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STRATEGIES ARTICLES |
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Southeast
Construction Magazine: April 2005 Issue |
The Synergy of Collaboration
By Ted Garrison |
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Last month the author
examined the benefits of partnering. Here, he
distinguishes between “partnering” and “collaboration.”
Unfortunately, many in construction
have a very negative reaction to the idea of “partnering.”
I believe a major reason for this is that what people
call partnering in construction is anything but. Admittedly,
some people with this opinion may have had an experience
with partnering in which the process was executed poorly.
Of course, sometimes partnering was simply not the best
choice for contracting construction services.
However, the concept I would advocate
is “collaboration”—a term that is
really more inclusive than partnering. First, all partnering
is collaboration, but not all collaboration is partnering.
Here, I’ll emphasize what I call the “positive
impact derived from the synergy of collaboration.”
Partnering is a formal relationship.
Collaboration is simply the working together on a common
goal. In transactional relationships each party attempts
to maximize its benefit from the transaction, which
leads to adversarial relationships.
In contrast, collaboration is about
cooperation and trust. In a collaboration relationship
the various stakeholders work together for the benefit
of all parties. This is important, as relationships
are only sustainable over the long term if the stakeholders
create a win-win environment for everyone.
Transactional relationships focus on price. When
buyers focus on price the transaction becomes less profitable
for the provider. Worse, transactional relationships
don’t work for the buyer either because quality
declines along with the price. Unfortunately,
too many buyers that complain about poor quality are
still attempting to win by continuing to rely on adversarial
transaction relationships. Unfortunately, they
are doomed to failure.
Some contractors are forced to compete
on a low-bid basis. In these situations a full partnership
is unlikely, but that doesn’t mean that collaboration
can’t or shouldn’t be used. In essence,
collaboration is about working together to lower the
confrontation. Obviously, there are situation where
collaboration or even partnering make sense to everyone.
One example might be a buyer negotiating a design-build
contract because of a tight schedule
However, collaboration can work in the competitive-bid
market too. For example, the president of a road-building
contractor told me the following story. His company
bid on a highly competitive project and received the
contract by being the low bidder. At their bid price,
however, the job wasn’t going to be a very profitable.
Schedule was important to the municipality,
as it had included significant bonuses for early completion.
With this in mind, the president directed his people
to work with the municipality and do everything they
could do to maximize the bonus.
The result was they finished ahead
of schedule and earned a higher profit than was in the
bid without the bonus. Yet, the best was yet to come.
Other municipalities contacted the contractor to perform
design-build work on their future projects.
In essence, collaboration can be used
in all aspects of construction – not just
with the client. Everyone can work together to
create a more positive situation. This includes
contractors working with their employees, general contractors
working with their subs and vendors, and contractors
working with the design team. All of these relationships
offer opportunities for collaboration and improved profits.
The list of possible areas for collaboration
is almost endless. However, successful collaboration
is about eliminating waste, confrontation, and delivering
greater value through cooperation. It takes a
little innovation, but when it’s done right, a
company should be able to create a competitive advantage
that will result in increased profits.
The level of collaboration obviously
depends on the circumstances, but it should be clear
the greater the collaboration, the greater the potential
benefits for all stakeholders.
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