The Link Between Trust and Issue

Resolution

Building trust on Projects

Photography courtesy of Gregg Gargan

Leadership and Trust

“Trust is mandatory for optimization of a system. Without trust, there cannot be cooperation between people, teams,

departments or divisions. The object of a leader is to create an environment of trust.”

Edwards S. Deming

Whom Do You Trust ? In 2003,

– 34% of Americans believed that other people can be trusted

– 68% in Scandinavian countries (Denmark, Sweden and Norway)

David Halpern, British Sociologist

Speed of Trust, Stephen M.R. Covey

Whom do You Trust? In the United States

– 27% trust the government

– 22% trust the media

– 12% trust big companies

– 8% trust political parties

– Trends also down in healthcare and churches

2005 Harris poll

Speed of Trust, Stephen M.R. Covey

Whom do You Trust ? At the organizational level:

– Only 51% of employees have trust and confidence in senior management

– Only 36% of employees believe their leaders act with honesty and integrity

– 76% observed illegal or unethical conduct on the job

Speed of Trust, Stephen M.R. Covey

Whom do you Trust? Students who acknowledged that they cheated to improve

their odds of getting into graduate school:– Liberal arts students – 43%

– Education students – 52%

– Law and medical students – 63%

– Business students – 75%

Rutgers University Study

Speed of Trust, Stephen M.R. Covey

Economics of Trust High trust organizations outperform low trust organizations

by 286% on total dividend return to shareholders

Speed of Trust, Stephen M.R. Covey

Though difficult, in most cases, lost trust can be restored

Once lost, trust cannot be restored

Trust can be both created and destroyed

You either have trust or you don't

Trust is a function of both character (which includes integrity) and competence

Trust is built solely on integrity

Trust is hard, real and quantifiable. It affects both speed and cost

Trust is soft

REALITYMYTH

Trusting people is too risky Not trusting people is a greater risk

Myth versus Reality

Speed of Trust, Stephen M.R. Covey

Partnering Workshop? Not! Strategy? Yes!

– To assist teams in meeting project objectives

– A management tool providing input to senior and project leaders along with other “classic” project control measures

• Schedule

• Budget

• Safety

• Quality

• Team Dynamics

– To assist in decision making

Project and Partnering Success Has less to do with project delivery, management structure or

contracting method Has more to do with how the senior and project lead teams

establish and manage the business climate the team will operate within – Timely and fair resolution of issues will ultimately foster a trusting

environment

Partnering Team Evaluation

Partnering Team Evaluation

Name/Title: Date: (optional)

Team: Please evaluate the performance of the above team as it relates to the following areas. A score of 4 should be considered “meeting expectations.” (circle your response—any score of less than 4 requires a written comment).

1. Communication between partners

Poor Excellent

1 2 3 4 5

Comments:

2. Timely resolution of issues and conflicts

Poor Excellent

1 2 3 4 5

Comments:

3. Cooperation between partners

Poor Excellent

1 2 3 4 5

Comments:

4. Morale/enjoy working on project

Poor Excellent

1 2 3 4 5

Comments:

5. Trust among partners

Poor Excellent

1 2 3 4 5

Comments:

Return to: Return by: Observations: Ideas for Improvement:

Purpose of Team Evaluation Identify issues while they are still brush fires – head off forest

fires Monitor team performance throughout the life of the project Provide senior and project leaders with unfiltered input from

the project/field team from which they can develop strategies to optimize team performance and meet project objectives

Scale 5 – Exceeding expectations 4 – Meeting expectations 3 – Not quite meeting expectations 2 – Fundamental issues and problems exist 1 – Worst experience of your career

____________________________________________________ Anything scored < 4 requires a written comment This requirement presumes that there are some that will “rate

up” to a “4” to avoid writing comments

Evaluation Participants Project manager-level through task force/functional team-

levels on major projects Senior leaders (offsite above project managers) are not

included– Senior leaders should be placed in a role to look at results of

evaluations and then make objective decisions based on the input

Industry Results Profile 29 projects

– 13 wastewater– 4 highway– 6 rail works– 1 highway/rail works– 5 general building

Size: $9 million – $1.7 billion Project Delivery Method

– 23 Traditional Design – Bid/Build– 4 Design/Build– 2 CM/GC

Percent Complete: from Preliminary Design Phase to 100% complete Response Rate: 1003 of 1354 (74%)

Partnering Process All projects had ongoing follow-up processes in addition to

initial “kickoff” partnering efforts– All did Team Evaluations either on bi-monthly or quarterly basis

– 17 of 29 projects held quarterly “Executive Level” sessions separately and in addition to the Team Evaluation process

Results – all Projects Communication : 3.85 Timely Resolution of Issues: 3.60 Cooperation: 3.90 Morale: 3.91 Trust: 3.74 Average: 3.80 _______________________________________________ Highest Scoring Project: 4.53 Lowest Scoring Project: 2.89

Results by Project Delivery MethodDesign/Bid/Build Design/Build CM/GC

Number of Projects 23 4 2

Communication 3.86 3.82 3.74

Timely Resolution 3.63 3.52 3.45

Cooperation 3.92 3.83 3.85

Morale 3.91 3.89 3.87

Trust 3.75 3.65 3.77

Average 3.87 3.72 3.77

Highest Scoring 4.53 4.16 3.88

Lowest Scoring 2.89 3.28 3.65

Results by Project Size< $50 million $50–500 mm $500 mm–1

billion> $1 billion

Communication 4.14 3.76 3.66 3.94

Timely Resolution

4.01 3.48 3.38 3.69

Cooperation 4.30 3.78 3.68 3.97

Morale 4.21 3.81 3.74 4.02

Trust 4.10 3.63 3.53 3.85

Average 4.15 3.70 3.60 3.86

Highest Scoring 4.31 4.53 3.91 4.16

Lowest Scoring 3.87 2.69 3.24 3.34

Results by Percent CompletePre-Con 0–50% 51–85% 100%

Communication 3.57 3.30 3.80 3.95

Timely Resolution

3.21 3.12 3.52 3.71

Cooperation 3.62 3.29 3.86 4.00

Morale 3.65 3.36 3.87 4.00

Trust 3.42 3.07 3.73 3.84

Average 3.50 3.23 3.77 3.89

Highest Scoring 3.65 3.28 4.23 4.53

Lowest Scoring 3.34 3.17 3.24 2.69

Optimum CurvePartnering Evaluation Trend

Overall Averages, March 2003–January 2005

3.00

3.25

3.50

3.75

4.00

4.25

4.50

4.75

5.00

Mar-03

Apr-03

May-03

Jun-03

Jul-03

Aug-03

Sep-03

Oct-03

Nov-03

Dec-03

Jan-04

Feb-04

Mar-04

Apr-04

May-04

Jun-04

Jul-04

Aug-04

Sep-04

Oct-04

Nov-04

Dec-04

Jan-05

What Do The Scores Mean?Results to Date > 4.20: career project > 4.00: great project 3.75 – 4.00: good project 3.50 – 3.75: still has issues to be resolved, but still a good

project 3.25 – 3.50: major issues still unresolved < 3.25: project and senior leaders are unable to resolve major

issues – high probability of going to claim

Building Trust – Individually Talk straight Create transparency (versus hidden agendas) Clarify expectations Deliver results Right wrongs Practice accountability Keep commitments – do what you say you're going

to do Extend trust

Building Trust – Owners Have clear and reasonable objectives when selecting a project

delivery method Have a plan (process and $$$) to deal with unknowns,

differing site conditions and changes Provide reasonable $$$ authority to project level Be ready to make a deal:

– Do not defer to end of project

– Issues are not like fine wine – they do not get better with age

– Create solutions versus positions

Building Trust – Architects/Engineers Work with owner to establish an adequate budget for

construction administration Work with the team to establish

– Clear expectations for submissions

– Non-contractual targets for information turn-around, particularly on critical items (based on schedule) and total submissions

Be open to ideas from contractor that will preserve/enhance quality and create financial savings (materials or constructability)

Engage and work with the contractor– Develop big picture solutions

Building Trust – Contractors Develop big picture solution (s) that will help the owner save

time and money– Don’t just submit cost-added changes

– Develop cost savings and value-added changes as well

Be responsible for your own errors, particularly in regard to schedule– Recovery versus accelerate

– Don’t necessarily default to the “impact” game

Understand your responsibilities in QA/QC and do it

Conclusions (1 of 2)

A high degree of uncertainty exists on most projects– Constant variable conditions

Unresolved issues are the major area of uncertainty As major issues get resolved, trust and scores tend to improve The industry has tough evaluators – show me! Even on good or great projects, scores reach their peak only

as the project moves toward completion

Conclusions (2 of 2)

Issue Resolution and Trust are linked within the design and construction industry

Teams are optimized when team members are confident that their issues will be resolved in a timely and fair manner

Partnering processes (particularly on large projects) must initially be focused on organizational development and issue resolution protocol

Bill SpraginsFMI Corporation

Denver, Colorado

Phone: 303.377.4740

bspragins@fminet.com