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- Wiley
More About This Title Global Construction Success
English
A guide to effective corporate and project management in the construction industry with a focus on the role that people play in the process
Global Construction Success explores the importance that human dynamics play in risk management of construction projects. Every time a project is structured, designed and built, personal behaviours and inputs can either lead to success or be the cause of failure. With contributions from noted experts on the topic, the book offers insight into stakeholders’ reactions in a variety of situations, provides expert analyses of risk management and proposes potential solutions and recommendations in order to ensure effective construction management.
The book explores common causes of project failure, outlines the key factors of successful projects, shows how to implement Public Private Partnerships, explores the different stages of structuring projects and reveals what it takes to manage difficult client/contractor relationships. International case studies of major projects clearly illustrate how communications and relationships can lead to helpful solutions to commonly encountered challenges to achieve positive results. This new and updated edition:
- Offers a comprehensive review of the impact human dynamics play in the success or failure of construction projects
- Stresses the importance of the leadership of senior management
- Offers a chapter on managing and resolving conflicts
- Shows why the industry needs better risk management
- Includes new information for managing communications and relationships
- Explores new areas of technology that are being embraced by the construction industry
Written for construction industry senior management in both the corporate and government sectors, project management professionals, consultants and supply chain participants, Global Construction Success has been updated to include expanded material for minimizing risk and improving management quality and profitability when working with international construction projects.
English
Charles O’Neil has over 40 years of international experience in property development, steel fabrication, design and construction, and asset management. He specializes in Public Private Partnerships, risk management and dispute resolution and was Director of Asset Management for Bilfinger Berger Projects, Luxembourg, responsible for the design and construction, operational performance and risk management of more than 60 facilities in 8 countries.
English
Author's Notes xxi
Acknowledgements xxiii
Biographies xxv
Preface xxxiii
Why Have I Written this Book? xxxiii
Objectives xxxv
My Journey from the Australian Bush to International Construction xxxvi
Who Should Read this Book and Why? xxxix
Conclusion xxxix
1 Introduction 1
Ian Williams
1.1 Opening Remarks 1
1.2 Section A – The State of the Industry (Chapters 2–6) 2
1.3 Section B – People and Teamwork (Chapters 7–11) 2
1.4 Section C – The Right Framework – Forms of Contract, Business Models, and Public Private Partnerships (Chapters 12–15) 3
1.5 Section D – Management of Risk (Chapters 16–23) 3
1.6 Section E – Robust Processes – Corporate and Project Management (Chapters 24–27) 4
1.7 Section F – Emerging Conclusions (Chapter 28) 4
1.8 Final Note 4
Section A – The State of the Industry 5
2 Global Overview of the Construction Industry 7
2.1 Introduction – Globalisation Impacts on Construction 7
2.2 Construction Industry Cycles 7
2.3 Industry Trends – Business Models, Contract Types, Financing, Technology 8
2.4 Regional Trends – Middle East, Asia Pacific, Africa, the Americas, UK and Europe 9
2.5 Bad News and Its Consequences 11
2.6 The Good News – Significant Improvements in the Right Direction 13
2.7 Summary and Conclusions 15
3 Construction Consultants in the Global Market Place 19
Judy Adams
3.1 Introduction 19
3.2 Political Risk 19
3.3 Regional/Cultural Differences 20
3.4 Payment or Fee Recovery 21
3.5 Localisation 21
3.6 Failure to Attract or Retain Skilled People 21
3.7 Contractual Terms and Conditions 22
3.8 Ability to Deliver Across Major Projects/Programmes 22
3.9 Cyber Security 22
3.10 Contractor Failure 23
3.11 Design Liability 23
4 Common Causes of Project Failure 25
4.1 Introduction 25
4.2 High Profile ‘Problem Projects’ Since 2000 26
4.3 The 35 Common Causes 30
4.4 Project Leadership – How Bad Can It Get? 41
4.5 Lessons Learnt from Incompetent Site Management 43
4.6 Conclusion 44
5 The Use and Abuse of Construction Supply Chains 45
Professor Rudi Klein
5.1 Introduction 45
5.2 Construction: An Outsourced Industry 46
5.3 Adverse Economic Forces Bearing Down on the Supply Chain 47
5.4 Supply Chain Dysfunctionality 47
5.5 Addressing the Issues and Solutions 48
5.6 The Future 58
6 A Discussion on Preventing Corporate Failure: Learning from the UK Construction Crisis 59
Stephen Woodward and Nigel Brindley
6.1 A Call to Action’ 59
6.2 Lifting the General Level of Corporate Management 61
6.3 Improving Risk Management 64
6.4 Joint Recommendations by the Corporate Risk Manager and the Investment Banker 65
6.5 Conclusions 67
Section B – People and Teamwork 69
7 Obstacles to Senior Management and Board Success 71
7.1 Introduction 71
7.2 Groupthink and Team Selection 72
7.3 Training 73
7.4 Choosing the Wrong Strategy and/or Projects 74
7.5 Need for ‘Macro-Level’ Focus, with Effective Corporate Oversight (‘the Wider Picture’) 75
7.6 Effective Communication and Delegation 76
7.7 Summary 77
8 Structuring Successful Projects 79
8.1 Introduction 79
8.2 So What Happens on Successful Projects? What Are the Key Factors that Create Success? 79
8.3 The Different Activities and Responsibilities, from Concept to Completion of Construction 80
8.4 Checklist for Structuring Successful Projects 85
8.5 Summary 90
9 Understanding and Managing Difficult Client/Contractor Relationships 91
David Somerset
9.1 Introduction 91
9.2 Problems Posed by Difficult Clients 91
9.3 How to Manage Difficult Clients 92
9.4 Problems Posed by Difficult Contractors 95
9.5 Steps to Manage Difficult Contractors 96
9.6 Conclusion 97
10 Social Intelligence – The Critical Ingredient to Project Success 99
Tony Llewellyn
10.1 Introduction 99
10.2 Project Intelligence 100
10.3 Social Intelligence 100
10.4 Learning and Development 102
10.5 Building Cohesive Teams 103
10.6 Introducing a Specialist into Your Team 103
10.7 Coaching the Team 104
10.8 Managing Behavioural Risk 104
11 Practical Human Resources Considerations 107
11.1 The Changing Job Requirements in the Construction Industry – Government and Corporate 107
11.2 The Argument for Broader Based Training of Tomorrow’s Industry Leaders 108
11.3 What Makes a Good Leader in the Construction Industry – for Contractors, Government Departments and PPP Players? 108
11.4 Personnel Recruitment and Positioning – A Different Perspective 109
11.5 Leadership Considerations 110
11.6 The Inherent Risks of Decision Making for Survival 112
11.7 The Human Fallout from a Failed Project 113
11.8 Summary 114
Section C – The Right Framework – Forms of Contract, Business Models, and Public Private Partnerships 115
12 The Contract as the Primary Risk Management Tool 117
Rob Horne
12.1 Common understanding (or lack thereof) 118
12.2 Clarity 118
12.3 Knowledge transfer 119
12.4 Adaptability 119
12.5 Acceptance 119
12.6 Application 119
13 The New Engineering Contract (NEC) Interface with Early Warning Systems and Collaboration 129
Richard Bayfield
14 Development Contracting – An EfficientWay to Implement Major Projects 133
Jon Lyle
14.1 Introduction 133
14.2 Major Projects Are Unique 133
14.3 Commitment and Costs 134
14.4 The Tools for Successful Development Contracting 135
14.5 Conclusion 145
15 A Critical Review of PPPs and Recommendations for Improvement 147
15.1 Introduction 147
15.2 Proponents and Opponents 150
15.3 Project Viability and Necessary Due Diligence 153
15.4 Some Current Perspectives on the PPP Process 155
15.5 Efficient Structuring and Managing of PPPs 160
15.6 PPP Claims and Disputes 164
15.7 Summary of Key Factors for Success and Minimising Risk 165
Section D – Management of Risk 167
16 A Tale of Oil Rigs, Space Shots, and Dispute Boards: Human Factors in Risk Management 169
Dr Robert Gaitskell QC
16.1 Human Factors in Risk Management 169
16.2 The Challenger Disaster 169
16.3 Dispute Boards 171
16.4 Nuclear Fusion 173
16.5 The ITER Project 174
16.6 Conclusion 175
17 Effective Risk Management Processes 177
17.1 Introduction 177
17.2 Effects of Human Behaviour in Risk Management 177
17.3 Typical Project Risks 178
17.4 Keeping Risk Management Simple 180
17.5 Procedures to Eliminate, Mitigate, and Control Risks 183
17.6 Conclusions 187
18 Risk Management and its Relation to Success in the North American Context 189
John McArthur
18.1 Introduction 189
18.2 Relationship of Success to Risk Management 191
18.3 Planning for Success and Managing Risks 194
18.4 Go/No-Go Stage 194
18.5 Summary 196
18.6 Recent Projects: A Success and a Failure 197
19 Early Warning Systems (EWSs), the Missing Link 199
Edward Moore and Tony Llewellyn
19.1 Introduction 199
19.2 Look Outside of the Technical Bubble 199
19.3 Cultural Barriers 200
19.4 Learning to Value ‘Gut Feel’ 201
19.5 Case Study 202
19.6 Summary 204
20 Construction Risk Management – Technology to Manage Risk (ConTech) 205
Rob Horne
20.1 Introduction to Technology in Construction 205
20.2 What Do We Mean by ConTech? 206
20.3 ConTech as a Tool Not a Toy 209
20.4 Major Projects – Temporary Smart Cities 211
20.5 Smart City Principles 212
20.6 ‘Smart’ Commercial Management 213
20.7 Dehumanising Risk Management 214
20.8 Joining the Dots for Exponential Growth 218
20.9 Project Control and Risk Management –The Future 223
20.10 Conclusion 225
21 Intelligent Document Processes to Capture Data and Manage Risk and Compliance 227
Graham Thomson
21.1 Introduction 227
21.2 The Dimensions of IDF 229
22 Organisational Information Requirements for Successful BIM Implementation 233
Dr Noha Saleeb
22.1 Introduction 233
22.2 Leveraging Organisational Information Requirements for Business Success 234
22.3 Developing OIRs Using BIM 236
22.4 Conclusion 243
References 243
23 Examples of Successful Projects and how they Managed Risk 245
23.1 Introduction 245
23.2 People, People, People – London 2012 Olympic and Paralympic Games 245
Ian Williams
23.2.1 Governance 247
23.3 Managing Risk – Tunnels for Heathrow’s Terminal 5 (2001–2005) 249
Ian Williams
Acknowledgements 255
Bibliography 256
23.4 Cyber Design Development – Alder Hey Institute in the Park, UK 256
Stephen Warburton
23.5 The Importance of Clear Ownership and Leadership by the Senior Management of the Client and the Contractor 258
Charles O’Neil
Section E – Robust Processes – Corporate and Project Management 261
24 Planning and Programming Major Projects 263
Charles O’Neil and Rob Horne
24.1 The Foundations of Success 263
24.2 Monitoring ‘Progress versus Programme’ and ‘Cost-to-Complete versus Budget’ 265
24.3 Extensions of Time, Concurrency and Associated Costs 267
24.4 Ownership of Float 270
25 Managing and Resolving Conflict 275
David Richbell
25.1 Conflict Can Be Good 275
25.1.1 Different Truths 275
25.1.2 Difficult Conversations 275
25.2 Co-operation Versus Confrontation 276
25.3 We Are All Different 276
25.4 Fairness or Justice (or Both) 278
25.5 Relationships 278
25.6 The Move Towards Collaborative Working 279
25.7 Best Deals 279
25.8 Staged Resolution 279
25.9 Conclusion 282
26 Dispute Resolution – The Benefits and Risks of Alternative Methods 283
26.1 Introduction 283
26.2 Avoiding Formal Disputes Through Early Communications and Negotiations 283
26.3 Main Considerations of the Parties When They End Up in a Formal Dispute 285
26.4 What Do Commercial Clients Want Out of a Formal Dispute Process? 285
26.5 Working with Lawyers 286
26.6 Techniques for Negotiating Settlements 287
27 Peer Reviews and Independent Auditing of Construction Projects 291
Section F – Emerging Conclusions 295
28 Conclusions and Recommendations 297
28.1 Overview 297
28.2 Where Is the Global Industry Headed? 298
28.3 Key Observations and Recommended Actions 299
28.4 Final Thoughts 303
Appendix A 305
Index 307
English
Lord Andrew Adonis – Chair of the UK National Infrastructure Commission 2017
“Charles O’Neil and his co-authors have produced an impressive and important contribution to the construction industry that should be read by everyone involved in construction projects”.
_________________________________________________________________________________
Ian Rogers – Senior Legal Adviser, Arup
“This hard-hitting collection of essays reveals the real problems in the construction industry, identifying not just the symptoms and how they might be treated, but also tackling the underlying causes. People and governance are top of the list and until these are addressed, change will be merely superficial. It is a vitally important contribution to the debate over the future of a key global industry”.
_________________________________________________________________________________
Datuk Sundra Rajoo – Director Asian International Arbitration Centre (AIAC)
– Past President of the Chartered Institute of Arbitrators, U.K. (2016)
“This book is an exceptional collection of insight and wisdom from various experts across the global construction industry. It provides a 360-degree overview of the current state of international construction, including impacts of globalization, a detailed analysis of industry and regional trends in construction as well as the challenges faced by various sectors in the industry, making it relevant across the globe. This book is also written in simple and effective language, identifying the key areas of improvement within the industry and offering viable solutions for all stakeholders concerned. The author has also done a remarkable job in structuring the book in such a way that makes it thorough and comprehensive, which is a boon for all of us in the industry. I believe this book will be a useful reference for all stakeholders concerned with navigating the emerging issues and challenges of risk management that plagues this industry today”
_________________________________________________________________________________
Chris Blythe – CEO, The Chartered Institute of Building
“A great read with something for anyone wanting a successful construction industry. Construction is the art of getting ordinary people to do extraordinary things. Throughout the book, contributors show the best and worst behaviours that give the industry its extremes of reward and frustration. The wrong behaviours take the ordinary and produce the mediocre by repeating mistakes and not learning from them. Construction is too important as a driver of the global economy for the risks of failure to be as high as they are. This book offers an agenda for de-risking construction.”
__________________________________________________________________________________
Gerhard Bester – MD of CAPIC, a South-African owned, specialist consulting services firm in the infrastructure development, construction and engineering industries.
“Africa’s decision makers, both public and private, clients and contractors alike, should jump at the opportunity to acquire the benefit of hindsight from the industry in first world countries – Africa generally follows their infrastructure delivery mechanisms, contracting regimes and unfortunately, consequential flaws…Africa has some additional variables to make things more challenging, but we cannot afford to ignore the wisdom and guidance on the way forward if we are to achieve “Global Construction Success” as presented by Charles O’Neil and his co-authors in this aptly named book!”
_________________________________________________________________________________
Don Ward – CEO of Constructing Excellence, U.K
“So many Governments and industry stakeholders around the world are anxious to see construction sector reform for major improvement in delivery. So why doesn’t it happen faster? The insights in this book are hugely valuable to policy makers and industry leaders everywhere, with their focus on getting strong leadership and vision for projects, modernising the capability of people culture & behaviours in project teams, and aligning common processes and tools. Perhaps most crucial is the alignment of commercial arrangements throughout the supply chain.”
_______________________________________________________________________________
Matthew Bell – Senior Lecturer and Co-Director of Studies, Construction Law, Melbourne Law School
“Introducing this immensely useful book, Charles O’Neil writes that ‘there is no better experience than learning the hard way’. This is true. Charles and his colleagues have generously shared their experience on construction projects around the world so that the rest of us can recognise and steer away from the commercial, technical and – especially – human factors which cause so many projects to founder”.
___________________________________________________________________________
Nick Barrett – Editor of Construction Law Magazine, U.K.
“This book emphasising human factors and risk management in delivering successful construction projects comes at a potentially crucial turning point for the construction industry, with a new readiness to consider major changes to business models and processes evident following the Carillion collapse in the UK. The industry needs to read it”.
_________________________________________________________________________________
Mark Farmer – Author of The Construction Industry Review “Modernise or Die” 2016.
"I believe we stand at an unprecedented crossroads in the construction industry's evolution driven by a structural and long-term decline in skills and capability. This is no longer another false dawn driven by periodic discontent. The risks of continuing are now all consuming and include the increasingly destructive consequences of poor risk management and embedded conflict. The burgeoning technology led opportunity we are now presented with as our potential saviour will not be maximised though without embracing fundamentally different organisational, procurement and contractual models that drive process integration & common interest. This book is a very useful reference point using key lessons learned and pointing the way forward."
Lord Andrew Adonis – Chair of the UK National Infrastructure Commission 2017
“Charles O’Neil and his co-authors have produced an impressive and important contribution to the construction industry that should be read by everyone involved in construction projects”.
_________________________________________________________________________________
Ian Rogers – Senior Legal Adviser, Arup
“This hard-hitting collection of essays reveals the real problems in the construction industry, identifying not just the symptoms and how they might be treated, but also tackling the underlying causes. People and governance are top of the list and until these are addressed, change will be merely superficial. It is a vitally important contribution to the debate over the future of a key global industry”.
_________________________________________________________________________________
Datuk Sundra Rajoo – Director Asian International Arbitration Centre (AIAC)
– Past President of the Chartered Institute of Arbitrators, U.K. (2016)
“This book is an exceptional collection of insight and wisdom from various experts across the global construction industry. It provides a 360-degree overview of the current state of international construction, including impacts of globalization, a detailed analysis of industry and regional trends in construction as well as the challenges faced by various sectors in the industry, making it relevant across the globe. This book is also written in simple and effective language, identifying the key areas of improvement within the industry and offering viable solutions for all stakeholders concerned. The author has also done a remarkable job in structuring the book in such a way that makes it thorough and comprehensive, which is a boon for all of us in the industry. I believe this book will be a useful reference for all stakeholders concerned with navigating the emerging issues and challenges of risk management that plagues this industry today”
_________________________________________________________________________________
Chris Blythe – CEO, The Chartered Institute of Building
“A great read with something for anyone wanting a successful construction industry. Construction is the art of getting ordinary people to do extraordinary things. Throughout the book, contributors show the best and worst behaviours that give the industry its extremes of reward and frustration. The wrong behaviours take the ordinary and produce the mediocre by repeating mistakes and not learning from them. Construction is too important as a driver of the global economy for the risks of failure to be as high as they are. This book offers an agenda for de-risking construction.”
__________________________________________________________________________________
Gerhard Bester – MD of CAPIC, a South-African owned, specialist consulting services firm in the infrastructure development, construction and engineering industries.
“Africa’s decision makers, both public and private, clients and contractors alike, should jump at the opportunity to acquire the benefit of hindsight from the industry in first world countries – Africa generally follows their infrastructure delivery mechanisms, contracting regimes and unfortunately, consequential flaws…Africa has some additional variables to make things more challenging, but we cannot afford to ignore the wisdom and guidance on the way forward if we are to achieve “Global Construction Success” as presented by Charles O’Neil and his co-authors in this aptly named book!”
_________________________________________________________________________________
Don Ward – CEO of Constructing Excellence, U.K
“So many Governments and industry stakeholders around the world are anxious to see construction sector reform for major improvement in delivery. So why doesn’t it happen faster? The insights in this book are hugely valuable to policy makers and industry leaders everywhere, with their focus on getting strong leadership and vision for projects, modernising the capability of people culture & behaviours in project teams, and aligning common processes and tools. Perhaps most crucial is the alignment of commercial arrangements throughout the supply chain.”
_______________________________________________________________________________
Matthew Bell – Senior Lecturer and Co-Director of Studies, Construction Law, Melbourne Law School
“Introducing this immensely useful book, Charles O’Neil writes that ‘there is no better experience than learning the hard way’. This is true. Charles and his colleagues have generously shared their experience on construction projects around the world so that the rest of us can recognise and steer away from the commercial, technical and – especially – human factors which cause so many projects to founder”.
___________________________________________________________________________
Nick Barrett – Editor of Construction Law Magazine, U.K.
“This book emphasising human factors and risk management in delivering successful construction projects comes at a potentially crucial turning point for the construction industry, with a new readiness to consider major changes to business models and processes evident following the Carillion collapse in the UK. The industry needs to read it”.
_________________________________________________________________________________
Mark Farmer – Author of The Construction Industry Review “Modernise or Die” 2016.
"I believe we stand at an unprecedented crossroads in the construction industry's evolution driven by a structural and long-term decline in skills and capability. This is no longer another false dawn driven by periodic discontent. The risks of continuing are now all consuming and include the increasingly destructive consequences of poor risk management and embedded conflict. The burgeoning technology led opportunity we are now presented with as our potential saviour will not be maximised though without embracing fundamentally different organisational, procurement and contractual models that drive process integration & common interest. This book is a very useful reference point using key lessons learned and pointing the way forward."
