowledge in the electrical field, while managing a concrete project would require knowledge of concrete structures).

·         You may need to understand the performance of various types of equipment and machines. Some of these are used in the construction process while others will be included in the facility.

·         The Project Manager should be able to read and understand drawings, see their interrelationship, and be able to visualise the construction process.

·         You should be able to plan the construction process to ensure the project is completed in the shortest possible time, meeting the client’s milestone dates and access requirements.

·         The Project Manager has to procure materials and place subcontract orders, and then manage the delivery process and the subcontractors’ performance.

·         Project Managers must ensure that none of the workers, visitors, or members of the public, are injured or harmed in any way while on the project, or by any activities related to it. You require a sound knowledge of safety standards, procedures and legislation, which can vary between countries, clients and industries, and in some cases more than one set of safety regulations will apply.

·         In addition, an understanding of the applicable environmental legislation may be required.

·         You have to ensure that the construction project is delivered to the required quality standards, and in order to do this must be familiar with the project specifications, quality control documentation and testing procedures.

·         One of the most important aspects of managing a construction project is to be able to manage, work with, and interact with people. Construction projects involve a number of different parties, such as the client, subcontractors, the public, Designers, project staff, workers, suppliers, local businesses and building inspectors. Many of these people come from diverse countries, cultures, languages, socio economic backgrounds, and educational backgrounds.

·         Project Managers have to use all their people skills to negotiate, persuade, and lead the people working on the project, while at all times remaining calm.

·         You have to establish and maintain relations with the client, the design team and their own team.

·         You also have to be a coach, a teacher and mentor to their team.

·         Project Managers require a knowledge of industrial relations procedures so that labour harmony is achieved without jeopardising the project’s productivity, or profitability. You need to be familiar with the company’s procedures and requirements, specific project requirements, and possible union agreements, as well as legislation governing industrial relations.

·         You need an understanding of basic financial principles, be able to read and produce cost reports, and ensure the project operates profitably.

·         An understanding of legal and contractual requirements, and obligations, is a necessity since they are required to put together claims and variations for changes that occur on the project.

·         The Project Manager needs to take action to prevent problems from occurring, and solving those that do occur.

·         The Project Manager has to manage risks on a daily basis, making judgement calls which can have large repercussions. Decisions must be made every day, everything from minor decisions to major ones that could impact on the safety of the workers, or cost the project millions of dollars. Yet many of these decisions must be made in a hurry.

·         Project Managers also have to be salesmen selling themselves, and the company to clients and their teams, so as to enable the company to win and be awarded the project, and further work.

·         You also have to positively influence the contractor’s reputation.

Even when there is help

In some cases, on large projects, there may be a team to assist the Project Manager, consisting of specialist resources, such as Planners, Quality Control Managers, Safety Managers, Engineers, Contract Administrators, clerical staff, and so on. But even in this fortunate position they must manage the processes, and ensure there is full compliance on the project, therefore they’ll need to understand these processes. The Project Manager will have to delegate and motivate their team, using the skills of the individual members and guiding them towards the common goal.

 Conclusion

Then just as you have mastered all the problems on one project and successfully completed you move to a new project and do it all over again. Often the new project is for a new client in a different location, working with a new team, with different subcontractors and suppliers. The project could be completely different and result in you using different skill sets. No construction project is exactly the same as the previous one; each is unique, with its own set of problems and parameters.

 What do you think makes a great construction project manager?

 Thanks for reading this article. I hope you found it useful. Please share or like so others in your network can read it.

Other similar articles by the author:

Why we should take construction safety seriously.

Did you make a difference on your construction project today?

Simple steps to make your construction project more successful.

(Written by Paul Netscher the author of the acclaimed books ‘Successful Construction Project Management: The Practical Guide’ and ‘Building a Successful Construction Company: The Practical Guide’. Both books are available in paperback and e-book from Amazon and other retail outlets. This article is adapted from information included in these books. )

© 2015 This article is not to be reproduced for commercial purposes without written permission from the author.

Some weeks ago I posted two articles ‘Understanding what impacts your construction company’s reputation’ and ‘Why construction companies should be concerned about their reputation’.  In these articles I mentioned how easily reputations can be damaged, even by individuals in the company, and how this damage can sometimes prevent the construction company from winning further work. At the time someone asked the question; ‘How can a construction company recover from a poor reputation?’

Last week I was reminded of the topic when I saw the following article: A major construction company has been faced with damaging allegations of fraud and bribery so after more than 60 years in business they have decided to change their name. Read more. Now this often happens among micro companies that run up large debts or do work badly, and then the owners reinvent their business under another name and carry on business as usual. This strategy works for them because the companies are so small they have an insignificant audience and a limited history. But I’m not sure this strategy is successful for a giant well known construction company that has made the national news headlines in both bad and good ways. Are clients that gullible that they’ll believe that a new name means a clean reputation? Then, what about the history, the good parts of the brand and reputation that are also being disposed of, doesn’t this count for anything?

My recommended action when dealing with damage to your reputation

1.       Find out the reasons for the bad reputation. It might be a poor safety record, unsatisfactory quality, ill disciple amongst employees, arrogance, frequent disputes and claims against clients or not completing projects on time.

2.       Institute damage control – that is, prevent the damage from spreading and fix the immediate problems. Now some large companies will get their spin-doctors out and issue press releases and statements. I’m not sure this is totally effective – and if anything it often spreads the bad news more quickly. Sometimes these press statements are issued too soon and don’t deal with the problem effectively, and sometimes more damaging revelations reveal themselves after the statements. It’s wise for senior management to get involved directly with the problem – don’t rely on reports, rather go and visit the problem and talk to the parties’ first-hand. Clients usually appreciate it if they know senior management is taking their problems seriously. It may stop them taking their actions further.

3.       Solve the immediate problem.

4.       Ensure the problem won’t occur again. This may include dismissing people who caused the problem, introducing new systems into the company to prevent the problem reoccurring, retraining employees, etc.

5.       Now the difficult part of the exercise comes! How do you convince your clients that the company has changed? Some of them may have been impacted by the causes of your poor reputation – it may even have cost them money. But before selling the message to your clients and the public make sure that you have definitely resolved the problems and they won’t reoccur. If similar problems reoccur after you have told your clients they won’t, then they will doubt you even more next time you tell them everything is fixed.

Rebuilding trust

Unfortunately clients can be very unforgiving and it could take time to rebuild trust again. Changing the company’s name is a bit of ‘smoke and mirrors’ which won’t fool most discerning clients, in fact it may make them feel like they are being misled.

1.       It’s important that everyone in the company knows what’s been done and what has to happen in the future. When clients talk to senior management or project managers they must get the same message. That message must be clear and include:

1.1.     ‘we made a mistake’

1.2.     ‘we acknowledge our mistake’

1.3.     ‘we have rectified the mistake by….’

1.4.     ‘we have taken the following steps to prevent the problem reoccurring….’

1.5.     ‘remember the good things we achieved in the past, what we did right and our past successful relationship and projects’.

Clients need to be convinced that the company has changed and things will be different and at the same time reminded of the things that were done well and worked.

2.       Generally the ‘proof is in the pudding’ as they say. So if you can demonstrate a successful completed project without the previous problems you are better able to tell your story. However, most clients aren’t naturally going to give you a 2nd chance to win a project with them. You may have to do it by giving them an offer they can’t refuse, that is, submit a bid price that is much cheaper than your competitors – but this could cost you money as your price may in fact have to be below cost, which has its own problems.

3.       The best strategy is for senior management to visit major clients to spread the message about the changes and improvements made to way the company will do business in future. Unfortunately often things get blown out of proportion and some clients may not have heard the correct story. However, having said this don’t try and hide, or gloss over, past problems.

4.       When tenders or bids are submitted ensure that your price is competitive, ensure that you can deliver the project to the client’s satisfaction. In addition spell out in your bid how you will deliver the project taking care that the previous problems won’t reoccur. The client will be asking themselves the same questions even before they look at your bid, so make sure you give them answers that will make them feel confident about using you. Don’t just give them rhetoric, but tailor your answers to their specific project. Remind the client of similar previous projects you have done successfully.

5.       Should you be fortunate to be called into post tender meetings with the client make sure senior company management attends. Don’t be scared to bring up the past problems and address these and what will be different on this project.

Conclusion

If this fails to win your old clients back you may have to look for other markets, new clients, then, if all else fails consider rebranding the company completely.

But, what do you think? Have you experienced something similar, having to rebuild a company’s reputation?

Obviously it’s best to look after your construction company’s reputation and ensure all employees understand how vital it is to maintain the company’s reputation. It’s much easier than rebuilding a reputation that’s been broken.

Thank you for reading this article. I hope you found it interesting. Please like or share the article and add your comments and experiences.

Other similar articles by the author:

Will your construction project be completed on schedule?

Construction is a people business. Employ the right people.

Why should we take construction safety seriously?

(Written by Paul Netscher the author of the acclaimed books ‘Successful Construction Project Management: The Practical Guide’ and ‘Building a Successful Construction Company: The Practical Guide’. Both books are available in paperback and e-book from Amazon and other retail outlets. This article is adapted from information included in these books.)

© 2015 This article is not to be reproduced for commercial purposes without written permission from the author.