One Needed Change is Partnering

By Ted Garrison

Partnering is not a nirvana. Instead, just like every business strategy, it's a choice. However, well-known business management consultant Peter Drucker hinted at its potential when he said: "The greatest change in corporate culture and the way business is being conducted may be the accelerated growth of relationships based on partnering." Of course, Drucker's quote isn't new. The idea of partnering has been around for a while.

Some in construction have utilized partnering, to varying degrees of success, for many years. And I recognize that many people in the construction industry think little of partnering. The problem is that much of what these people think of when they hear the term is not truly partnering. For example, a two-day seminar with no follow-through is not partnering.

While seminars can be beneficial because they can explain how the process works and everyone's role in it, the problem is that these seminars are usually only attended by project site personnel. The attendees come out of the seminar all charged up, but then when they call their office they get something like, "Never mind that, here's what I want you to do." Suddenly the partnering process is over and the project isn't even out of the ground.

The confrontational atmosphere within the construction is taking its toll, and change is needed. So it may be that "true partnering" is an idea whose time has come. I believe that it is not whether partnering is needed in the construction industry, but whether your company will choose to participate. True partnering is a culture shared by all stakeholders built on a relationship of trust for the mutual benefit of all the partnership's participants.

The construction industry is made up of five major groups: owner, general contractor/construction manager, subcontractors/vendors, design team members and the workers. Only when these groups work together can the industry reach its full potential and maximize the return for the entire group.

Partnering doesn't mean everyone can have everything they want. Instead it's about developing the fairest solution. In essence, it's about increasing the size of the pie, so there is more to divide among the stakeholders. This isn't a new concept. As Henry Ford said, "There is one rule for industrialists and that is: Make the best quality of goods possible at the lowest possible price, paying the highest wages possible."

Why partnering is important:

Edwards Deming, a noted business management consultant, has argued since the 1950s that working together to improve the systems is the only way to obtain significant improvement. Those that have followed his advice have seen the benefits, including lower costs and higher quality. It's time the construction industry begins to seriously focus on this concept and not just apply it in limited situations. In essence, the concept of partnering is all about working together to deliver greater value to all stakeholders.

When a contractor negotiates with a customer he is saying, in essence, "We can deliver greater value." Some of the noted benefits of partnering include:

• Increased profitability for all stakeholders
• Improved productivity
• Improved working relationships
• Improved communications
• Improved quality
• Less paperwork

The reality is the longer companies work together the greater the trust and the greater the potential benefits. Value is added from two basic sources:

• Focus on participant expertise: Negotiated work allows all members of the construction team to participate from the beginning. The benefit is the expertise of each participant can be utilized from the start. Often design decisions have negative impacts on construction activities. However, when the contractors are involved from the beginning they can eliminate costly delays in revising drawings at a later date or avoid costly errors. The team approach allows each member to provide input based upon their expertise throughout the process and therefore introduce many opportunities for cost savings and higher quality.
  
  
• Innovation: The second major benefit of partnering is innovation. For innovation to reach its full potential, there is a learning curve. The more complex the customer's requirements the longer the learning curve. For this reason the longer an innovative contractor works hand-in-hand with a customer the greater the value they can deliver. After all, it takes effort and money to develop solutions for the customer, but unless there is sufficient time to develop the solutions, as well as sufficient time for a reasonable payback for the effort, little true innovation will occur.

The next issue will start exploring the different partnering relationships.

Ted Garrison, president of Garrison Associates, is a consultant, author and speaker who works with businesses in the construction industry. He can be reached by email at Growing@TedGarrison.com.