Routledge Handbook of Integrated Project Delivery 1138736686, 9781138736689

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ROUTLEDGE HANDBOOK OF INTEGRATED PROJECT DELIVERY

The concept of integrated project delivery (IPD) has evolved as a result of the need for highly expert teams of people to collaborate to deliver extremely complex projects, to manage expectations about delivery speed, changes in governance standards and to take advantage of and manage expectations raised by rapid advances in technology. All this demands effective change management. This is the first Handbook to contextualise and thematically explore the concept with an emphasis on rigorous practical and theoretical validation. The Handbook is divided into five sections, each with a focus on several interconnected themes including: •• •• •• •• •• ••

An introduction to IPD concepts. The foundational elements and characteristics of IPD. People, culture and collaboration as key ingredients to successful and effective IPD. Technology and process aspects of relational contracting forms such as IPD. New and relevant perspectives of IPD that have received scant attention to date. Aspects and emerging issues that are rarely consciously considered in traditional project delivery due to the commercial imperative that drives firms and client organisations.

The Handbook offers both discussions of these key themes, and also in-depth research into construction and other industry project procurement and delivery that spans decades. In addition, the Handbook presents ‘best’ and ‘better’ practice, but also includes insights into cutting-edge experimental developments in technology and practices where proof of concept is currently being developed into emerging practice. Contributing authors in this Handbook collaborate with the co-editors to draw together an integrated set of chapters that align to deliver a coherent narrative of the IPD concept. It is an invaluable reference for practitioners and academics alike, and useful as core course content for numerous degree programs of study and professional development courses. Derek H. T. Walker is Emeritus Professor, RMIT University, School of Property, Construction and Project Management in Melbourne Australia. He has been actively publishing from his research work in this area. His first book in this area, specifically in the project procurement and delivery field, had its focus on research results from an extensive longitudinal study of the

Australian National Museum project, which was a first for an Australian institutional building project alliance (Walker and Hampson, 2003). That book was followed by Procurement Systems – A Cross-Industry Project Management Perspective (Walker and Rowlinson, 2008a). In 2015 he co-authored Collaborative Project Procurement Arrangements (Walker and Lloyd-Walker, 2015), which reported on a global study of alliancing and related similar project delivery forms. He has also collaborated with others writing many book chapters, journal and conference papers. He received the 2018 International Project Management Association research excellence award for lifetime achievement in project management. Steve Rowlinson is Chair Professor (Construction Project Management) at the University of Hong Kong Faculty of Architecture. He has been coordinator of the CIB W092 working commission on Procurement Systems since its inception in 1990 and has co-organised numerous conferences and symposia in this capacity. He has also been co-author on a number of books in this field, for example the seminal text Procurement Systems – A Guide to Best Practice in Construction (Rowlinson and McDermott, 1999), Procurement Systems – A Cross-Industry Project Management Perspective (Walker and Rowlinson, 2008a) and more recently New Forms Of Procurement: PPP and Relational Contracting in the 21st Century (Jefferies and Rowlinson, 2016). He has co-authored many book chapters, journal and conference papers.

ROUTLEDGE HANDBOOK OF INTEGRATED PROJECT DELIVERY

Edited by Derek H. T. Walker and Steve Rowlinson

First published 2020 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 52 Vanderbilt Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business  2020 selection and editorial matter, Derek Walker and Steve Rowlinson; individual chapters, the contributors The right of Derek Walker and Steve Rowlinson to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Walker, Derek H. T., editor. | Rowlinson, Stephen M., editor. Title: Routledge handbook of integrated project delivery / [edited by] Derek Walker & Steve Rowlinson. Other titles: Handbook of integrated project delivery Description: First edition. | New York : Routledge, 2019. | Includes bibliographical references and index. Identifiers: LCCN 2019008710| ISBN 9781138736689 (hardback) | ISBN 9781315185774 (ebook) Subjects: LCSH: Building—Superintendence. | Project management. | Architects and engineers. | Teams in the workplace. | Construction industry—Management— Data processing. Classification: LCC TH438 .R6785 2019 | DDC 624.068/4—dc23 LC record available at https://lccn.loc.gov/2019008710 ISBN: 978-1-138-73668-9 (hbk) ISBN: 978-1-315-18577-4 (ebk) Typeset in Bembo by Swales & Willis Ltd, Exeter, Devon, UK

CONTENTS

Contributors viii Preface xii Acknowledgements xiv Abbreviations xv SECTION 1

1

  1 Introduction and context Derek H. T. Walker and Steve Rowlinson

3

  2 Characteristics of IPD: a Collaboration Framework overview Derek H. T. Walker and Beverley Lloyd-Walker

20

  3 The global state of play of IPD Derek H. T. Walker and Steve Rowlinson

41

SECTION 2

67

  4 Value from an IPD perspective Steve Rowlinson and Derek H. T. Walker

69

  5 The role of the client Steve Rowlinson and Derek H. T. Walker

84

  6 Thinking systemically to mobilise IPD capability Bronte van der Hoorn, Jonathan Whitty and Derek H. T. Walker

99

v

Contents

  7 Where is IPD coming from and where is it going to? Leins Wang and Steve Rowlinson

122

  8 The role of IPD in facilitating design thinking and creativity Derek H. T. Walker and Steve Rowlinson

142

  9 Foundational elements of the IPD Collaboration Framework Derek H. T. Walker and Beverley Lloyd-Walker

168

SECTION 3

195

10 IPD from a culture perspective Derek H. T. Walker and Steve Rowlinson

197

11 Knowledge, skills, attributes and experience (KSAE) for IPD-alliancing task motivation Derek Walker H. T. and Beverley Lloyd-Walker

219

12 People, careers and IPD human resource management Beverley Lloyd-Walker, Lynn Crawford, Erica French and Derek H. T. Walker

245

13 IPD from a participant trust and commitment perspective Peter Davis and Derek H. T. Walker

264

14 IPD from a stakeholder perspective Kirsi Aaltonen, Martina Huemann, Christof Kier, Pernille Eskerod and Derek H. T. Walker

288

15 Behavioural elements of the IPD Collaboration Framework Derek H. T. Walker and Beverley Lloyd-Walker

315

SECTION 4

345

16 The new role for emerging digital technology to facilitate IPD and improve collaboration: a disruptive innovation perspective Sidney Newton, Russel Lowe, Steve Rowlinson and Derek H. T. Walker 17 IPD from a Lean-supply-chain management perspective Derek H. T. Walker and Juri Matinheikki

vi

347

365

Contents

18 IPD: facilitating innovation diffusion Peter E. D. Love and Derek H. T. Walker

393

19 IPD governance implications Bjørn Andersen, Ole Jonny Klakegg and Derek H. T. Walker

417

20 Information management in the built environment Duzgun Agdas, Marc Miska, Shoeb Ahmed Memon, Steve Rowlinson and Derek H. T. Walker

439

21 Processes and means elements of the IPD Collaboration Framework Derek H. T. Walker and Beverley Lloyd-Walker

454

SECTION 5

483

22 Integrating capital project delivery: an activity theory-based approach Richard James Synott, Steve Rowlinson and Derek H. T. Walker

485

23 IPD from an ethics perspective Beverley Lloyd-Walker and Derek H. T. Walker

503

24 Design and construction for operability Brian Atkin and Steve Rowlinson

526

25 IPD and safety management: a productive combination Steve Rowlinson

543

26 IPD performance and incentive management Derek H. T. Walker and Steve Rowlinson

557

27 IPD and TOC development Derek H. T. Walker and Alan McCann

581

28 An IPD approach to disaster recovery Erica Mulowayi and Derek H. T. Walker

605

Index 627

vii

CONTRIBUTORS

We bring together in this book a team of subject matter experts who bring business, engineering and psychological insights into how their field of expertise relates to, and may be applied to, integrated project delivery (IPD). The following, in the book’s chapter sequence, provides a brief outline of their biographies. The co-editors actively engaged with co-authors in jointly writing chapters to maximise content relevance to IPD and to draw upon research in IPD that they could contribute. Other authors are co-authors on several chapters.

Chapter co-authors Beverley Lloyd-Walker PhD is a research fellow within the School of Property, Construction and Project Management, RMIT University, Melbourne. During the last few years her research has concentrated on the project-based Australian economy, new project procurement approaches, and careers in project management. Beverley’s interest in collaborative forms of project procurement led to her researching the range of forms used globally, and thus to her role in researching and writing the book Collaborative Project Procurement Arrangements (2015). Bronte van der Hoorn is a project management scholar with an interest in the ‘lived experience’ of project work. She draws on a variety of frameworks to examine work, including continental philosophy and complexity theory. Bronte’s research has been published in various international project management journals and book chapters. She continues to connect with industry through collaborative research projects. Jonathan Whitty is Associate Professor of Project Management at the University of Southern Queensland, Australia. Jon’s research with the Systemic Lessons Learned Knowledge Model has helped reveal the ‘humanism’ in the complex behaviour of organisational capability. He publishes in journals and textbooks, and collaborates with a flourishing group of university researchers. Leins B. Wang is a practitioner of IPD in China. He is Deputy GM of Jinggong Steel Groups’s Digital Subsidiary and is an expert in BIM-based Construction Project Management and BIM-based Digitisation in Project Management. He has been using and researching into viii

Contributors

BIM in the construction management area for several years, and is now in charge of the adoption of digital technologies and IPD in the life cycle of modular construction management. Lynn Crawford is Director of the Project Management Program at The University of Sydney. In 2014, she was made Honorary Fellow of the Association of Project Management (UK) and was awarded the Sir Monty Finniston Award for a lifetime of achievement in Project Management. Lynn is Life Fellow of the Australia Institute of Project Management (AIPM) and in 2011 was made an Honorary Fellow of the IPMA. Erica French PhD, MBus(Mgt), MPM(Eng), BBus(Mgt) is an Associate Professor at Queensland University of Technology where her research, teaching and consultation experience is in the area of women at work, including equality, inclusion and leadership in management and project management. She is an Associate Editor for the Equality, Diversity and Inclusion: An International Journal, and her current research includes exploring the changing career patterns of project managers. Peter Davis is Professor of Construction Management at the University of Newcastle, NSW, Australia. In a career spanning 26 years, Davis has managed several funded research projects and was awarded two Industry Engagement Professional Excellence in Building Awards from the Australian Institute of Building for general research and academic projects. To date, Davis has produced over 138 publications focusing on procurement and relationships associated with project delivery. Kirsi Aaltonen DTech, is Associate Professor of Project Management at University of Oulu, Finland, where she heads Project Business Research Team in the Industrial Engineering and Management Research Unit. Her current research interests are in the areas of stakeholder management in complex projects, integrated project deliveries and institutional change in projectbased industries. Martina Huemann is Professor at the WU Vienna University of Economics and Business where she heads the Project Management Group in the Department Strategy and Innovation and is the Academic Director of the Professional MBA Program: Project Management. She has published widely in the fields of Human Resource Management and Project Management. Since 2018 she serves as Editor-in-Chief of the International Journal of Project Management. Christof Kier is based in Vienna at the Project Management Group (PMG) in the Department for Strategy and Innovation at WU Vienna University of Economics and Business, and works as a tech project manager. His research focus is on Digitalisation and Datafication as a game changer in Project Stakeholder Management. Christof was awarded the 2019 PMI Thesis Research Grants with his research. Pernille Eskerod is, since 2015, full professor and senior researcher within management and organisational behaviour at the Department of Business and Management, Webster Vienna Private University. She is also a faculty member at the WU Executive Academy in Vienna, since 2008, teaching stakeholder engagement and supervising MBA theses. Dr Eskerod has authored more than 100 publications. Sidney Newton is a Chartered Quantity Surveyor and Professor of Building in the School of the Built Environment, University of Technology Sydney (UTS). Sidney is Director of the ix

Contributors

UTS School of Built Environment Centre for Informatics Research and Innovation (CiRi), and has founded several successful digital technology consultancy start-ups in the construction industry. His current focus is on the application of immersive technologies to safety training and the implementation of precinct-wide digital twins. Russell Lowe lectures in Architecture and Computational Design at the University of New South Wales. He coordinates the first-year architectural design studio, teaches in the Masters of Architecture graduation studio and runs electives in Advanced Virtual Reality. Russell’s research centres around the repurposing of computer gaming technology to engage with uses and concepts outside of the entertainment industry. Recently he co-founded a successful digital technology start-up to serve the construction industry. Juri Matinheikki is a post-doctoral researcher at Aalto University School of Business, Finland. His current research interest lies in understanding supply chain management and buyer–supplier relations in procurement of complex products and services. He has explicitly focused on the role of relational contracts, such as project alliances, as well as social mechanisms, such as shared organisational practices, norms and organisational culture, in governance of supplier relationships. Peter E. D. Love is a John Curtin Distinguished Professor of Infrastructure and Engineering Informatics at Curtin University. He is a Fellow of the Royal Institute of Chartered Surveyors, and a Chartered Building Professional. Peter was awarded the inaugural Scopus Young Australian Researcher of the Year Award in 2010 and later in 2012 was a nominee for Australian of the Year. Bjørn Andersen is a professor of quality and project management at the Norwegian University of Technology and Science. He has authored and co-authored around 25 books and numerous papers for international journals and conferences; in total more than 300 publications. Professor Andersen serves as Director of Project Norway and has since its inception been a member of the steering group of the Concept research program. Ole Jonny Klakegg MSc, PhD, is Professor in Project Management at NTNU, Department of Civil and Environmental Engineering. Through his 29-year career he has alternated between teaching and research at the university, including 15 years of working as a project management consultant and manager in private sector. He has worked in several periods at the Norwegian University of Science and Technology (NTNU) in Trondheim and different consultancy companies in Norway. Shoeb Ahmed Memon is an educationist, an Architect and a certified New Engineering Contract (NEC) professional. He teaches Business Process Management, Introduction to NEC and Construction Project Management courses at postgraduate and undergraduate level. He holds a Doctor of Philosophy in Construction Management from the Department of Real Estate and Construction, the University of Hong Kong. He has worked as a Conservation Architect with the Government of Sindh, Pakistan in the preservation of built heritage in Sindh. Duzgun Agdas is a Senior Lecturer of Construction Engineering and Management within the School of Civil Engineering and Built Environment at the Science and Engineering Faculty of Queensland University of Technology (QUT). He is a traditionally trained Civil Engineer with x

Contributors

particular research interests of infrastructure sustainability and disaster resilience. Recently, he formed the Data Analytics in the Built Environment (DABE) research group with Dr Miska. Marc Miska is a Senior Lecturer in the School of Civil Engineering and Built Environment at Queensland University of Technology (QUT), Brisbane, Queensland, Australia. His particular interests are data collection, management, and analysis to provide evidence-based solutions in all fields of civil engineering. His research is mainly applied in QUT’s well-established Transport Research Group. Richard James Synott MSc(IPD), MSc(Eng), BEng, CEng MICE, is an Information Manager with extensive experience in the design project management of capital works of varying sizes and complexity, including mega-projects in Asia and Europe. His research focuses on the use of activity theory to analyse and design complex socio-technical activity systems. Brian Atkin is Professor in the Division of Construction Management, Lund University, Sweden and Adjunct Professor in the School of Civil Engineering and Built Environment, Queensland University of Technology, Australia. Brian is the author of several national standards in facilities management and represents the British Standards Institution on the International Standards Organisation technical committee for facility management. Alan McCann graduated in Civil Engineering from Glasgow University in 1970, and for the next 16 years lived and worked on major projects in England, Scotland, Iran, Australia, Singapore and Malaysia, involving different procurement methods including construct-only, design and construct, construction management and turnkey. In 1986 Alan joined the John Holland Group, where he provided specialist planning, estimating, engineering and construction input on major projects in Australia and Asia. Alan retired from the John Holland Group in December 2017. Erica Mulowayi holds a PhD in Construction Management and Crisis/Emergency/Disaster Management. Her research interest revolves around the post-disaster recovery and reconstruction of infrastructure systems such as water, transport, energy and ICT. She gained her expertise in publishing in inter-disciplinary areas including project and construction management, as well as disaster and post-disaster recovery.

xi

PREFACE Integrated Project Delivery (IPD)

In 2008 we wrote the book Procurement Systems – a cross-industry project management perspective, published by Taylor & Francis. That was, and remained for many years, a leading-edge text on the integration of project delivery teams, including the client/project owner, and collaboration that is commonly referred to as IPD. However, times, context and technology change and in 2020 (with perfect 20–20 vision?) we see significant changes to the world of project delivery discussed in that book. This book, the Routledge Handbook of Integrated Project Delivery, addresses the changes over the recent decade in particular to provide the most current discourse on the rationale for, and conduct of, IPD. We do so from a global perspective. Indeed in Chapter 3, we explain not only what relational forms of IPD actually mean in (global) practice terms but also how the concept is applied at stateof-the-art levels in the United Kingdom (UK), North America, Australia and New Zealand, Southeast Asia and China, Europe and we also comment more broadly on IPD’s progress in other countries including in Africa and South America. This provides a truly global perspective that we have not seen, available in one publication, elsewhere in our research for this book. The two co-editors and our co-authors of this book live, work and research within a global context. As authors and editors we are in effect historians. We do not ‘invent’, and we are not gurus on IPD but we bring to the table our knowledge of a broad range of diverse theory to critically analyse and make sense of what we have researched and what expert IPD practitioners tell us. Our contribution is critical evaluation of IPD expert experiences and insights to help not just report on what is happening ‘out there in the IPD world’ but to help explain why and how this appears to occur in the ways we observe. We are a bit like the medieval monks of old that kept knowledge alive and accessible. That is our role. The advances that we see since our previous 2008 book are truly game changing. As we mention in several chapters, we are at the threshold of Industry 4.0 – the Fourth Industrial Revolution. Our book reflects that new way of thinking. Chapter 1 outlines the book’s purpose and structure in depth. This book has been developed in five sections. We anticipate that some readers will focus on the what is happening in IPD aspects to be aware of where Industry 4.0 is heading and to prepare themselves. Other readers may be mainly interested in the why and how aspects of collaboration through IPD. Section 2 focuses on foundational concepts of IPD; Section 3 concentrates on people and cultural-behavioural key ingredients of IPD and Section 4 takes a supporting and process-and-technology perspective of IPD. These three sections explain in xii

Preface

depth why and how IPD is following its current trajectory. Section 5 provides seven chapters that reinforce the depth of discussion of IPD and takes IPD application to another level of understanding the what, how and why questions. Throughout the book we posit the contention that true collaboration cannot take place without enabling digital technologies and without engaging the users and operators of the facility that is being provided. In this sense, we move beyond the concepts of traditional project management and see the delivery of the facility as part of the business life cycle. Hence, the upfront organisation of the delivery team is an essential prerequisite for IPD. We move the debate forward beyond the project management processes into the realm of logistics and sharing of information in a common environment. Throughout the book we cite current projects and businesses as examples and have no doubt that IPD will mature over the next decade into a powerful delivery model through further advances in digital technologies. We trust that we provide a stimulating and enlightening exposition of IPD, in one handbook that scholars and practitioners can understand at a deeper level than a ‘how-to’ book may have done, so that they can prepare themselves for this new industrial revolution and all that it demands of us. Writing this book has surprised us. What we have come to realise is that the integrated part of IPD is wider than just system process integration. It is about integrating people and their diversity of perspectives together with their intellect and cultures; one size does not fit all. Of course, this needs to be supported by enabling technologies and processes that help mould a united, integrated, focused team. It is also about people collaborating and their willingness to do so. This draws upon understanding culture and behaviours, skills and attributes as well as reflection on experience. We trust that readers of this book will enjoy and be stimulated by the concepts, practices and ideas presented in this book. Derek H. T. Walker (Melbourne, Australia) Steve Rowlinson (Hong Kong) February 22nd 2019

xiii

ACKNOWLEDGEMENTS

We acknowledge and thank all those who have supported us. Our families have been extraordinarily patient and forgiving of our focus on writing this book over the past two years. Our universities have provided us access to a phenomenal range and depth of literature through convenient electronic access to our university libraries so that we have been able to write this while travelling across the globe. We also have an amazingly valuable network of expert IPD practitioners that we draw upon and whose activities we have researched. We could not have written this book and presented cutting-edge analysis of IPD developments without our expert practitioner base. We could not have achieved our own integrated and collaborative book-writing project without the support of our research networks such as the CIB1, IRNOP (International Research Network on Organizing by Projects) and EPOS (Engineering Project Organisation Society) and a range of other research groups that we belong to.

xiv

ABBREVIATIONS

Abbreviations are provided for terms used frequently throughout this book. Not all abbreviated words appear here as those words may be used only within a few pages of first being used. 2D 3BL 3D AAA AC ADA ADF AE AEC AI AIM AIR ALT AM AMS AMT AOC AR ASM AU$ BAA BAU Baulog

two dimensional triple bottom line – financial, environmental and social bottom lines three dimensional Alliancing Association of Australasia abstract conceptualisation alliance development agreement Australian Defence Force active experimentation architect, engineering and construction artificial intelligence asset information model asset information requirements alliance leadership team – the high-level board of alliance participant sponsors alliance manager asset management system alliance management team – the operational-level participant executive team actual outturn cost Augmented Reality activity systems model Australian dollars British Airports Authority business as usual A joint venture company formed to manage the logistics on the Potzdammer Platz development in Berlin during the 1990s. The term Baulogistik literally means construction logistics but it refers to a range of services to manage the logistics of material delivery, storage as well as a range of related of construction management services for a general contractor or developer. xv

Abbreviations

BCA BIM BOO BOOT BV CAFM CAPEX CAVE CBD CCTV CDE CE CEO CDM CERA CHAT COBie CMS CoP CSCW CSF CSR CYA Cynefin framework D&C DB DBB DfMA DoL DT ECI EIR EOI EPC EPMC ESQ EWS FA FEP FM GBS GLOBE HCI HR HRM HVAC ICE

Building Construction Authority (Singapore) building information modelling build own operate build own operate transfer best value computer-aided facilities management capital expenditure computer-assisted virtual environment Central business district closed circuit television common data environment concrete experience chief executive officer Construction Design Management Canterbury Earthquake Recovery Authority Cultural history activity theory Construction Operations Building Information Exchange Compliance Management System Community of Practice computer supported cooperative work critical success factors corporate social responsibility cover your arse (behaviours) Developed by David Snowden: explains ranges of situational complicatedness, complexity or chaos (see the introduction to Cynefin: www.youtube.com/watch?v=N7oz366X0-8). design and construct Development Bureau (of Hong Kong) design-bid-build Design for Manufacture and Assembly division of labour design thinking early contractor involvement exchange information requirements expressions of interest engineering procurement contracting engineering, procurement, manufactory, construction Emergency Services Queensland external wall system framework agreement front end planning facilities management Green Building Systems Global Leadership and Organizational Behavior Effectiveness human–computer interaction human resource human resource management heating, ventilation and air conditioning integrated concurrent engineering xvi

Abbreviations

ICT IF IFOA II IK I-Lab IM IM Standards IPD IoT IPI IR IT JCC JCM JV KI KM km2 KPI KRA KSAE LD LDCC LDMG LPS LXRA LXRP m2 MC MC MCOS MEP MHURD MIC MPM MR MTM MTRC M-type NEC NGO NK NOP NZ ODA OGC

information computer technology intuition formation integrated form of agreement intuition interpretation integrated interpreted knowledge Innovation Laboratory information model ISO (International Standards Office) digitised Information Management integrated project delivery Internet of Things Integrated Project Insurance information requirements information technology joint coordination committee job characteristics model joint venture knowledge being institutionalised knowledge management square kilometres key performance indicator key results area knowledge, skills, attributes and experience learning by doing local disaster coordination centres local disaster management groups last planner system (Victorian Government) Level Crossing Authority (see URL https:// levelcrossings.vic.gov.au) (Victorian Government) Level Crossing Program square metres management contracting (Chapter 3) main contractor (Chapter 22) minimum condition of satisfaction mechanical, electrical, plumbing Ministry of Housing and Urban-Rural Development modular integrated construction Masters of Project Management mixed reality (experience – a mix of VR and AR and physical reality) Metro Trains Melbourne (metro) (see: www.metrotrains.com.au) Mass Transit Railway Corporation of Hong Kong M-type organisations are more task-oriented than people-to-people-communication-oriented new engineering contract nongovernment organisation networked knowledge non-owner participants in an alliance New Zealand Olympic Delivery Authority Office of Government Commerce xvii

Abbreviations

OHSW OIR OL OP OPEX ORP O-type P2E P2P PA PAA PC PC PE PEC PIM PIR PMBOK PMV PO POE POR PPP PS PSC PTV QA QAS QFRS QPS QRA RBP RC RFP RIBA RMB RO SA SCADA SCM SDMG SE SEB SECI cycle SES

occupational health, safety and well-being organisational information requirements organisational learning owner participant operating expenditure optimisation of component requirements O-type organisations have few job description constraints and boundaries and are more people-to-people communication oriented person-to-environment person-to-person Project alliance project alliance agreement or program alliance agreement (in the case of programs) psychological contract precast concrete (in Chapter 7 only) Project execution partially encased composite project information model project information requirements project management book of knowledge pre-manufactured value project owner post-occupancy evaluation project owner representative public private partnership prefabricated steel prefabricated steel and precast concrete integrated structural system Public Transport Victoria quality assurance Queensland Ambulance Service Queensland Fire and Rescue Service Queensland Police Service Queensland Reconstruction Authority relationship-based procurement collective reflection request for proposal Royal Institute of British Architects renminbi (which may also be used for the yuan) reflective observation program service alliance supervisory, control and data acquisition supply chain management state disaster management groups shared experience station entrance building Socialisation though sharing tacit knowledge, Externalisation through making tacit knowledge explicit, Combining tacit and explicit knowledge the Internalising that combined knowledge State Emergency Service xviii

Abbreviations

SCIRT SHM SMART SME SOE SQE SSC SyLLK T5 TOC TOTEX TQM TVD TVF model UK UN US USA VAGO VAM VfM VR VicRoads WW2 ZCloud

Stronger Christchurch Infrastructure Rebuild Team Structural Health Monitoring Specific, Measurable, Achievable, Relevant and Time-bound small to medium enterprises state owned enterprises Safety Quality and Environment specialist sub-contractor systematic lessons learned knowledge Terminal five Heathrow – the BAA Terminal five Heathrow contract agreement target outturn cost – the expected cost that a project will eventually reach total expenditure total quality management Target Value Design transformation-flow-value generation United Kingdom of Great Britain and Northern Ireland United Nations Unites States (of America implied) United States of America Victorian Auditor General Office values, attitudes and moods value for money virtual reality Victorian Road Authority World War Two ZCloud is a product developed to meet the urgent requirements of digital technology in the modular construction field

Note 1 CIB is the acronym of the abbreviated French (former) name: Conseil International du Bâtiment (in English this is: International Council for Building). In 1998, the abbreviation was kept but the full name changed to: International Council for Research and Innovation in Building and Construction.

xix

SECTION 1

Section 1 provides a three-chapter introduction to integrated project delivery (IPD). ••

••

••

Chapter 1 – Introduction and context: Walker and Rowlinson introduce this book in Chapter 1 by introducing the IPD concept in its more general form to frame the main themes that run through the book and notes the co-editors’ past contributions to this field. It also presents the structure of the book and outlines the content of each chapter. Chapter 2 – Characteristics of IPD: a Collaboration Framework overview: Chapter 2, by Walker and Lloyd-Walker, provides an IPD overview and briefly explains a Collaboration Framework based on research that was specifically undertaken into advanced forms of IPD and how it was applied to provide a way of understanding the characteristics of various forms of IPD. Details on that framework will be presented in the other Chapters 9, 15 and 21. Chapter 3 – The global state of play of IPD: Chapter 3, by Walker and Rowlinson, provides a ‘state of play’ of IPD forms as they are globally practised. It has a focus on the UK, North America, Australasia, Europe, and Hong Kong and China and also comments on other countries. The industry sector focus concentrates on social and public utility infrastructure projects which tend to be complex and require deep levels of collaboration and system/ process integration.

1 INTRODUCTION AND CONTEXT Derek H. T. Walker and Steve Rowlinson

Introduction This chapter introduces the reader to the Routledge Handbook of Integrated Project Delivery and to the chapter’s aims and scope within the broader field of procurement. It is important for us to first define what we mean by integrated project delivery (IPD) and to differentiate it from non-IPD project delivery arrangements. The first section introduces terms, concepts and their meaning as interpreted in this handbook. It is also relevant to readers so that they may be acquainted with the background and track record in this field of the co-editors; therefore, this section also briefly explains how their background adds value to the contribution made by this book. We then briefly outline the structure and logic of the book and conclude with a chapter summary. This book is marketed in both hard copy and e-book form. We anticipate that readers will subscribe (most likely through a library service) to initially access specific chapters as clusters of chapters that may cover a general course of study or may form the basis for units of study within specific courses forming a degree program. Chapters are logically linked and we endeavour to trace the path that forms coherence between chapters. Throughout the book we draw attention to the reader of cross-links to other chapters that may discuss a particular concept from a perspective in tune with that chapter or may be of interest to readers in gaining a broader appreciation of a topic. We trust that this book chapter-structure prompts readers to select and read chapters to pursue their interest and to enhance their understanding of this emerging field of IPD study and practice. It is not necessary to read each chapter in any particular order, though the book is structured to flow with its present logic. The co-editors also co-authored chapters with other subject matter experts in this field. This is intended to add coherence to the entire handbook rather than the book being a collection of topics bundled together for convenience into a handbook.

Why collaborate? What is wrong with traditional competitive project delivery approaches? This handbook is based on the assumption that collaboration under many circumstances is more effective in delivering benefit and value than traditional forms of competitive project delivery. A great deal of literature has documented research into critical project success (for a comprehensive 3

Derek Walker and Steve Rowlinson

review see Müller and Jugdev, 2012) and failure factors, though the basis and rationale for such judgements about what failure may mean has been critically examined (Sage, Dainty and Brookes, 2014). Recently, Rolstadås, Tommelein, Schiefloe and Ballard (2014) questioned the value of studying critical success factors (CSFs) in isolation from the management approach that was taken. They argue that this approach provides a more insightful view of how success or failure may be influenced by adopting an adaptive versus a prescriptive project management approach, based on three in-depth case studies. This elevates the debate about project success or failure resulting from a mechanistic list of factors to one that has its focus on how projects are managed and further extends the focus of study of success processes undertaken by, for example, Zwikael and colleagues (Zwikael and Globerson, 2006; Zwikael and Smyrk, 2012). One key feature still not widely appreciated in the debate about what triggers success or failure is the degree of project complexity that poses challenges to the management of projects. Much has been written about the impact of complexity on how projects should be best managed and current thinking suggests that the challenges of dealing with project chaotic or complex situations (for more detail about complexity readers should refer to Kurtz and Snowden, 2003; Snowden and Boone, 2007) that no single or isolated groups of project delivery team parties can effectively envisage and understand the scope, scale and complexity they face by themselves. Current research supports the view that in these project situations collaboration presents a greater chance of success and avoiding failure than traditional forms of project delivery (Davis and Love, 2011; Walker and Lloyd-Walker, 2014;2015). Research undertaken through in-depth interviews with 50 subject matter experts (34 senior project delivery team members and 16 academic experts in collaborative forms of project delivery) from Australia, Europe and the United States of America with the objective to gather insights about various features and characteristics of alliances revealed seven distinct motivations to undertake IPD (Walker and Lloyd-Walker, 2015;2016). Identified motivations cited by Walker and Lloyd-Walker (2016) are illustrated in Table 1.1. Two extreme anchor points were identified by Walker and Lloyd-Walker (2016) to enable the degree of motivation to collaborate. Low levels would be related to a hostile environment for collaboration. This may be, for example, due to lack of conviction of project participants in the value of collaboration within this project’s context. Alternatively, it may be due to institutional imperatives that value strict competitive tension above collaboratively seeking win–win outcome solutions. High levels would relate to the procurement choice solution being driven by the acceptance of project participants of the logic of a clear advantage being gained by adopting a focus on a supportive and collaborative approach to delivering benefits that align with the values of participants.

They proposed that an assessment of the degree of motivation and context to collaborate could be based on an overriding sense of one or more sub-elements (best value through to unknown risks) that overwhelmingly influence a decision to collaborate in an IPD arrangement based on a rated assessment somewhere between 1 (low) and 5 (high). We argue, therefore, that for complex and chaotic project types an adaptive form of project management is appropriate and that this requires collaboration between various project teams through IPD such as the project owner team, the design teams the delivery team and facility 4

Table 1.1  Identified motivations to collaborate in an IPD form of contractual arrangement Motivation

Explanation

1 – Best value

IPD forms often place greater effort and emphasis upon ensuring the purpose of the project is clear. Greater consideration is placed on coherence in strategy, on supporting sustainability, and on creating a ‘big picture’ view of the project value outcome, increasingly incorporating social responsibility and triple bottom line (3BL1) considerations. Even financial bottom-line-focussed business managers have accepted that a focus on cost without consideration of value is restricting and delivers sub-optimal outcomes (Porter and Kramer, 2011). Emergency situations and recovering from a crisis or disaster require swift responses in an environment where little may be known about the scope and scale of recovery works. A series of such situations is well documented in the literature (Waugh and Streib, 2006; Weick and Sutcliffe, 2007) and more recently by Wearne and White-Hunt (2014) in their book on managing the urgent and unexpected. Here the key objective is to start recovery work very quickly while at the same time providing sufficient resilience to enable rapid changes in direction and/ or emphasis. This requires deep collaboration to ensure agility, responsiveness and reflexivity. An experimentation strategy is needed when developing innovation and building new competences. Sometimes a project is triggered by the need to experiment. Brady and Davies (2004) class projects whose prime purpose is co-learning and exploration as ‘vanguard’ projects. These projects may be designed to develop completely new standalone outcomes, be part of a ramping-up of a learning curve to move to a more production-line approach for new standard-type projects or used to pilot new products, assemblies, systems or procedures as was the case on the Terminal 5 Heathrow project (Doherty, 2008). In highly buoyant economic times, government agencies and other highly constrained (employment levels and conditions) organisations may engage in IPD to offer opportunities to upskill and retain key employees. In less buoyant economic times they may feel that they are in a strong position to demand more of those delivering projects. The business boom and bust cycle, and the long lead time required to prepare staff capabilities for involvement in complex project delivery means that, for government authorities, agencies and many large bureaucratic project owners (POs), retaining key staff and accessing expert temporary staff can present a significant challenge (Gardner, 2002; Martin and Schmidt, 2010). The relational rationale implies a perceived need to create, nurture and maintain a form of a relationship, though the extent of commitment may vary. Some choices may be based upon negative past experiences to overcome problems caused, or at least exacerbated, by the chosen project delivery form. Other choices are based on positive past experience with use of a specific form of procurement that worked well within that context.

2 – Emergency recovery

3 – Experimental

4 – Competitive resource availability environment

5 – Relational rationale

(continued)

Derek Walker and Steve Rowlinson Table 1.1  (continued) Motivation

Explanation

6 – Known risks

Uncertainty and risk are acknowledged as present within all projects, to varying degrees, with some projects experiencing high levels of uncertainty that may also be difficult to quantify (Atkinson, Crawford and Ward, 2006). This, Atkinson, et al. (2006, p688), acknowledge requires “management flexibility and tolerance of vagueness.” Typically, on highly complicated projects dealing with known unknown risks, the PO does not have sufficient knowledge about potential solutions to adequately frame their brief or define requirements. They are aware of what they don’t know, and they are also aware of what other parties do not know. Collaboration, in this context, allows consideration of a wider range of potential solutions and a richer conversation about how to achieve the project goals. Dealing with unknown risks (unknown-known and unknownunknown risks) poses a particular challenge to traditional and low-level IPD forms because high levels of specification inhibit performance through encouraging defensive routines and associated high levels of transaction cost. In this hyper-uncertain and ambiguous context, the PO and project delivery management team members need a system that allows rapid flexibility to adapt to emerging realities with high level collaboration to facilitate maximising access to relevant knowledge, skills, attitudes and experience to resolve uncertainty. In this situation, all parties know that there are risks out there that they do not know enough about to identify, plan for, and deal with. Sourcing expert advice, through an IPD form, is necessary for complex or chaotic situations when cause and effect loops are disjointed but where patterns may be discerned (Kurtz and Snowden, 2003; Snowden and Boone, 2007).

7 – Unknown risks

management teams so that a wider view of problems and opportunities may be appreciated and explored. IPD provides three perspectives to be applied to project delivery challenges that are superior to the limited and disjointed perspectives applied in traditional project delivery forms. This book focusses on IPD within the complex project environment and we do not propose that IPD is a universally ‘best’ approach, rather we argue that it is an appropriate response to the challenges of complex project delivery.

Explaining the integrated project delivery (IPD) concept IPD is a recently developed concept within the project delivery context. In the USA the following definition is offered: Integrated Project Delivery (IPD) is a project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste, and maximize efficiency through all phases of design, fabrication, and construction. (American Institute of Architects – AIA California Council, 2007, cover page 2) 6

Introduction and context

According to interviews conducted with influential US experts in this area for a research study in various forms of relationship-based procurement (Walker and Lloyd-Walker, 2015) the North American IPD context has its roots in the Australasian form of alliancing. This view is supported by Lahdenperä (2012) who traced the origins of partnering, alliancing and other forms of relationship-based project delivery. Alliancing was more recently adapted in the USA to be known as IPD or the Integrated Form of Agreement (IFOA) (Ashcraft, 2010; NASF et al., 2010; Heidemann and Gehbauer, 2011). A definition of alliancing is succinctly presented by the (Department of Infrastructure and Transport, 2011, p9) as follows: Alliancing is a method of procuring (and sometimes managing) major capital assets, where a state agency (the Owner) works collaboratively with private sector parties (NonOwner Participants or NOPs). All parties are required to work together in good faith, acting with integrity and making best-for-project decisions. Working as an integrated, collaborative team, they make unanimous decisions on all key project delivery issues. Alliance agreements are premised on joint management of risk for project delivery. All parties jointly manage that risk within the terms of an ‘alliance agreement’, and share the outcomes of the project (however, the financial outcomes are not always shared equally between the Owner and the NOPs). The Department of Infrastructure and Transport definition is clearly taken from a public sector perspective (Department of Treasury and Finance Victoria, 2010, p9) while the USA IPD definition clearly shares the same core concept but is mostly applied with the commercial construction sector. Other very similar approaches sharing some similar IPD characteristics will be elaborated upon in Chapter 2. Throughout this book we refer to IPD as a generic term embracing several project delivery approaches in which there is intense collaboration between three and often four main categories of project parties (see examples of this in other chapters relating to the Level Crossing Removal Authority (LXRA); in Chapter 17, for example). In effect these parties form a triad or quadrad entity acting as a single integrated team comprising: 1 The project owner (PO) often through the agency of a project owner participant (OP) representative; 2 The design team consortium usually in the construction and engineering infrastructure context this is a joint venture type of arrangement between several specialist designers; 3 The project delivery team which may comprise in the construction and engineering infrastructure context as one or several main general contractors in a joint venture type of arrangement often in conjunction with one or more specialist sub-contractor; and 4 Representatives of the facility operational management team who have deep knowledge relating to how the facility might operate in practice and may have useful suggestions relating to operational issues including permit requirements and potentially changing standards. Ten examples of the main difference between this form of project delivery and other forms of project delivery can be summarised in Table 1.2. There are many other differences between IPD and non-IPD forms of project delivery and these will be explored later in more depth in this book. The above ten major differences, however, serve to provide a taste of what differs between the more intense collaborative forms and those non-IPD forms that fall short, often by design and intent, of the IPD ideal state. As we will see later, IPD requires particular strategic intent and motivation that is not appropriate for all types of project. 7

The triad or quadrad of OP and non-owner participants (NOPs) usually share a ‘best-for-project’ mindset as a consequence of their intimate collaboration as a single ‘one-team’ entity. The project owner pays for all direct project delivery costs including the management and supervision administration costs. NOPs tender a profit margin or fee structure for undertaking the project and this sum is placed ‘at risk’ and adjusted subject to a negotiated painshare and gain-sharing incentive agreement that is based on the final project outcome.

The project delivery cost is developed as a target outturn cost (TOC) based upon the estimated total design and delivery costs developed by all alliance participants. An external independent cost adviser checks that the TOC is reasonable and credible. The PO may seek this through negotiations with a single NOP team or through a cost-competitive TOC process with (usually) two competing NOP syndicates. The TOC becomes a budgeting device that allows for flexibility in final design realisation. Design scope and details changes are easily accommodated to fit within the TOC and so few if any change orders are issued.

 2

 5

 6

 4

 3

The project owner is integrated with the design and delivery teams, and on occasions the facilities operator team, to form a ‘one-team’ entity. Usually this involves intense collaboration and co-development of design using building information modelling (BIM).

 1

IPD form characteristics

Table 1.2  Main differences between IPD and non-IPD project delivery forms

The project owner is segregated from the design and delivery teams. The design and delivery teams may be integrated in a dyad type of arrangement or separate but they do not form a triad arrangement with the project owner. The operator is rarely consulted or engaged during the design or delivery phases. Each participant usually does their best to support a ‘best-for-project’ outcome subject to the profit and performance expectations of their home organisation. The project owner receives tenders and negotiates an agreed cost outcome for the project design and delivery costs. NOPs tender a profit margin or fee structure for undertaking the project as part of their agreed contract for their part of the project work. There may, or may not, be an additional negotiated painshare and gain-sharing incentive agreement based on each NOP’s part of the project work. NOPs individually develop the estimated project delivery costs for their part of the work. The PO usually employs an independent cost adviser checks that the final contract cost is reasonable and credible. Tenders for the design and delivery of the project are usually undertaken on a competitive basis. Contracts define scope and contract variation change orders with negotiation required to accommodate any POR authorised change requests. This leads to rigidity in design post-contract and significant transaction cost and management energy.

Non-IPD form characteristics

The triad or quadrad of OP and NOPs intimately share and exchange knowledge and their assumptions about the project in developing the TOC. This broad perspective taking process facilitates a more accurate assessment of risk and uncertainty and usually results in a more accurate estimate of the final costs. The external independent cost adviser also checks that the TOC is reasonable and credible providing additional insights. OP and NOPs joint decision-making leads to consensus on major issues and a no-blame culture. Alliances, as an IPD example, have a no-litigation clause except when evidenced by criminal conduct or gross incompetence. The performance focus for IPD is often wider than the ‘iron triangle’ cost, time quality criteria. Usually key results areas (KRAs) focus on stakeholder satisfaction with many alliances requiring social and environmental ‘publicgood’ outcomes.

 8

10

 9

The actual outturn cost (AOC) usually ends up close to the TOC with the PO sharing gains for an AOC cost under the TOC with NOPs sharing any gain in addition to their ‘at risk’ agreed profit. If the AOC is in excess of the TOC then the difference is subject to the painshare agreement with the NOP’s ‘at risk’ agreed profit being reduced according to the agreement formula, however, the painshare for the NOPs is usually capped at a zero profit level.

 7

The AOC is often in excess of the initial contract cost with differences being due to contract change orders authorised by the OP. The PO and NOPs are responsible for their own costs and anticipated profit margins. The PO loses out on the design and construction team volunteering ways to contain extra costs and the contractor absorbs any real losses within their profit margin or by incurring a loss. Authorised contract change orders often contain greater profit margins than would be the case for the work if included in the original tender. Each party to the project shares only knowledge and perceptions on assumptions about the project that is relevant to the bidding process. There is no expectation that NOPs or the OP will volunteer unsolicited knowledge, information or insights about the project. Knowledge about facility operational issues such as likely changes in standards, technology or management practices is not sought. Fragmented decision-making based on NOPs’ individual perceptions and interests often leads to a blame-and-claim culture. Project disputes frequently lead to post-project litigation and high dispute transaction costs. The performance focus for non-IPD is often confined to the ‘iron triangle’ cost, time quality criteria. Usually KRAs focus on shareholder satisfaction.

Derek Walker and Steve Rowlinson

About the co-editors This book reflects current best practice in IPD. It is therefore useful for readers to be aware of the expertise that the co-editors bring to this book. Both have had a long association with the field of project procurement and delivery. Steve Rowlinson has been coordinator of the CIB W092 working commission on procurement systems since its inception in 1990 and has co-organised numerous conferences and symposia in this capacity. He has also been coauthor on a number of books in this field, for example the seminal text Procurement Systems – A Guide to Best Practice in Construction (Rowlinson and McDermott, 1999), Procurement Systems – A Cross-Industry Project Management Perspective (Walker and Rowlinson, 2008) and more recently New Forms of Procurement: PPP and Relational Contracting in the 21st Century (Jefferies and Rowlinson, 2016). He has co-authored many book chapters, journal and conference papers. Derek Walker has been actively publishing from his research work in this area. His first book in this area, specifically in the project procurement and delivery field, had its focus on research results from an extensive longitudinal study of the Australian National Museum project which was a first for an Australian institutional building project alliance (Walker and Hampson, 2003). That book was followed by Procurement Systems – A Cross-Industry Project Management Perspective (Walker and Rowlinson, 2008). In 2015 he co-authored Collaborative Project Procurement Arrangements (Walker and Lloyd-Walker, 2015) that reported on a global study of alliancing and related similar project delivery forms. He has also collaborated with others writing many book chapters, journal and conference papers. In 2018 he received the 2018 International Project Management Association research excellence lifetime achievement in project management award. The value that both these co-editors bring to this book includes their research insights gained over several decades, gleaned from literally hundreds of senior practitioner subject matter experts as well as their collaboration with many global leading academics in this and related fields. The IPD field has been developing and evolving over what is now 25 years since Steve Rowlinson took on the role of coordinator of the CIB W092 working commission on Procurement Systems. According to the CIB’s home website (www.cibworld.nl/site/about_cib/index.html, accessed 2nd December 2016): the CIB is the acronym of the abbreviated French (former) name: ‘Conseil International du Bâtiment’ (in English this is: International Council for Building). In the course of 1998, the abbreviation has been kept but the full name changed into: INTERNATIONAL COUNCIL FOR RESEARCH AND INNOVATION IN BUILDING AND CONSTRUCTION. CIB was established in 1953 as an Association whose objectives were to stimulate and facilitate international cooperation and information exchange between governmental research institutes in the building and construction sector, with an emphasis on those institutes engaged in technical fields of research. One interesting development that has occurred over the past 25+ years since W092’s establishment as a CIB working commission is that the project delivery mindset has changed from procurement as a somewhat isolated and fragmented ‘product-centric’ part of the project delivery process to emerge as one taking a complex product and service systems integrated delivery mechanism perspective. This paradigm shift has emerged through significant insights gained

10

Introduction and context

from research and literature focussed on large-scale projects and innovation studies on megaprojects (Brady, Davies and Gann, 2005; Davies, Hobday and Prencipe, 2005). This has led to a far more nuanced view of procurement’s role in systems integration and project delivery. Some of the more exciting examples of work arise out of efforts to better understand how innovation in construction and infrastructure engineering projects (or rather programs of project work) is encouraged, maintained and diffused. Examples of this work have recently been reported upon on such megaprojects as Heathrow’s Terminal 5 (T5), Crossrail, The 2012 London Olympics, and the Thames Tideway Tunnel (Davies, MacAulay, DeBarro and Thurston, 2014; Davies and Mackenzie, 2014; DeBarro, MacAulay, Davies, Wolstenholme, Gann and Pelton, 2015; Dodgson, Gann, MacAulay and Davies, 2015). Central to the paradigm shift, from procurement of a ‘product’ to facilitating ‘value’ through complex product and service systems, is the primacy of IPD collaboration of teams with a ‘value co-creation’ mindset. Much of the more interesting theory and research findings that this book reports upon relates to how value is delivered through IPD. In recent years we have both been asked to update Procurement Systems – A Cross-Industry Project Management Perspective (Walker and Rowlinson, 2008) but as each year passed more new and interesting research work and practitioner experimentation and innovation emerged from our network of colleagues’ research in this field. We have also attended and presented at many conferences since publication of that 2008 book and have had the opportunity to collaborate with others on IPD research projects and so we are in a position to consolidate a truly global view of how this field is being shaped and how it is being practised on complex projects, often megaprojects, but also on complex projects that range from €30 million to several hundred million euro. We are in a position to draw together a unique group of collaborators as contributors to this book; each has a rich stream of wisdom to impart based on reflection and sense-making that links theory to practice and theory in practice. Both Derek Walker and Steve Rowlinson are professors with solid practice experience deepened through research with reflective practitioners engaged on highly complex projects and so this Routledge Handbook of Integrated Project Delivery represents a valuable repository of insights and reflections about IPD theory and practice.

About the book The book is structured in five sections with associated chapters. The aim of the handbook is to provide readers with 20–20 vision, a state-of-the-art book that reflects the project delivery practices which we believe will be substantially considered as demonstrating best practice for delivering complex projects in the first quarter of this 21st century. The book structure reflects the more recent integration of fields of literature that in the 1990s were either considered marginal to the assumed product and operational logic of that time or were not considered as relevant. More recently, IPD has embraced constructs and theories derived from innovation diffusion and organisational learning, culture and organisational behaviour, governance and governmentality, institutional theory, stakeholder engagement, ethics, and strategy and decision-making theory. This greater emphasis on human factors and institutional factors that influence how projects are delivered has helped to enrich and deepen our understanding of how projects are actually delivered. It casts a bright light on what business and human relationship processes, motivation, and the ‘nitty-gritty’ or ‘lived experience’ influences the operational aspects of delivering projects and it also helps explain how these influences impact ‘the way things are done’. Perhaps more importantly, the book illustrates how things could be more effectively done!

11

Derek Walker and Steve Rowlinson

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Chapter 1 – Introduction and context: Walker and Rowlinson introduce this book in Chapter 1 by introducing the IPD concept in its more general form to frame the main themes that run through the book and notes the co-editors’ past contributions to this field. It also presents the structure of the book and outlines the content of each chapter. Chapter 2 – Characteristics of IPD: a Collaboration Framework overview: Chapter 2, by Walker and Lloyd-Walker, provides an IPD overview and briefly explains a Collaboration Framework based on research that was specifically undertaken into advanced forms of IPD and how it was applied to provide a way of understanding the characteristics of various forms of IPD. Details on that framework will be presented in the other Chapters 9, 15 and 21. Chapter 3 – The global state of play of IPD: Chapter 3, by Walker and Rowlinson, provides a ‘state of play’ of IPD forms as they are globally practised. It has a focus on the UK, North America, Australasia, Europe, and Hong Kong and China and also comments on other countries. The industry sector focus concentrates on social and public utility infrastructure projects which tend to be complex and require deep levels of collaboration and system/ process integration.

Section 2 concentrates on the foundational concepts that support IPD, with six chapters. ••

••

••

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Chapter 4 – Value from an IPD perspective: Chapter 4, written by Rowlinson and Walker, tackles the vexed issue of value: what it means and how value and cost are separate concepts. The ‘value for money’ (VfM) term is often used whereas perhaps ‘best value’ may be more appropriate. Value to whom? This is a question also discussed in this chapter because it affects how project briefs/visions are conceptualised and communicated. Chapter 5 – The role of the client: Chapter 5, also written by Rowlinson and Walker, addresses an often neglected issue in IPD: understanding the role of the project owner’s (client’s) representative participant (OP) in an IPD arrangement and how that role and the characteristics of those acting in that role may shape or limit IPD opportunities. The chapter takes a 50+ year perspective of how the OP has viewed its role in project delivery. A case is made for IPD from this project owner perspective. Project owner competences are discussed and suggestions are made how to enhance these for effective IPD. We also suggest how these may evolve in the future, perhaps influenced by technology and supply chain integration advances. Chapter 6 – Thinking systemically to mobilise IPD capability: In Chapter 6, van der Hoorn, Whitty and Walker take a systems perspective and discuss IPD as a complex product and service system. It introduces complex adaptive systems theory and a Heideggerian continental perspective applied to the IPD concept. Application of the systematic lessons learned knowledge (SyLLK) model to IPD on several case studies of IPD taken from USA publications is explored in depth. Recent literature on innovation and entrepreneurial activity suggests that when looking at complex projects from a system perspective, there is a need for not only technical, entrepreneurial, sponsorship support for the ‘system’ to drive effective project delivery but also a system of challenging assumptions in a review process to clarify what value is being added. Chapter 7 – Where is IPD coming from and where is it going to? Wang and Rowlinson illustrate in Chapter 7 an example of IPD outside of the conventional construction industry IPD sector. It illustrates how IPD has been developed in an advanced manufacturing setting for construction components. The case study organisation adopted advanced digital technologies and supply chain management processes. It point to where IPD may be heading. A case study of advanced manufacturing in China is used to explore collaboration, integration of design and delivery and the use of advanced digital technologies and supply chain 12

Introduction and context

••

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management approaches. This provides a glimpse into future directions in project delivery that is emerging strongly. The chapter links to numerous other chapters that explain the how and why questions about IPD. In this case, how the emerging digital and robotic technologies combined with a new approach to supply chain management (SCM) may influence IPD in coming years and why this advanced manufacturing technology development is an important innovation that may shape IPD further in the future. Chapter 8 – The role of IPD in facilitating design thinking and creativity: Chapter 8, by Walker and Rowlinson, speaks to a vital foundational aspect of effective IPD. In this chapter we explain how creativity and design thinking is critical to effective IPD deployment. This lies very much at the front end of project realisation. Chapter 9 – Foundational elements of the IPD Collaboration Framework: Walker and LloydWalker explore in Chapter 9 the foundational facilities component of the Collaboration Framework briefly discussed in Chapter 2 in more detail. These facilities form the core baseline requirements for high level IPD collaboration to occur.

Section 3 concentrates on people, culture and collaboration as key ingredients to successful and effective IPD. ••

••

••

••

••

Chapter 10 – IPD from a culture perspective: Chapter 10, by Walker and Rowlinson, explores and explains the culture of collaborative behaviours and more specifically delves into culture from a national as well as organisational perspective. The formation and maintenance of identity and motivation to form strong cultural bonds is a critical factor in shaping aligned and integrated joint goals and behaviours and helps to explain how no-blame workplace cultures develop. Chapter 11 – Knowledge, skills, attributes and experience (KSAE) for IPD-alliancing task motivation: Walker and Lloyd-Walker discuss in Chapter 11 recent research that identifies the knowledge, skills, attributes and experience (KSAEs) that shapes collaborative behaviours and links to strategies to develop these KSAEs to theory explaining how IPD encourages people on IPD projects to be motivated. These KSAEs provide human capital drivers that feed and sustain collaboration. Chapter 12 – People, careers and IPD human resource management: This chapter links closely to Chapter 2 to address a deficiency that is a poorly discussed aspect of project management. Lloyd-Walker, Crawford, French and Walker discuss career development in the new projectified workplace for IPD project participants in particular, and how they craft and shape their careers and how IPD organisations can enhance their project participation. Human resource management (HRM) implications have received scant attention at the operational and strategic levels of IPD projects. This chapter fills a gap in current literature in highlighting the requirements for new perspectives on HRM in integrated organisations that needs to attract and retain people with advanced collaboration skills and experience. Chapter 13 – IPD from a participant trust and commitment perspective: Davis and Walker in Chapter 13 position the influence and impact of trust, commitment and motivation into the context of an IPD framework and help to distinguish how characteristics of these aspects influence IPD effectiveness. It also discusses the psychological contract and how that affects collaborative behaviours and provides a focus on: how conflict is caused and resolved, resolution mechanisms, and creating a no-blame environment. Chapter 14 – IPD from a stakeholder perspective: In Chapter 14, Aaltonen, Huemann, Kier, Eskerod and Walker explore and explain the concept of stakeholder engagement through applying an IPD perspective. Stakeholders include both project-internal as well as 13

Derek Walker and Steve Rowlinson

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project-external people. Stakeholder engagement theory and discussion of its practice was nascent at the time of writing the 2008 book on procurement systems that this handbook updates (Walker and Rowlinson, 2008b) and there have been a number of important advances since that time, including the addition of stakeholder management as a project management body of knowledge (PMBOK) ‘knowledge area’ (PMI, 2013). This chapter draws upon case study material illustrating this emerging field in project management from Finland, Australia and Belgium to draw out IPD perspectives on working with stakeholders. Chapter 15 – Behavioural elements of the IPD Collaboration Framework: Walker and LloydWalker explore and discuss in Chapter 15 the behavioural factor component of the Collaboration Framework in more detail than was briefly outlined in Chapter 2.

Section 4 moves far beyond an update of the Walker and Rowlinson (2008b) edited book content that related to technology and process aspects of relational contracting forms such as IPD. In this handbook we have been able to broaden the scope of discussion as well as deepen it to reflect the changes that have taken place more recently with internet-based technology that connects so many actors in the IPD process. Another implication of recent and emerging advances in ICT is that an unprecedented volume of data and information is generated through design and delivery of projects that places massive challenges to IPD teams in knowing how to effectively manage data and information to enhance collaboration rather than smother it. ••

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Chapter 16 – The new role for emerging digital technology to facilitate IPD and improve collaboration: a disruptive innovation perspective: Newton, Lowe, Rowlinson and Walker in Chapter 16 provide a fresh look at digital disruption technologies that have taken us beyond building information models (BIMs) as a design or even facilities management tool. They highlight emerging digital technologies affecting the way that digital technology is perceived and applied within the IPD world in particular. They also discuss how technologies such as drones, 3D printing and radio frequency identification (RFID) may impact the way people work and how collaboration may be enhanced and IPD undertaken to cope with and adapt to technological innovation game changers. Chapter 17 – IPD from a lean-supply-chain management perspective: Walker and Matinheikki in Chapter 17 take a cue on themes of system integration and links between technology and humans, projects and firms engaged within a supply chain. They draw upon developments and lessons learned about SCM, also drawing upon emerging ideas of agile PM. Two case studies are used to demonstrate how lean thinking may be related to logistics and SCM. The first case study discusses the Australian Victorian government’s Level Crossing Removal Program (LXRP), more specifically the way that IPD influenced a 24/7 rail section shut down in a ‘37-day blitz’ to remove four rail crossings, lower the rail grade and construct four bridges as well as associated rail station and signalling works. The second case study traces the development of the ‘Baulog’ logistics approach to the redevelopment of the Potsdamer Platz in Berlin. This chapter moves beyond SCM and Lean principles to also focus on how planning theory practice is being re-thought because of opportunities offered by the integration of the facility operator in the project delivery team. Chapter 18 – IPD: facilitating innovation diffusion: Love and Walker first focus in Chapter 18 on how the process of learning and innovation diffusion takes place and then moves on beyond being limited to a descriptive mode to being based on recent empirical work within an alliance environment, to explain how people and technology are generating dynamic capabilities. This chapter explores how innovations are diffused into participating IPD 14

Introduction and context

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••

organisations as an added incentive for them to collaborate. Two case study examples of innovation diffusion in a program alliance context are also presented. Recent findings from research into how knowledge management and organisational learning was achieved on the two program alliances in Australia provide specific relevant concrete examples of how lessons learned about innovative ways of working were diffused across both program alliances. Chapter 19 – IPD governance implications: In Chapter 19, Andersen, Klakegg and Walker take a more detailed process focus on governance, through discussion of front-end project aspects. For example, they explore stage-gate processes, originally recommended by the Office of Government Commerce (2007) for commercial and infrastructure projects in particular. They also draw upon work by Merrow (2011) on industrial megaprojects, and Samset and his colleagues in studying the Norwegian CONCEPT process (Samset, Andersen and Austeng, 2014) in the petrochemical and mineral extraction industry sector. This front-end governance work critically impacts IPD projects during their early stages. The chapter also more broadly discusses governance in IPD projects from the perspective of organisational structures such that seen with alliance leadership teams (ALT) and alliance management teams (AMT). Chapter 20 – Information management in the built environment: In Chapter 20, Agas, Miska, Memon, Rowlinson and Walker segue from the previous chapter to focus on data and information management because opportunities and threats presented by taking advantage of ‘big data’ and sensibly adopting information technologies present challenges to organisations to adapt their strategic planning and delivery processes of project delivery to suit this new environment. A potential for more effective information management using these emerging technologies, particularly at the facilities operations end of the project cycle, has been shown to be a game changer. Their impact on facilitating collaboration and the potential impact on sustainability and facilities operational efficiencies makes this topic a vital consideration for IPD practitioners. Chapter 21 – Processes and means elements of the IPD Collaboration Framework: Walker and Lloyd-Walker in Chapter 21 explore and explain the processes and means component in more detail to elaborate further on the Collaboration Framework briefly discussed in Chapter 2.

Section 5 provides new and relevant perspectives on IPD that have received scant attention to date. Projects are not an isolated island (Engwall, 2003) but are linked within a specific context and overall program of works as means to a strategic end. A rationale must be present at the project level so that value adding can make sense, i.e. adding value for whom and to what purpose? We argue in these chapters that IPD should not only be about integrating teams and people but also about integrating approaches to business incentive and performance rewards. ••

Chapter 22 – Integrating capital project delivery: an activity theory-based approach: Synott, Rowlinson and Walker in Chapter 22 take an activity theory-based approach for understanding the way that the project owner, designer and delivery teams interact on traditional forms of project delivery and numerous past attempts to integrate their actions to achieve a united and unified one-team response. Applying this theory, that helps explain the dynamics of interaction in communities, helps us understand how IPD may offer a solution to the many disruptions and barriers that these parties (as well as their interaction with the facility operators) have faced. It also suggests how an IPD approach may take advantage of existing and emerging digital technologies to collaborate more closely through having a deeper understanding of the system they are operating in and the social significance of 15

Derek Walker and Steve Rowlinson

••

••

••

••

••

people working within that system and how their history and organisational culture may have impacted them. Taking a systems view can reveal problems that are masked by the way that different discipline team members view problems and possible solutions. A Hong Kong case study example is used to illustrate how activity theory was used to resolve just one of many technical issues and illustrates how an effective IPD approach can be beneficial in achieving collaboration to solve many project design and delivery problems. Chapter 23 – IPD from an ethics perspective: Chapter 23, by Lloyd-Walker and Walker continues the focus on a value perspective based on an ethical consideration of ‘what is value and value to whom?’ Discussion of and explanation of the concept of ethics and corporate social responsibility (CSR) is logically linked to IPD because a core aim of IPD is for a ‘oneteam’ approach to best-for-project (or network for programs of work/projects) outcome and as Klakegg and colleagues (Klakegg, 2010; Klakegg, Williams and Shiferaw, 2016) have argued from experience and research, public sector projects owners have a strong publicgood orientation, with different ideal outcomes to the private sector. This chapter also discusses the concept of creating shared value that is applied in projects such as infrastructure projects using the Sugarloaf North–South water pipeline as a case study example to explore ethical issues and how value was framed to include ethical and sustainability outcomes. Chapter 24 – Design and construction for operability: Atkin and Rowlinson in Chapter 24 address a poorly integrated aspect of IPD at present: the consideration of integrated facilities management (FM) into the project design and execution. While the whole of life cost and benefit analysis is thought to be considered in both IPD and public–private partnership (PPP) delivery forms, the advances in technology discussed in Chapter 16 are rarely considered. This is despite massive long-term benefits that may arise in the short to medium term if these new technologies could be incorporated into the project design. Chapter 25 – IPD and safety management: a productive combination: In Chapter 25 Rowlinson discusses occupational health, safety and well-being (OHSW). This is an important chapter that links to, informs and is informed by numerous other chapters in this book. It makes the case for IPD and the newly emerging digital and advanced manufacturing technologies being a catalyst of change together with design thinking being applied to work process and tasks, to positively change the nature of OHSW. It draws upon research and experiences from major construction projects in the Hong Kong context but also draws upon global trend reflections. Chapter 26 – IPD performance and incentive management: Walker and Rowlinson begin Chapter 26 with a general discussion of success and what success may look like to different project delivery stakeholders to help clarify differences in then value for money (VfM) and best value concepts that heavily influence how performance is perceived. Chapter 26 also discusses how project performance is operationalised within an alliancing context through key result areas (KRAs) and how key performance indicators (KPIs) are developed and used. The chapter also discusses how participants may be rewarded with a strong focus on project incentive approaches to provide pain- and gain-sharing mechanisms to incentivise participants to an IPD project. There has been some recent literature emerging on this topic that provides fresh new insights (Lahdenperä, 2016b;2016a). Chapter 27 – IPD and TOC development: Walker and McCann in Chapter 27 provide an explanation of how an IPD performance model is developed and how the target outturn cost (TOC) and target delivery time is developed and administered. This chapter explores the concept of cost and budget and how value may be identified for delivery through an IPD TOC process. There has been much confusion in the literature and in the reporting press about the basis process of project cost and budget estimating with particular 16

Introduction and context

••

uncertainty and ambiguity of what a project cost figure actually represents. This chapter discusses this area in preparation to explain the process of target outturn cost (TOC) development within the context of IPD alliancing. The TOC process is explained in detail based on experiences of one of the co-authors who had been the bid manager on many Australian alliances over a period of several decades since their early introduction. Chapter 28 – An IPD approach to disaster recovery: In Chapter 28, Mulowayi and Walker focus on disaster recovery from an IPD perspective. The chapter traces the disaster recovery process from an IPD point of view and illustrates how this is being achieved in a post-earthquake context in New Zealand as well as post-flooding disaster recovery in Queensland Australia. This chapter reminds us that IPD may be effectively applied in non-commercial contexts and that close integration of governments, nongovernment organisations and commercial entities is necessary where disruption to the ‘normal’ infrastructure has been experienced.

Conclusion We first introduced readers to the IPD concept by providing a definition and brief explanation based on two authoritative sources. This allowed us to frame the context of the book and, with the brief explanation of the concept, we were able to highlight ten major differences between this approach and other forms of collaborative delivery that do not contain the triad of owner, designer and delivery participant teams. This allowed us to differentiate this handbook from many other texts on project procurement and delivery forms. We introduced the provenance of the book in terms of co-editors past contributions and level of connection (academic and practice) to the field of project procurement in general and IPD in particular. A separate section in this book also provides a brief biography of all contributors to this handbook and readers will see that we have been able to gather an impressive and valuable global set of research and practice insights. We trust that this book will provide a primary ‘go-to’ source for all potential readers, academics and practitioners with an interest in how IPD actually works within the context of the first two decades of this 21st century.

Note 1 3BL refers to three bottom-line performance values: financial, environmental and social outcomes.

References American Institute of Architects – AIA California Council (2007). Integrated project delivery: A guide. Sacramento, CA: American Institute of Architects – AIA California Council. Ashcraft, H. W. (2010). The IPD Framework, Contract Briefing Note. San Francisco, CA: Hanson Bridgett LLP: 26 pp. Atkinson, R., Crawford, L. and Ward, S. (2006). “Fundamental uncertainties in projects and the scope of project management.” International Journal of Project Management. 24 (8): 687–698. Brady, T. and Davies, A. (2004). “Building project capabilities: From exploratory to exploitative learning.” Organization Studies. 25 (9): 1601–1621. Brady, T., Davies, A. and Gann, D. M. (2005). “Creating value by delivering integrated solutions.” International Journal of Project Management. 23 (5): 360–365. Davies, A., Hobday, M. and Prencipe, A. (2005). The business of systems integration, Oxford: Oxford University Press. Davies, A., MacAulay, S., DeBarro, T. and Thurston, M. (2014). “Making innovation happen in a megaproject: London’s Crossrail suburban railway system.” Project Management Journal. 45 (6): 25–37.

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Derek Walker and Steve Rowlinson Davies, A. and Mackenzie, I. (2014). “Project complexity and systems integration: Constructing the London 2012 Olympics and Paralympics Games.” International Journal of Project Management. 32 (5): 773–790. Davis, P. R. and Love, P. E. D. (2011). “Alliance contracting: adding value through relationship development.” Engineering Construction & Architectural Management. 18 (5): 444–461. DeBarro, T., MacAulay, S., Davies, A., Wolstenholme, A., Gann, D. and Pelton, J. (2015). “Mantra to method: Lessons from managing innovation on Crossrail, UK.” Proceedings of the Institution of Civil Engineers - Civil Engineering. 168 (4): 171–178. Department of Infrastructure and Transport (2011). National Alliance Contracting Guidelines Guide to Alliance Contracting. Department of Infrastructure and Transport A. C. G. Canberra, Commonwealth of Australia: 168. Department of Treasury and Finance Victoria (2010). The Practitioners’ Guide to Alliance Contracting, Melbourne, Department of Treasury and Finance, Victoria: 161. Dodgson, M., Gann, D., MacAulay, S. and Davies, A. (2015). “Innovation strategy in new transportation systems: The case of Crossrail.” Transportation Research Part A: Policy and Practice. 77: 261–275. Doherty, S. (2008). Heathrow’s T5 history in the making. Chichester: John Wiley & Sons Ltd. Engwall, M. (2003). “No project is an island: Linking projects to history and context.” Research Policy. 32 (5): 789–808. Gardner, T. M. (2002). “In the trenches at the talent wars: Competitive interaction for scarce human resources.” Human Resource Management. 41 (2): 225–237. Heidemann, A. and Gehbauer, F. (2011). “The way towards cooperative project delivery.” Journal of Financial Management of Property and Construction. 16 (1): 19–30. Jefferies, M. and Rowlinson, S., Eds. (2016). New forms of procurement: PPP and relational contracting in the 21st century. Abingdon, Oxon: Taylor & Francis. Klakegg, O. J. (2010). Governance of Major Public Investment Projects in Pursuit of Relevance and Sustainability. PhD, Faculty of Engineering Science and Technology, Department of Civil and Transport Engineering. Trondheim, Norwegian University of Science and Technology. Klakegg, O. J., Williams, T. and Shiferaw, A. T. (2016). “Taming the ‘trolls’: Major public projects in the making.” International Journal of Project Management. 34 (2): 282–296. Kurtz, C. F. and Snowden, D. J. (2003). “The new dynamics of strategy: sense-making in a complex and complicated world.” IBM Systems Journal. 42 (3): 462–483. Lahdenperä, P. (2012). “Making sense of the multi-party contractual arrangements of project partnering, project alliancing and integrated project delivery.” Construction Management and Economics. 30 (1): 57–79. Lahdenperä, P. (2016a). “Formularising two-stage target-cost arrangements for use in practice.” International Journal of Managing Projects in Business. 9 (1): 147–170. Lahdenperä, P. (2016b). “Preparing a framework for two-stage target-cost arrangement formulation.” International Journal of Managing Projects in Business. 9 (1): 123–146. Lloyd-Walker, B. M. and Walker, D. H. T. (2017). The Sugar Loaf Water alliance – An Ethical Governance Perspective. Governance & governmentality for projects – Enablers, practices and consequences. Muller R. Abingdon, Oxon: Routledge: 197–220. Martin, J. and Schmidt, C. (2010). “How to keep your top talent.” Harvard Business Review. 88 (5): 54–61. Merrow, E. W. (2011). Industrial Megaprojects – Concepts, Strategies, and Practices for Success. London: John Wiley & Son. Müller, R. and Jugdev, K. (2012). “Critical success factors in projects: Pinto, Slevin, and Prescott – the elucidation of project success.” International Journal of Managing Projects in Business. 5 (4): 757–775. NASF, COAA, APPA, AGC and AIA (2010). Integrated project delivery for public and private owners, standard. Lexington, KY: National Association of State Facilities Administrators: 40pp. Office of Government Commerce (2007). The OGC Gateway™ process – A manager’s checklist. London: The Stationary Office (TSO). PMI (2013). A Guide to the project management body of knowledge, 5th edition. Sylva, NC: Project Management Institute. Porter, M. E. and Kramer, M. R. (2011). “Creating shared value.” Harvard Business Review. 89 (1/2): 62–77. Rolstadås, A., Tommelein, I., Schiefloe, P. M. and Ballard, G. (2014). “Understanding project success through analysis of project management approach.” International Journal of Managing Projects in Business. 7 (4): 638–660. Rowlinson, S. and McDermott, P. (1999). Procurement systems A guide to best practice in construction, London: E. & F. N. Spon.

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Introduction and context Sage, D., Dainty, A. and Brookes, N. (2014). “A critical argument in favor of theoretical pluralism: Project failure and the many and varied limitations of project management.” International Journal of Project Management. 32 (4): 544–555. Samset, K., Andersen, B. and Austeng, K. (2014). “To which extent do projects explore the opportunity space?” International Journal of Managing Projects in Business. 7 (3): 473–492. Snowden, D. J. and Boone, M. E. (2007). “A leader’s framework for decision making.” Harvard Business Review. 85 (11): 69–76. Walker, D. H. T. and Hampson, K. D. (2003). Procurement strategies: A relationship based Approach, Oxford: Blackwell Publishing. Walker, D. H. T. and Lloyd-Walker, B. M. (2014). Project Alliances: A New Direction in Temporary Organization Forms. Projects and Temporary Organizations – Theory and Practice. Lundin R. and M. Hällgren. Copenhagen, Denmark, Copenhagen Business School (CBS) Press: 91–113. Walker, D. H. T. and Lloyd-Walker, B. M. (2015). Collaborative project procurement arrangements. Newtown Square, PA: Project Management Institute. Walker, D. H. T. and Lloyd-Walker, B. M. (2016). “Understanding the Motivation and Context for Alliancing in the Australian Construction Industry.” Internal Journal of Managing Projects in Business. 9 (1): 74–93. Walker, D. H. T. and Rowlinson, S. (2008). Procurement Systems – A Cross Industry Project Management Perspective. Abingdon, Oxon: Taylor & Francis. Waugh, W. L. and Streib, G. (2006). “Collaboration and leadership for effective emergency management.” Public Administration Review. 66 (Special Issue): 131–140. Wearne, S. and White-Hunt, K. (2014). Managing the urgent and unexpected: Twelve project cases and a commentary. Farnham, UK: Gower. Weick, K. E. and Sutcliffe, K. M. (2007). Managing the unexpected : resilient performance in an age of uncertainty in an age of uncertainty, Hoboken, NJ: Josey-Bass. Zwikael, O. and Globerson, S. (2006). “From Critical Success Factors to Critical Success Processes.” International Journal of Production Research. 44 (17): 3433–3449. Zwikael, O. and Smyrk, J. (2012). “A general framework for gauging the performance of initiatives to enhance organizational value.” British Journal of Management. 23: S6–S22.

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2 CHARACTERISTICS OF IPD A Collaboration Framework overview Derek H. T. Walker and Beverley Lloyd-Walker

Introduction This chapter provides an overview of the content and context of integrated project delivery (IPD) through the medium of a framework that identifies and explains the basic components of IPD. This chapter therefore delivers foundational understanding to support this handbook. Chapter 1 presented the concept of integrated project delivery (IPD) and Table 1.1 contrasted ten characteristics of IPD with non-IPD forms. In this chapter we outline recent frameworks describing IPD elements or characteristics. These help us to not only describe and understand the nature of IPD but they may also be useful for measuring and visualising how IPD might be delivered. IPD collaboration frameworks are necessary for measuring IPD concepts. They use descriptors to calibrate conceptual elements of IPD so that a holistic image may be presented that adequately describes a particular IPD configuration, preferably visually. These frameworks may be used strategically or operationally. Any framework that can describe and measure IPD elements, even at a coarse-grained level, presents a powerful tool for IPD strategy and operational management. IPD collaboration frameworks may be used to assist in the strategic design of project delivery mechanisms. For example, the way that the trust and commitment of various parties involved in a project may be shaped or reinforced will have a significant impact on the behaviours of party members towards each other. It establishes what will be considered appropriate and inappropriate. This trust and commitment element of ‘the mix’ of a project delivery ‘system’ will impact upon other elements. It is very difficult to understand how this element may impact upon other elements without a way to visualise ‘the system.’ Chapter 6 discusses these aspects in greater depth. Similarly, IPD collaboration frameworks may be used in the operational managing of project delivery mechanisms. For example, in trying to balance the way that ‘trust’ mechanisms may encourage collaboration with ‘control’ mechanisms designed to monitor actions through a designed project governance mechanism it would be useful to be able to visualise and measure how these mechanisms may be represented to compare an ‘as-is’ to a ‘should-be’ situation. Once we have a way to benchmark an abstract construct within an IPD configuration such as ‘trust’ or ‘control’, visually presented alongside other related concepts, then it is easier to understand likely cause-and-effect loops, consequences and opportunities. 20

Characteristics of IPD

We also provide an overview of the Collaboration Framework developed by Walker and Lloyd-Walker (2015) to illustrate how IPD Collaboration Framework tools such as this might be used in practice. The chapter also provides a basis for understanding how other chapters link together.

How can we begin to understand the IPD concept? Chapter 1 provided a rationale for engaging in IPD and also detailed ten significant differences between a traditional project delivery form and IPD. The extent of collaboration varies across the numerous forms of IPD for good reasons and the ability to collaborate depends upon both personal collaboration competences as well as organisational structural facilitation for collaboration and organisational collaboration competencies. An initial categorisation of IPD forms in a model that illustrates four orders of collaboration supports deeper understanding of IPD (2013, p9; 2015, p108). The first order of collaboration is characterised by an efficiency focus. The second has an additional focus on fair process and common purpose. The third order of collaboration extended the focus to common operational platforms and the fourth added commitment to inter-team relationships. Additionally, across these four orders of collaboration, increasing levels of early contractor involvement were identified. Also recognised was the extent of the pain-share/gain-share agreement and a ‘sinkor-swim-together’ mindset that was in place, with the project owner’s involvement that varied from being largely contractually ‘hands-off’ at the lowest order of collaboration to being highly ‘hands-on’ at the highest order of collaboration. This framework provides a useful starting point to understand generic levels of IPD. Key elements of a framework that makes sense of IPD also characterise collaboration at two levels: (1) The nature of the relationship between the owner’s representative participant (OP) the design team and project delivery team. (2) The institutional collaborative facilitation mechanisms that are developed and maintained to support collaboration at the desired level. IPD institutionalisation may occur at a project level when the extent of collaboration is institutionalised for the duration of a project delivery, or it may extend across a series of projects in a programme of work. Program IPD forms such as framework agreements or programme alliances may be time-based, for example a five-year agreement (Walker and Harley, 2014), or a large project may be split up into a programme of work comprising a mixture of individual project packages such as the recently completed Victorian Regional Rail Link programme. The Regional Rail Link programme/ project was a multi-billion Australian dollar project that separated metropolitan and regional services where they previously intersect in Melbourne’s west. The programme/project built dedicated tracks for three regional city lines – Geelong, Bendigo and Ballarat – so the trains could run through the metropolitan system from the western suburb Sunshine to the central city Southern Cross Station (URL http://economicdevelopment.vic.gov.au/transport/rail-and-roads/public-transport/regionalrail-link). Another example of a mega-programme/project that was split into numerous, very large project packages within an IPD programme, was London’s Crossrail (www.crossrail.co.uk) and more recently the Thames Tideway (www.tideway.london). The IPD approach taken in these two megaprojects was based on experiences gained in the UK from that taken for Heathrow Terminal 5 and for the London Olympics. Each of these programmes of works was undertaken with a sophisticated PO 21

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organisation in the form of a government authority established to specifically develop the programme of work using an IPD approach that incorporated very high levels of collaboration (Gil et al., 2012; Brady and Davies, 2014; Davies et al., 2016). We can start to understand IPD in terms of the formation of an institution: be that a project or programme of projects. The institutional perspective is useful because institutional theory helps explain how: 1 2 3 4

Organisations form; They are shaped to evolve; How they may be undermined or supported as they evolve; and How they are terminated.

Each project or programme uses the resources from many independent organisations. There is no adoption of a single dominant participating organisation’s culture, heritage, norms, identity or structural form. What is observed to happen is that each participating organisation provides an influence that adapts the way ‘things are done’ from the template provided by the contractual arrangements specified for the project or programme. Each party is engaged in what may be described as institutional work in shaping and influencing an organisation’s characteristics (Battilana and D’aunno, 2009). The aggregate project participant’s norms are shaped by an evolving and created project identity. Gioia, Patvardhan, Hamilton, and Corley (2013) extensively investigate how organisational identities are created, maintained, and transformed within a complex and evolving business environment. Projects and programmes of projects involve a host of organisations that are only in part governed by a common set of values espoused in contract documents and other similar artefacts. Accordingly, an identity is forged through a series of interacting influences, power structures and cultural perspectives (Gioia et al., 2010). Projects are delivered by people, not by robots, contracts or automatic processes and so there is a need to focus on project work from a reflective practitioner perspective (Crawford et al., 2006). This is why there has been a recent focus on the need for developing what has been termed ‘soft skills’ in the project management literature across a range of project types (Muzio et al., 2007; Pellerin, 2009; Azim et al., 2010; Stevenson and Starkweather, 2010). This is primarily because people have agency, they decide how to interpret situations in their own way, based on their individual experience, culture, knowledge and the way that ‘the system’ permits them discretion (Mullaly, 2014;2015). Projects or programmes can be thought of as being institutions. The dictionary definition of an institution is ‘a large organisation founded for a particular purpose’ (Oxford, 2011, p736). While most people might think of institutions as universities, hospitals, prisons, etc. because they are established for a purpose, it is also logical to consider projects and programmes of projects and indeed organisations such as design firms, contractors and sub-contractors as institutions. In doing so this opens up possibilities to more clearly understand how people act and how they exercise agency. Taking a contractual form as a starting point, we can begin to understand how organisations function and behave based upon the contract form and conditions. A more limited view of a contract is that it determines what is legitimate, but when we take an institutional perspective we may see that a contract document is merely a raw resource to be interpreted, shaped and used. Battilana and D’aunno (2009, p48) describe dimensions of agency deployed in institutional work. They identify how people exercise agency, their free will and decision-making, in creating, maintaining and disrupting institutions. Looking at IPD from this perspective we can better start to understand how a presented contractual form (the IPD agreement for example) is adapted in its 22

Characteristics of IPD

actual use by the many organisations that are parties to a project and how they authenticate their actions based on ‘what is right’ in terms of the given contract, their home-based organisational rules and norms and how they are influenced by others they engage with through the project/ program. This agency and institutional work perspective provides us with a useful way to understand how a given project institution is created and evolves. It helps to explain why a standard IPD agreement form, for example, may produce a variety of performance outcomes and how they may be influenced by various individual people and organisations that collaborate. Figure 2.1 illustrates collaboration from an institutional perspective. One of the founding contributors to institutional theory is Scott (1987;2001;2014). According to Scott, there are three institutional pillars: regulative, normative and cultural-cognitive. The regulative pillar comprises the rules and regulations. From an IPD perspective, we could see this as the form of IPD agreement or contract form whether that is a framework agreement, alliance agreement, or other IPD forms such as the T5 agreement for Heathrow Terminal 5. All documentation, process handbooks and standard procedures for example forms this pillar as a reference point. The normative pillar comprises the organisational culture, the workplace environment and even, as Walker and Lloyd-Walker (2014) have observed on alliance projects, the ambience of the project/programme workplace. This normative pillar sets the ‘tone’ and behavioural expectations for the project/programme. It makes specific behaviours, values and actions legitimate. This pillar may compliment the regulative pillar or may contradict it at times. The third pillar is the cultural-cognitive pillar which controls agency and how people interpret the regulative framework given their exposure to their home-base normative influences as well as the evolving project/programme ‘culture and norms.’ People’s agency is circumscribed by what they feel is possible, desirable and proper, given the context and circumstances as they understand these. The institutional work perspective provides a powerful facilitator of understanding how IPD, whatever form that may take, is actually operationalised. Naturally, it is helpful to identify

Project /program owner, design team, delivery team as a ‘one-team’ group and individuals

Translating strategy into action

How to collaborate to: Respond

Regulative pillar: Rules; governance: templates: guides.

Normative pillar: Culture (national, group, organisation) espoused values, Perceived praxis

Cultural-cognitive pillar: Agency, skills, knowledge, dexterity, resilience, reflective capacity.

?

Figure 2.1  Strategy delivery through projects from an institutional perspective

23

Reflect

(Re-)Calibrate

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factors that contribute to successful IPD and also to provide a framework or model that may be easily visualised. However, identifying factors or characteristics is one valuable contribution but what is more valuable is to explain how knowledge about the nature of characteristics or factors may be extended to help explain how these operate in practice and how they may be treated to result in an optimised outcome. Clearly not only the regulatory institutionalisation pillar needs to be addressed in operationalising IPD but also the normative and cultural-cognitive pillars. A framework that analyses what is going on within any IPD project/programme should be able to offer both strategic and operational insights.

Developing an IPD Collaboration Framework: first steps One recent attempt to describe how an alliance may operate effectively in practice was offered by Ibrahim (2014). He undertook a rigorous study of road alliance projects in New Zealand interviewing five experienced alliance practitioners (two consultants, two contractors and a client participant) and validating results using a Delphi technique through participation of 17 highly experienced alliance experts. His research identified seven key indicators of alliance team integration and collaboration that were weighted by perceived importance as shown in Table 2.1. He also tested the framework against three New Zealand road alliance project case studies. His quantitative measures indicate what each of seven identified key indicators (KIs) mean. These measures may be only of indicative use in understanding how collaboration works in alliances but having importance weightings identified for each collaboration indicator is very valuable in aiding our broader understanding of IPD in practice and which KIs may be more important than others. It is interesting to note that the identified KI factors are all of a behavioural nature without any factors that link to the way that the IPD form (alliance in this case) was structured or how that structure may impact required behaviours. Also, several of these factors do not seem to quite match their tagged KI, for example KI 1 Team leadership is measured by cost and time performance measures rather than ‘softer’ measures about how the project was led or how the organisational structure adopted, supported or hindered leadership. However, despite any limitations that can be observed from this framework it does provide a step in the journey of providing a useful framework for understanding and visualising how IPD operates or should operate. These seven indicators also support the behavioural factors identified in the second IPD Collaboration Framework to be discussed in this chapter and throughout the book. Ibrahim (2014) also discusses how the integrated OP design and delivery contractor participants collaborate with the project alliance board, forming part of the governance arrangements. This board comprises a leadership team of key high-level executives from the non-owner participants (NOPs) in an alliance who act as sense-making, coordination and high-level communication links between the project alliance management team (AMT) and the NOPs’ home-base organisations. This governance mechanism allows urgent resource requirements or other actions that NOPs can take to avert emerging crises as well as providing a potent cultural-cognitive mechanism for solving unexpected problems that an AMT who have no direct control or influence over their home organisations may face. This form of board is referred to as an alliance leadership team (ALT) in Australia (Ross, 2003). Table 2.1 illustrates the seven KIs identified by Ibrahim. While the above framework has gaps when viewed from the institutional-theory perspective in the regulative, normative and cultural-cognitive pillars it does offer insights into important required behaviours of IPD participants that influence the norms of the organisational culture. 24

Characteristics of IPD Table 2.1  Measuring team integration alliance practice in New Zealand Key Indicator (KIs)

Weightings

Corresponding Quantitative Measures (QMs)

KI 1

Team leadership

0.250

KI 2

Trust & respect

0.214

KI 3

Single team focus on project objectives and key results areas (KRAs) Collective understanding

0.179

Variation of actual time/cost against program/budget expressed as a percentage of the project’s progress. Survey of alliance teams’ satisfaction on the level of trust and respect by using a Likert scale. Survey of alliance teams’ understanding of the project objectives and KRAs by using a Likert scale.

Commitment from project alliance board (PAB) Creation of a single and co-located alliance team

0.107

Free-flow communication

0.036

KI 4 KI 5

KI 6

KI 7

0.143

0.071

Percentage of alliance team attendance in weekly project briefing. Percentage of PAB members’ (original) attendance in PAB meetings. Number of staff allocated on-site against the overall number of staff expressed as a percentage of the single and co-located alliance team. The turnaround time for Requests for information (RFI) and design engineering instructions (DEI).

(Source: Ibrahim, 2014, p145)

Two other frameworks have also been developed that assist us in understanding the nature of collaboration in IPD forms, alliancing in particular. The second framework arose out a quantitative study involving data from completed valid survey responses from 320 Australian construction organisations arising from 1,688 invitations to participate in the survey (Chen and Manley, 2014). Their survey requested responses to a series of questions relating to collaboration and innovation on projects nominated by respondents to focus their responses on a specific project they had been engaged upon. They report that 79% of the responses related to alliance delivery projects (Chen and Manley, 2014, p5) and the sample was evenly split between contractor, designer and client organisations, and so this represented a rigorous and unbiased view of experts experienced in IPD projects. Additionally, 89% of respondents had been part of delivery teams for at least one collaborative project with 17% having been involved in working on ten or more collaborative projects. Using both exploratory and confirmatory factor analysis to analyse the data, their analysis confirmed that ‘both formal and informal mechanisms were perceived by the practitioners to be attributes of collaborative project governance used to manage complex infrastructure projects in Australia.’ Their research also confirmed the essential mechanisms that define formal and informal governance for collaborative infrastructure projects. They identified ‘three market formal governance mechanisms: (1) collective cost estimation, (2) risk and reward sharing regime, and (3) risk sharing of service providers’ (Chen and Manley, 2014, p10). They also identified five informal governance mechanisms: ‘(1) leadership, (2) relationship manager, (3) team workshops, (4) communication systems, and (5) design integration’ (p11). Interestingly, they discovered that ‘While both formal and informal mechanisms have positive impacts on performance, the implementation intensity of informal mechanisms is a greater predictor of project performance variance than that of formal mechanisms.’ This could be seen as influencing the norms and cultural-cognitive institutional pillars described by Scott (2014). The strength of this finding was unexpected, and certainly supports more extensive use of collaborative delivery 25

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systems. Furthermore, the influence of formal mechanisms on project performance was found to be mediated by informal mechanisms. Consistent with recent work examining project governance, the study found that hybrid project governance, which combines both formal and informal mechanisms with both market and hierarchical transactions, is needed to achieve project performance targets. The study advances the frontier of knowledge by identifying and explaining the different roles played by the two types of mechanisms. The findings imply that formal and informal governance are not interchangeable; each has a distinctive role. Thus, they rely on each other to maximize project performance. (Chen and Manley, 2014, p11) Insights from Chen and Manley (2014) are useful in light of our earlier discussion on the three pillars of institutional theory. Rules as formal governance explain one mechanism for the way a collective of organisations engaged on a project create and maintain a single project entity as if it were an institution. Informal governance mechanisms identified by Chen and Manley (2014) as well as the KIs from Ibrahim’s (2014) study help explain some of the normative and cultural-cognitive pillars of institutional theory offered by (Scott, 2014) and how action may be calibrated. However, both frameworks still do not provide a holistic view of how these three pillars actually operate.

Developing an IPD Collaboration Framework: identification of a robust model Both of the above frameworks, together with consideration of institutional theory, highlight a collaborative capability versus collaborative capacity paradox. Having the capability to take a particular action does not result in the intended action taking place without a capacity to do so. Capability is characterised by having the means and essential ability to potentially act. Organisations and individuals may have knowledge capabilities of how to muster the necessary resources to effectively collaborate and also have the cognitive ability to do so. However, unless they have the motivation and are able to secure the resources, supportive leadership and operational management processes to do so, they will face significant challenges and blockages that will thwart converting collaborative intent into action. A third recent framework was developed independently of Ibrahims (2014) and Chen and Manley (2014) to address identifying the vital elements of translating collaborative capacity into capability in IPD project forms. This framework was originally described as a relationshipbased procurement taxonomy (Walker and Lloyd-Walker, 2015) but its potential application was later appreciated as being useful to understand how managing uncertainty may best operate in complex situations where intense collaboration between project delivery partners offers multiple perspectives on challenges and potential actions to address identified challenges. The Collaboration Framework (Walker and Lloyd-Walker, 2015) was based on analysis of interviews with 36 IPD expert practitioners and 14 leading academics in this field of study. This study, mainly based in Australia, also involved interviews with experts from the UK, the Netherlands, Scandinavia and the USA. The framework makes no attempt to add weights to identified factors but it does address all three regulative, normative and cultural-cognitive institutionalisation pillars. The framework presented in Figure 2.2 illustrates the procurement taxonomy (Walker and Lloyd-Walker, 2015) referred to from now on as the Collaboration Framework. Figure 2.2 presents the three components of the Collaboration Framework platform facilities, behaviours and processes, routines and means, together with the 16 elements of the 26

Characteristics of IPD

Collaborating through integrated project delivery Behaviours

6 7 8 9 10

Processes, routines and means

Cultural-cognitive Pillar

- Authentic leadership - Trust-control balance - Commitment to innovate - Common best-for-projectmindset/culture - No blame culture

- Motivation and context - Joint governance structure - Integrated risk mitigation & insurance - Joint communication BIM etc. - Substantial co-location

Regulative Pillar

1 2 3 4 5

Platform facilities

Normative Pillar

11 12 13 14 15 16

- Consensus decision making – Incentivisation - Focus on learning & continuous improvement - Pragmatic learning-in-action - Transparency & open-book - Mutual dependence and accountability

Figure 2.2  Collaboration Framework (Source: adapted from Walker and Lloyd-Walker, 2016, p5)

framework. In addition it positions the three institutional pillars. The regulative pillar spans elements from both the platform facilities and processes, routines and means components. The cultural-cognitive and normative pillars span elements from the behaviours and processes, routines and means components. Details of the elements in the Collaboration Framework are discussed in depth in Chapters 9, 15 and 21 with each chapter devoted to describing each of the elements in the three components. The next section outlines how the Collaboration Framework may be used in practice.

IPD Collaboration Framework visualisation tool application There is nothing quite like a tool to visualise data in an easy-to-read way that allows readers to readily grasp complex concepts (Geraldi and Arlt, 2015). How, then, might the Collaboration Framework visualisation tool be used in practice? Each Collaboration Framework element has specific measures developed to enable facilitate an overall alliance or project delivery form to be mapped and illustrated to provide a holistic visualisation tool to be used for: 1 2 3

Designing a project delivery approach; Benchmarking projects against the Collaboration Framework 16 elements; and Providing a health check tool where the ‘as intended’ can be compared to the ‘as-is’ perceived situation.

Each element is measurable and so capable of being mapped. This allows a complex concept such as an IPD form to be visualised, for example in mapping how partnering arrangements of several contractors may be compared (Børve et al., 2017, p102) or when comparing two distinct project development phases using different IPD approaches (Walker and Rahmani, 2016). 27

Derek Walker and Beverley Lloyd-Walker

Using the Collaboration Framework visualisation tool for benchmarking We explain in this section how the tool may be used in practice by using a hypothetical example to illustrate how the tool might be applied to strategic decision-making.

A client with a strong portfolio of alliance-type projects wants to have a review undertaken to compare how its project alliances were delivered in practice. The objective being to know what, if any, variation was evident from the nature of the relationships between participant organisations and if any lessons learned may be gathered to more effectively make strategic future decisions about their IPD agreement form. This is essentially a benchmarking exercise to provide information and insights to make a strategic process improvement decision.

The client (hypothetically) has recently undertaken five rail engineering infrastructure alliances that are at various stages of completion and this client has a further three alliances about 50% complete with two recently started. With around ten years of experience in alliancing, this client, a state instrumentality, has a long pipeline of future projects. The context of these hypothetical projects is that they are situated in the state of Victoria, Australia, in a large metropolitan transport centre within a well-connected regional rail network. Each project OP on the client’s alliances is experienced in having completed several alliances. Similarly the design and delivery non-owner participants (NOPs) all have staff with direct past experience of working with alliancing. In general, past alliances with this state government instrumentality have been regarded as successful with about 80% of past projects being completed on or below budgeted time and cost and all meeting their key results areas (KRAs). While this situation looks promising, the client is concerned about being complacent and feels that further improvements are possible. The first task in addressing the above review is to identify an appropriate benchmarking methodology or framework to use. After considering the large amount of effort involved in developing an in-house benchmarking tool the client decided to adopt the Collaboration Framework because it was rigorously developed and already has identified elements of an alliance with measures that can be used to map alliance characteristics. The client decided to undertake a two-day workshop with a team of alliance managers (AMs) and alliance leadership team (ALT) members from the five near-complete alliance projects, three half-complete alliance projects and two recently started alliance projects. The workshop group numbered 32 people: an OP, and a design and delivery representative from each of the ten projects, plus a facilitator and scribe-recorder to assist with documentation and managing all resources required for the workshop. A two-day workshop was held, preceded by a brief introductory evening presentation of the Collaboration Framework – to familiarise participants with the framework. This presentation informed participants of the elements and their logic and the measures that would be used to map each project. Workshop participants had already attended a workshop, several months previously, in which the framework logic and each element were explained in more detail. Each project participant group of three people would spend day one of the workshop discussing each of the 16 elements to arrive at a consensus on the number to be allocated against each element’s rating, supported by several illustrative examples of supporting evidence. Ratings were to be numbered 1 = very low to 5 = very high. The client considered that 28

Characteristics of IPD

it would be reasonable to take about 30 minutes for each group to discuss each element with supportive evidence. Estimates were based on three participants taking five minutes to present their rating and rationale for that rating and then a further 15 minutes for group discussion to reach a consensus on a rating number for each element. This required a time commitment of a full day for rating the 16 elements. The facilitators then prepared the radar diagram as illustrated in Figure 2.3 and the following morning the group reconvened and spent a further day discussing the implications of the patterns and deviations from the pattern that may emerge. They also identified risks and opportunities and analysed likely causes and impacts based on the alliance radar figure patterns. This process presented a significant opportunity for shared learning as well as the development of the benchmark status. Participants were faced with the challenge of how were they to rate these elements? To address that challenge we suggest considering the Collaboration Framework example for Element 2 ‘joint governance structure.’ Two anchor points are illustrated below illustrate how to rate that element:

Low levels would be related to a laissez-faire approach where each participating project team has established its own individual stand-alone project governance standards. Little coherence in alignment of the whole project delivery organisational processes and structure is evident, with few explicit expectations about what success looks like and how to define and measure it. High relates to an effectively structured, uniform, integrated and consistent set of performance standards that apply across and within the project delivery teams. All participant organisations share a common understanding of how to organise for success and what constitutes valuable project output and outcome success.

Having the OP, and both a design-team and delivery-team perspective available enabled a reasonably honest and accurate assessment to be made. Notes were also made about anecdotes, suggested improvements and aspects that were of particular interest for learning from that project’s experience. The issues discussed revolved around a common view of how governance practices are undertaken across the OP and NOPs participant teams. Questions were raised such as what routines, standard systems (manual or in electronic form) and roles that people play in setting output and outcome expectations are appropriate? How should these expectations be operationalised and monitored for control? Other relevant reflections included questioning the level of agency or discretion that was deemed appropriate. In this way a coherent picture emerged that informed the discussion taking place about the way that governance was perceived at the individual and group level that allowed each individual group’s radar figure to be compared and contrasted against those of other groups. These workshop breakout sessions created a significant buzz of interactive conversation and unearthed surprising revelations about opinions and experiences by the three representatives for each project. Many had mistakenly first thought that they all were ‘singing from the same song sheet’ but in fact they had misunderstood baseline assumptions of other participants. This conversation can be valuable as it reveals ambiguity. Walker, Davis and Stevenson (2017) discuss ambiguity through two lenses. One lens is a people/process ambiguity situation where people assume that they are mutually following a unified path but in fact their assumptions are 29

Derek Walker and Beverley Lloyd-Walker

divergent so they use common terms or a construct that means different things to each party. The second lens may be that both parties assume that their ‘system’ or ‘process’ is common when different results can emerge from identical starting positions. Pich, Loch and Meyer (2002, p1013) argue that ‘Ambiguity refers to a lack of awareness of the project team about certain states of the world or causal relationships’; each party may assume a different starting point condition and so it is not surprising that an assumed end point is inconsistent without any deep discussion and knowledge sharing about initial assumptions. Walker et al.(2017) show that exposing ambiguity can help deliver more effective cost and time plans because such emergent ambiguity becomes exposed through dialogue where assumptions are discussed and unresolved issues become resolved to provide more accurate estimations. Notwithstanding the potential for developing both a heated and apparently confusing debate and dialogue, each project’s participants reviewed their assumptions and developed a shared understanding considered to be ‘reasonable’ or at least ‘dependably valid.’ All ratings for each project were collated and entered onto a spreadsheet (see Chapter 2 Appendix 1 for an example of the measures) at the end of day one. A radar map diagram was then produced in readiness for the second-day workshop session. A consolidated graph of all ten projects revealed a very useful global picture. All project results illustrated in Figure 2.3 are not alike, even when they are all alliances. This conclusion and its consequences are worthy of some further discussion. What is proposed here by these workshops is not something that produces ‘the truth’, or a ‘typical’ result. Rather it shows how the output serves as a very useful vehicle for further reflections. It prompts a number of questions worthy of the effort to it would take to attempt to answer.

Project 1

Project 2

Project 3

Project 4

Project 5

Project 6

Project 7

Project 8

Project 9

Project 10

Mutual dependence and accountability Transparency & open-book

Pragmatic learning-in-action

Motivation and context 5 4.5 4 3.5 3 2.5 2 1.5

Joint governance structure Integrated risk mitigation & insurance

Joint communication BIM etc

1 0.5 0

Focus on learning & continuous improvement

Substantial co-location

Incentivisation

Authentic leadership

Consensus decision making

Trust-control balance

No blame culture

Commitment to innovate Common best-for-project mindset/culture

Figure 2.3  Benchmark results from ten hypothetical projects.

30

Characteristics of IPD

One advantage of using the Collaboration Framework as illustrated in the above hypothetical example, is that it highlights benchmarking deviations from the established norm. By undertaking regular benchmarking exercises of this nature a picture of what the ‘norm’ is for alliance participants can be established and this pattern used to identify how individual framework elements deviate from this normal pattern. Gap analysis can then be undertaken to investigate likely causes of deviations and these lead to causal analysis (both for positive or negative deviations), providing a basis for a lessons-learned database as part of an organisational learning strategy.

Using the Collaboration Framework visualisation tool for health checks Another way of using the Collaboration Framework is for undertaking a health check on a particular project where a comparison is made of the ‘as-is’ situation against the ‘intended’ position. The process to be followed is similar to the benchmarking hypothetical example. We explain how a health check may be undertaken as follows. At the start of any project it should be possible for the OP and NOPs participating in a collaborative form of IPD to establish the desired, feasible and expected degree of collaboration against the 16 elements. The health check could follow the group briefing and workshop format but with one representative from the OP, design NOP team and delivery team NOP. However, the project owner may prefer several participants from each of the NOP teams if the project delivery team comprises a consortium of several contractors and major sub-contractors – building services for example, or if the design NOP team comprises several design disciplines. The group would establish the baseline ratings for each of the 16 elements through a process of discussion and negotiation to agree on a number, or rating, for each element. It would be likely that scoring each of the 16 elements could take approximately 30 minutes and so a full day to prepare a baseline could be expected. The output from that workshop would be a radar map diagram of the ‘intended’ Collaboration Framework map together with a record of important discussion points that clarify the rationale for the rated numbers and numerous reflections on perspectives that various participants held about the agreed ‘shape’ of the radar map diagram and what that may imply for the project’s delivery. Several similar element-rating workshops could take place periodically through the project delivery cycle to maintain collaborative performance tracking and mapping the ‘as-is’ situation. The result of a hypothetical health check exercise is illustrated in Figure 2.4. Figure 2.4 indicates that there has been some slippage in collaboration ratings for most elements, but at a small level, and with greater gaps for three of four elements. It is unlikely that the ‘intended’ would perfectly match the ‘as-is’ situation. Even if the rating group comprises subject matter experts who are thoroughly engaged and honest in their assessment of each element there is likely to be some level of digression between initial perceptions of a project and then later experiencing the situation actuality during its delivery. Some ground rules would be set for determining what constitutes a significant gap. Perhaps that might be a half-point or one point but the facilitator and group would agree on that limit to ensure that the focus of the reflection is not on ‘winning’ or ‘losing’ ground but on concentrating on producing results for understanding how the collaborative relationship dynamics are actually playing out. The second day of each health check workshop would focus on discussing cause-and-effect links between one or more elements and/or gaps observed to reflect on how they might be linked and ways in which any deficiency might be obviated, or on the desirability of any excess may, perhaps might, be symptomatic of some emerging problem such as ‘gold plating’ (Stingl and Geraldi, 2017). In a software development context, Shmueli, Pliskin and Fink (2015, p380) describe gold plating as occurring ‘when a product or a service has been specified beyond the 31

Derek Walker and Beverley Lloyd-Walker Intended

as-is

Motivation and context 5 Joint governance structure

Mutual dependence and accountability 4.5 4 Transparency & open-book

3.5

Integrated risk mitigation & insurance

3 2.5 2

Pragmatic learning-in-action

Joint communication BIM etc

1.5 1 0.5

Focus on learning & continuous

Substantial co-location

0

improvement

Authentic leadership

Incentivisation

Trust-control balance

Consensus decision making

No blame culture

Commitment to innovate

Common best-for-project mindset/culture

Figure 2.4  Health check results from a hypothetical project

actual needs of the customer or the market.’ The health check de-briefing conversation and group reflection provide valuable organisational learning.

Using the Collaboration Framework visualisation tool for designing delivery systems Research undertaken into alliancing and reported upon by Walker (2016) revealed that in some cases an alliance approach may be discarded due to policy influence, such as competitive tendering. This may occur even though all involved project parties, including the OP, may wish to engage in a collaborative approach on highly complex projects, believing this to be the best available delivery solution. On at least one case from this research, the OP noted that the aim for developing a delivery approach was to arrive at a delivery mechanism that was a near to an alliance as possible but without actually using an alliance agreement contract process. Various elements in the Collaboration Framework could not be viably established at the alliance level. Designing a system in such cases to closely resemble an alliance, but allowing some Collaboration Framework element characteristics to fall short of an alliance norm, is deemed appropriate. The explanation of this attitude by participants can be explained by institution theory. They know the governance constraints (no alliance) but they understand that the alliance norms are what are best for the highly complicated projects that they face. They then use their cultural-cognitive abilities to interpret a compromise that is acceptable. There may be other situations where IPD project participants may feel that they cannot gain sufficient organisational support or access to capabilities to be able to engage in an alliance. This may also require ‘tweaking’ an alliance agreement form to match what can be reasonably expected. 32

Characteristics of IPD

Chapter 10 discusses cultural influences on collaboration in greater depth but in the context of this application of the Collaboration Framework it should be acknowledged that in in certain cultures and at certain stages of industry development (i.e. cultures exhibiting low power distance and low uncertainty avoidance) project owners and IPD teams may find such approaches appealing by appearing to resist a challenge to the status quo of the institution. At times of economic stringency the political dimension may well impose constraints: context is always a contingent factor. In such cases it may be necessary to start with what would be desired and intended and then scale elements back to reflect what is politically or organisationally possible. This is essentially a designing an IPD form exercise as illustrated in Figure 2.5 for a hypothetical project example. The workshop group would first map out what they feel would be an optimum IPD delivery form as the intended form, then undertake a conversation about what is reasonably possible given various constraints that they face and may feel cannot be practicably overcome. The Collaboration Framework becomes useful in this case as a strategic tool for designing an IPD form that lies on a continuum between an alliance and something less formally collaborative in nature.

Reflections on the Collaboration Framework visualisation tool Taking an institutional perspective of the collaboration process using the Collaboration Framework provides further rigour in critical thinking when benchmarking, strategising or reviewing project performance. It highlights both the regulative elements in the framework and the interaction of governance with norms and the cultural-cognitive sense-making processes that take place, which often help explain gaps or deviations between intention and action. It also helps to make sense of how a project identity may be shaped, how group dynamics may operate

Intended

Tweaked

Motivation and context Mutual dependence and accountability Transparency & open-book

Pragmatic learning-in-action

Focus on learning & continuous improvement

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Joint governance structure Integrated risk mitigation & insurance Joint communication BIM etc

Substantial co-location

Incentivisation

Authentic leadership

Trust-control balance

Consensus decision making No blame culture

Commitment to innovate

Common best-for-project mindset/culture

Figure 2.5  Strategically designing a hypothetical project IPD form

33

Derek Walker and Beverley Lloyd-Walker

with a particular culture, and how project participants use their cognitive assets to interpret regulative aspects, given their perceptions of what the project culture expects. The costs of undertaking such analysis would be the actually incurred workshops and opportunity costs of gathering together 3 key participants from each project for 2 days; in the above example, that would be 32 people for two days at the workshop plus a short evening session and the cost of holding the workshop. The benefit of holding such workshops could include: •• •• ••

••

•• ••

General harmonisation of participants’ and organisation’s collaborative capabilities; Opportunities for refining the element measure descriptors to meet the evolving needs of the types of projects undertaken and changes in business and other environmental factors that may influence what is seen as ‘high’ or ‘low’ for each element; Opportunities for refining the identified elements. These elements were based on analysis of interviews of around 50 subject matter experts from two studies (Walker and LloydWalker, 2015; Walker, 2016). Organising the use of this Collaboration Framework should consider customising it to suit the needs of the user, because it was always meant to provide a starting point and was not intended to be a rigid and unyielding system; Opportunities for staff development, because the scope and depth of critical thinking and discussion that the workshops require, would potentially stretch participants because their main debating partners are other high-level professional practitioners. This constitutes a high-level peer review process; Opportunities to unearth, document and contextualise the lived experience of how the projects are managed and developing closer working relationships between participants, thus providing a platform for organisational learning; and At a more matter-of-fact level, the workshops could be viewed as helping to deliver ‘best practice’ as a management tool.

Of course there are other benefits and indeed costs besides those mentioned above. One point that needs to be understood is that most costs and benefits are difficult to monetise and so tangible outcomes such as costs and savings may be identified but intangible costs and benefits such as the cost of confusion and dealing with ambiguity and the benefit of learning are somewhat ephemeral.

Conclusion This section was intended to provide an overview of what IPD may look like in practice. We introduced the institutional perspective as a way of helping to explain how strategy may be translated into action within a collaborative project or programme context. We discussed two frameworks that have been developed to better understand how IPD collaboration may work and how the Collaboration Framework extends this understanding more fully. Appendix 1 of this chapter provides detailed measures that are anchored from very low to very high, enabling the 16 elements of the framework to be assessed against a particular project or programme of projects. We also provided an illustration of how tools such as the Collaboration Framework could be applied in practice. We have found during our research careers that people and organisations are generally highly innovative when they feel they have a good idea to work with and can be very innovative in how they adapt frameworks, models and constructs in light of their practice. 34

Low levels of joint communication would be characterised by poorquality staff interaction, use of firm-specific rather than project-wide processes and ICT systems, and weak cross-team mechanisms for gaining mutual understanding.

Element 4: Joint communication BIM, etc.

Low levels would be characterised by an immature and confused individual firm-specific risk management approach and poorly defined systemic approaches to deal with uncertainty and ambiguity.

Element 3: Integrated risk mitigation & insurance

Low levels would be related to a laissez-faire approach where each participating project team has established its own individual standalone project governance standards. Little coherence in alignment of the whole project delivery organisational processes and structure is evident with few explicit expectations about what success looks like and how to define and measure it.

Element 2: Joint governance structure

Low levels would be related to a hostile environment for collaboration. This may be due to lack of conviction of project participants in the value of collaboration within this project’s context.

Element 1: Motivation and context

Collaboration Framework Element Very low Rating = 1

(continued)

High levels would be characterised by well-integrated processes that are well understood by all participants and advanced communication technologies being used that seamlessly connect all project parties within a particular procurement arrangement.

High levels would be characterised by consistent and integrated risk assessment processes being identified, assessed and mitigated against a project-wide and broader systems-wide impact for the project or network in the case of programmes of projects.

High would be related to an effectively structured, uniform, integrated and consistent set of performance standards that apply across and within the project delivery teams. All participant organisations share a common understanding of how to organise for success and what constitutes valuable project output and outcome success.

High levels would be related to the procurement choice solution being driven by the acceptance of project participants in the logic of a clear advantage being gained by adopting a focus on a supportive and collaborative approach to delivering benefits that align with the values of participants.

Collaboration Framework Element Very High Rating = 5

Appendix 1

Low best-for-project mindset levels are manifested by a higher level of priority for individual benefit realisation at the potential expense of other project team members and the PO.

Element 9: Common best-for-project mindset/culture

Low commitment levels are manifested by inadequate or incomplete linkage of motivation, ability and facilitation for innovation within the context of the procurement form.

Element 8: Commitment to innovate

Low balance is demonstrated by extreme naivety by participants about trusting others implicitly or alternatively by exhibiting high levels of suspicion and/or unreasonable demands for formal and informal control and monitoring that implies a cynical attitude towards trust of others.

Element 7: Trust–control balance

Low levels are revealed when espoused principled values are not demonstrated in action manifested through a gap between the rhetoric and reality of leading teams.

Element 6: Authentic leadership

Low levels would be characterised by firm-specific policy determining that disparate teams are physically located in dispersed locations. There may also be a large visibility gap between project leaders and those at the ‘coal face.’

Element 5: Substantial co-location

(continued)

High best-for-project mindset levels are manifested by a genuine attitude that ‘we all sink or swim together’ and a focus on maximising value to the project (or network in the case of a programme). Contractual arrangements will reinforce pooled gain or pain based on performance measured by KRAs and KPIs.

High commitment levels are manifested by vision, objectives and desire to be innovative with well-considered instruments to measure and demonstrate innovation, motivation through rewards and incentives, and demonstrated high levels of existing absorptive capacity for innovation.

High balance is demonstrated by an innate sensibility to juggle transparency and accountability demands with the need for trust with necessary due diligence. It also demonstrates a professional understanding of the nature of project participant accountability constraints and opportunities for resolving and possibly helping to resolve.

High levels demonstrate consistency in espoused and enacted values that are genuinely principled.

High levels would be characterised by a project-wide policy that attempts to maximise participant co-location, on-site where feasible, including the OP. There would also be high interaction between project leadership groups and the PM and physical deliveryteam members so that engagement enhances communication and mutual perspective.

Low levels of incentivisation is manifested by little emphasis being placed upon encouraging parties to agree to place potential profit and gain/pain in a risk/reward arrangement subject to a wholeof-project outcome performance. KRAs and KPIs are absent or rudimentary.

Element 13: Incentivisation

Low focus on learning and continuous improvement is manifested by actors within collaborative arrangements and a network delivering a project being blind to, and failing to grasp, the potential competitive advantage of applying presented learning opportunities.

Element 12: Focus on learning and continuous improvement

Low consensus decision-making is manifested by a highly hierarchical project team leaders’ leadership style where power and influence determines how decisions are made and where the expected response is that decisions are implemented without question or complaint. It is also manifested by a tendency for a domination of top-down directives being issued as edicts.

Element 11: Consensus decision-making

Low no-blame culture is manifested by a project participant’s high propensity to shift blame from themselves to others. These problems may be attributable to them for unforeseen, unanticipated or unwanted events that impact adversely upon project delivery. A low no-blame culture is also palpable in a tendency to avoid acknowledging potential problem situations in the hope that blame can be attributed to others.

Element 10: No-blame culture

(continued)

High levels of incentivisation are manifested by an emphasis on encouraging parties to agree to place potential profit and gain/pain in a risk/reward arrangement that is subject to a whole-of-project outcome performance. KRAs and KPIs are well developed, provide stretch and challenge, and are sophisticated in their understanding of the project context.

High focus on learning and continuous improvement is manifested by actors within collaborative arrangements and a network delivering a project being alert to and aware of opportunities for improvement, and being successful in grasping competitive advantage through effectively harvesting lessons learned.

High consensus decision-making is manifested by a low level of hierarchical project team leaders’ leadership style where shared power and influence based mainly on expertise determines how decisions are made and where the expected response is that decision proposals are expected to be rigorously tested and debated. It is also manifested by a tendency for the domination of respect for expertise and evidencebased opinion.

High no-blame culture is manifested by a culture of open discussion of problems, unforeseen, unanticipated or unwanted events that may impact adversely upon project delivery. The purpose of a no-blame culture is to achieve wider team participation in collaboration and collective management of problems, and to take responsibility and accountability for developing problem solutions. It may also be manifested by the PO taking ownership of risk elements that other participants are unable to bear rather than force them to accept accountability for such risks.

Low mutual dependence and accountability refers to an inability or lack of desire to acknowledge the potential value of team interdependence and accountability. Participants follow individualistic paths, possibly at the expense of others, and/or do not support a sink-or-swim-together workplace culture, or they actively undermine that culture.

Element 16: Mutual dependence and accountability

Low transparency and open-book approaches to project delivery intensely protect the security of organisations and individuals to gain access to information about cost structures or the basis of project plans. It is often exemplified by the code words ‘commercial in confidence.’ It seeks to hide both good and bad news but this often results in mistrust that undermines collaboration and opportunities for constructive change.

Element 15: Transparency and open book

Low pragmatic learning-in-action is manifested by actors within a network delivering a project failing to translate learning opportunities into actual benefits and competitive action. Failed experiments are punished.

Element 14: Pragmatic learning-in-action

(continued)

High mutual dependence and accountability refers to an ability and keen desire to acknowledge team inter-dependence and accountability in ways that build interteam trust and commitment through actively enhancing a sink-or-swim-together workplace culture that actively counters any actions that may inhibit this culture.

High transparency and open-book approaches to project delivery present opportunities for generating trust by clients and other parties that may access that information. It is a confronting notion that many organisations cannot face. It requires the PO’s authorised probity auditors to have free access to their financial books. Thus, confidence in ethical and legal business conduct is necessary to accept this challenge.

High pragmatic learning-in-action is manifested by actors within a network delivering a project which capitalises on learning opportunities to achieve competitive action. This can be also assessed by the weight that these actors place on the value of experimentation as a way to see issues and solutions in a new light. Failed experiments are valued for their intellectual stimulation in discovering, for example, a better understanding of cause–effect loops.

Characteristics of IPD

Figure 2.3 provides an illustration of a radar figure that visualises the benchmarking of ten alliance projects. Figure 2.4 illustrated the use of this framework for undertaking a project collaborative relationship ‘health check’ for comparing an ‘as intended’ versus an ‘as-is’ assessment of a single alliance that could trigger a valuable reflective conversation. Similarly, Figure 2.5 illustrated how a proposed project IPD approach may be strategically shaped and designed using the Collaboration Framework to map what could be seen as politically or practically feasible for a project delivery approach that may adopt some alliance features but not others to help facilitate greater collaboration that would be the case for example, when using a partnering agreement. The workshop idea of using the Collaboration Framework in this way promotes the development of reflective practitioners (Ayas and Zeniuk, 2001; Raelin, 2007) and this has been argued as a critical way in which innovative organisations enhance their dynamic capabilities (Teece, 2010; 2013). The workshops, if well-documented and thought-through from a knowledge management perspective, could deliver significant organisational learning

References Ayas, K. and Zeniuk, N. (2001). “Project-based learning: Building communities of reflective practitioners.” Management Learning. 32 (1): 61–77. Azim, S., Gale, A., Lawlor-Wright, T., Kirkham, R., Khan, A. and Alam, M. (2010). “The importance of soft skills in complex projects.” International Journal of Managing Projects in Business. 3 (3): 387–401. Battilana, J. and D’aunno, T. (2009). Institutional work and the paradox of embedded agency. Institutional work: Actors and agency in institutional studies of organizations. Lawrence T. B., R. Suddaby and B. Leca. Cambridge, UK: Cambridge University Press: 31–58. Børve, S., Ahola, T., Andersen, B. and Aarseth, W. (2017). “Partnering in offshore drilling projects.” International Journal of Managing Projects in Business. 10 (1): 84–108. Brady, T. and Davies, A. (2014). “Managing Structural and Dynamic Complexity: A Tale of Two Projects.” Project Management Journal. 45 (4): 21–38. Chen, L. and Manley, K. (2014). “Validation of an instrument to measure governance and performance on collaborative infrastructure projects.” Journal of Construction Engineering and Management. 140 (5): 04014006. Crawford, L., Morris, P., Thomas, J. and Winter, M. (2006). “Practitioner development: From trained technicians to reflective practitioners.” International Journal of Project Management. 24 (8): 722–733. Davies, A., Dodgson, M. and Gann, D. (2016). “Dynamic capabilities in complex projects: The case of London Heathrow Terminal 5.” Project Management Journal. 47 (2): 26–46. Geraldi, J. and Arlt, M. (2015). Visuals Matter! Designing and Using Effective Visual Representations to Support Project and Portfolio Decisions. Newtown Square, PA: Project Management Institute. Gil, N., Miozzo, M. and Massini, S. (2012). “The innovation potential of new infrastructure development: An empirical study of Heathrow airport’s T5 project.” Research Policy. 41 (2): 452–466. Gioia, D. A., Patvardhan, S. D., Hamilton, A. L. and Corley, K. G. (2013). “Organizational Identity Formation and Change.” The Academy of Management Annals. 7 (1): 123–193. Gioia, D. A., Price, K. N., Hamilton, A. L. and Thomas, J. B. (2010). “Forging an Identity: An Insideroutsider study of processes involved in the formation of organizational identity.” Administrative Science Quarterly. 55 (1): 1–46. Ibrahim, C. K. I. B. C. (2014). Development of an assessment tool for team integration in alliance projects. PhD Thesis, Department of Civil and Environmental Engineering. Auckland, New Zealand, The University of Auckland. Mullaly, M. (2014). “The role of agency in project initiation decisions.” International Journal of Managing Projects in Business. 7 (3): 518–535. Mullaly, M. (2015). Exercising Agency – Decision Making and Project Initiation. Farnham, UK: Gower Publishing. Muzio, E., Fisher, D. J., Thomas, R. and Peters, V. (2007). “Soft skills quantification (SSQ). for project manager competencies.” Project Management Journal. 38 (2): 30–38. Oxford (2011). The Concise Oxford Dictionary. Oxford, UK: Oxford University Press. Pellerin, C. J. (2009). How NASA Builds Teams - Mission Critical Soft Skills for Scientists, Engineers and Project Teams. Hoboken, NJ: John Wiley & Sons.

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Derek Walker and Beverley Lloyd-Walker Pich, M. T., Loch, C. H. and Meyer, A. D. (2002). “On Uncertainty, ambiguity, and complexity in project management.” Management Science. 48 (8): 1008–1023. Raelin, J. A. (2007). “Toward an epistemology of practice.” Academy of Management Learning & Education. 6 (4): 495–519. Ross, J. (2003). Introduction to project alliancing. Alliance Contracting Conference, Sydney, 30 April 2003, Project Control International Pty Ltd: 43 pp. Scott, W. R. (1987). Organizations: rational, natural, and open systems, Englewood Cliffs, NJ, Prentice-Hall. Scott, W. R. (2001). Institutions and organizations, Thousand Oaks: CA; London: Sage. Scott, W. R. (2014). Institutions and organizations, Fourth Edition, Thousand Oaks: CA; London, Sage. Shmueli, O., Pliskin, N. and Fink, L. (2015). “Explaining over-requirement in software development projects: An experimental investigation of behavioral effects.” International Journal of Project Management. 33 (2): 380–394. Stevenson, D. H. and Starkweather, J. A. (2010). “PM critical competency index: IT execs prefer soft skills.” International Journal of Project Management. 28 (7): 663–671. Stingl, V. and Geraldi, J. (2017). “Errors, lies and misunderstandings: Systematic review on behavioural decision making in projects.” International Journal of Project Management. 35 (2): 121–135. Teece, D. J. (2010). “Business models, business strategy and innovation.” Long Range Planning. 43: 172–194. Teece, D. J. (2013). Competing through Innovation: Technology Strategy and Antitrust Policies. Cheltenham, UK: Edward Elgar. Walker, D. H. T. (2016). Understanding the alliance target outturn cost process and its implications. Melbourne, Australia: Centre for Integrated Project Solutions, School of Property, Construction and Project Management, RMIT University: 77 pp. Walker, D. H. T., Davis, P. R. and Stevenson, A. (2017). “Coping with uncertainty and ambiguity through team collaboration in infrastructure projects.” International Journal of Project Management. 35 (2): 180–190. Walker, D. H. T. and Harley, J. (2014). Program alliances in large Australian public sector infrastructure projects. Melbourne, Australia: Centre for Integrated Project Solutions, RMIT University: 86. Walker, D. H. T. and Lloyd-Walker, B. M. (2013). Making Sense Of Collaborative Forms Of Relationship Based Construction Procurement. Engineering Project Organization Conference, Devil’s Thumb Ranch, Colorado July 9–11, 2013, July 9–11, Carrillo P. and P. Chinowsky, Engineering Project Organization Society: 15pp. Walker, D. H. T. and Lloyd-Walker, B. M. (2014). “The ambience of a project alliance in Australia.” Engineering Project Organization Journal. 4 (1): 2–16. Walker, D. H. T. and Lloyd-Walker, B. M. (2015). Collaborative Project Procurement Arrangements. Newtown Square, PA: Project Management Institute. Walker, D. H. T. and Lloyd-Walker, B. M. (2016). “Understanding collaboration in integrated forms of project delivery by taking a risk-uncertainty based perspective.” Administrative Sciences. 6 (3): 17pp. Walker, D. H. T. and Rahmani, F. (2016). “Delivering a water treatment plant project using a collaborative project procurement approach.” Construction Innovation. 16 (2): 158–184.

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3 THE GLOBAL STATE OF PLAY OF IPD Derek H. T. Walker and Steve Rowlinson

Introduction This chapter concentrates on various global integrated project delivery (IPD) forms known to us at the time of writing this book. IPD forms evolve, and as we saw in Chapter 2 in the application of the Collaboration Framework as a procurement strategy design tool, a very wide range of collaborative integrated project delivery (IPD) forms may be ‘created’ to suit particular purposes. This chapter builds on Chapter 1 Table 1.2 that contrasted ten characteristics of IPD with non-IPD forms to provide a more extensive description of IPD forms from the perspective of how they have evolved and are evolving in a number of selected countries across the globe. In this way we intend to provide readers with a well-informed global sense of where this field is heading and how and why that trajectory is occurring. The two main questions explored in this chapter are: 1 2

To what extent is IPD and alliancing being adopted and adapted globally? What is influencing its adoption and/or adaptation?

The chapter begins with a brief explanation of what relational means with respect to IPD-alliancing. This is followed by a section that closely examines project delivery from an integration and relationship perspective so that IPD forms may be mapped within a range of integrated relationship delivery forms. This leads to a section that outlines the global state of play towards the end of the 2010s period followed by discussion of why IPD has been embraced more readily in some countries and/or regions than others. Finally we summarise the chapter.

What do we mean by relational? IPD forms are highly relational in their core values. This term ‘relational’ needs a little more explanation to precisely understand its foundational principles. It is important to avoid confusing IPD with other project delivery forms that embrace coordination of separate disciplinary teams seen in many traditional project delivery forms, such as variants of the integrated design and build/ construct (D&C) approach. This begs a question about the extent to which intensity of relational project delivery forms impact project outcomes (rather than output as specified). The client 41

Derek Walker and Steve Rowlinson,

(project owner) may get what was asked for but not what was needed to be delivered. This implies that the process of scoping and requirements specification may be deficient in most current forms of project delivery. Additionally, we may question how various forms of project delivery have evolved out of the Build Own Operate Transfer (BOOT), Private Finance Initiative (PFI) and Turnkey forms to be more broadly known these days as public–private partnerships (PPP). Are PPPs genuine IPD forms? What about joint ventures between contractors delivering projects – are these genuine IPD forms as well? Project delivery choices and their rationale have been studied for decades. During the early 1990s the International Council for Building, formally known as the ‘Conseil International du Bâtiment’ (CIB)1 commissioned the working group W092 on construction procurement with Steve Rowlinson as co-coordinator. It held its first conference in Zagreb, Croatia in 1990. One of the more important outcomes from that conference working group meeting was a book (Rowlinson and McDermott, 1999) that outlined various project procurement forms as well as other chapters that expanded on the rationale for various project delivery forms. Earlier in that decade, another seminal construction-oriented project procurement book had been published that was dedicated to the topic of procurement (Masterman, 1992) that has been updated (for example in edition 2 of Masterman, 2002). Other publications that trace an interest in project procurement were short report-style books published through professional associations (Franks, 1984; Nahapiet and Nahapiet, 1985). Chapters or sections in books on procurement have been evident in the construction management literature since the earlymid-1990s (Walker, 1993; Harris and McCaffer, 1995; McGeorge and Palmer, 1997) with many of this era of books updated with editions running to edition 7 for example in Harris and McCaffer (2013) and edition 6 for Walker (2015). Much of the earlier discussion on procurement systems related to traditional approaches assuming that the client hired a design leader as project superintendent with some options that comprised forms of design and construct. Additionally, this literature had a high focus on contract forms and conditions, particularly risk and design change management, rather than relationships between participants. However, recognition of the advantages of ‘buildability’ or ‘constructability’ had been evident from a study into partnering undertaken by the Construction Industry Institute (CII, 1996) that stimulated interest in the advantages of relationships between project delivery participants (Testi, Sidwell and Lenard, 1995; Sidwell and Mehertns, 1996; Walker and Sidwell, 1996). If relationship-based project procurement and delivery is not a new concept, how did it evolve into a project delivery context and how is it changing? One of the seminal authorities on relational contract theory is Macneil (1978; 1985). He was an early thinker who made significant theoretical advances on the nature of transactions between people and business entities beyond the immediacy of a discrete short-term transaction to buy something. However, we also need to acknowledge related interdependence in decision-making, uncertainty and contingency theory work undertaken by the Tavistock Institute. Examples include Cartwright and Zander’s (1960) early work on group dynamics and Burns and Stalker’s (1961) ground-breaking innovation theory development. Macneil was interested in the nature of the relationship between people and business entities when the purchase transaction is centred on a complex system of components such as a building or infrastructure, e.g. a rail line, roadway, airport or hospital. A number of scholars have applied these ideas in a construction-project delivery context to explain the role of behaviours of parties undertaking business transactions while jointly delivering a project. Memon (2017, Section 2.2) provides a well-articulated explanation of the origins and significance of relational contracting theory. The main point to be taken from the relational contracting literature is that for complicated or complex projects, such as building an underground railway or facilities on brownfield site locations, the primary focus is on the quality of the relationship between the client, design team, contracting parties and other relevant external 42

The global state of play of IPD

stakeholders that enables them to collaborate to coherently deliver value through the project and not just to focus on the content of contractual terms. Until recently, scholars and practitioners looked at construction-project delivery from a product rather than service perspective. The reconceptualisation of the purpose of project delivery, particularly in construction, has taken a ‘value’ turn. This adopts a new direction in marketing. The intended deliverable moves from an output to an outcome in what is often referred to as taking a service rather than production-logic perspective (Grönroos, 1990; Grönroos, 2011). The traditional project delivery focus has been on contract forms to deliver a product outcome such as a building, an infrastructure facility (such as road or rail). Performance metrics tended to revolve around the ‘iron triangle’ delivery of cost and time and quality in terms of fitness for purpose (Atkinson, 1999; Andersen, 2008). The perspective focused on what these types of project delivery outcome provided rather than looking at what was intended to be achieved through the procurement process delivering the project. This has radically changed the way that we perceive project delivery. The goal of more relational type delivery forms focuses on project outcome, and the value or benefit it generates by moving beyond the iron triangle (Andersen, 2008; Bradley, 2010; Toor and Ogunlana, 2010; Zwikael, 2016). At the same time, groups such as W092 have collectively shaped the delivery process focus over recent decades away from just ‘getting the job done’ to one of satisfying influential and other valid stakeholder needs and concerns (Engwall, 2003; Eskerod, Huemann and Savage, 2015), conducting the project ethically (Helgadóttir, 2008; Bredillet, 2014; Lloyd-Walker and Walker, 2017) and considering organisational learning and innovation as an important and valued project deliverable (Davies, MacAulay, DeBarro and Thurston, 2014; Love, Teo, Davidson, Cumming and Morrison, 2016).

Taking an integration and relationship perspective on project delivery There is no shortage of literature that describes various forms of project procurement and delivery and this goes some way to explain varying levels of integration between the main participants: the project owner (PO) or owner participant (OP) representative; the design team; and contractors and suppliers delivering the project. Sidwell (1982), Rowlinson (1988) and Ireland (1983) in their PhDs produced seminal work that linked the organisational form of different procurement systems to performance and client criteria. From this work, subsequent authors developed these typologies further. The main contribution of their work was to bring general management theory into the construction project-management field. In doing so, they brought to the attention of construction management researchers the concepts of integration, differentiation, performance measurement and contingency views. Indeed, they built on the work of the Tavistock Institute, Mintzberg (1979), Woodward (1958) and others in broadening the scope of research into construction management and particularly procurement systems. Early text books such as Masterman (1992) had built upon research undertaken by various scholars engaged in the Organising and Managing Construction, CIB W-65 workgroup with Rowlinson during the mid-to-late-1980s, that later developed into the CIB working group W092. These W092 researchers are often cited by scholars drawing upon that seminal work. Masterman (1992) discusses relational forms of procurement in terms of separated, integrated, management-oriented and discretionary procurement systems. Other scholars and organisations have also described and detailed project delivery forms that have developed since Masterman’s (1992) seminal work. Table 3.1 summarises various project delivery forms from the integration and relationship intensity perspective. Naturally, individual projects will vary from this ‘norm’ depending on the personalities involved and organisational influence as discussed in later book chapters. Figure 3.1 illustrates our estimated integration and relationship intensity ratings as a guide only. 43

Example

Facilities/assets are procured through a design-bid-build (DBB) basis, either through fixed (or variable with inflation adjustment) price/time contracts or variants of cost plus work where the contractor does as instructed with an agreed profit and overhead mark-up. The main rationale and focus is risk acceptance, DBB = contractor acceptance and cost plus = PO acceptance.

Masterman treats this category from a design and construction perspective. Examples are cited as various forms of design-build, often referred to as design and construct (D&C), but he also includes Turnkey and other forms of package deals. These are variously known as within three broad categories. Turnkey moved from design, finance and transfer ownership (the key) to forms of Build Own, Operate, Transfer (BOOT). During the 1980s a Private Finance Initiative (PFI) form emerged in the United Kingdom (UK) that ranged from BOOT to Build Own Operate (BOT). From the 1990s the PFIs transformed into PPP which resembled BOOT.

These projects are generally delivered on a fee-for-service basis with either a design-led consortium providing the management of the design and delivery process or the contractor doing so. The client engages the management contractor as an agent and pays direct costs and a fee for service. This form may be termed engineering procurement contracting (EPC), construction management or Management Contracting.

General form

Separated

Integrated

Management-oriented

Table 3.1  Summary of project delivery forms in terms of integration and relationships.

Integration is limited to the design and delivery business units within the EPC apart from limited PO involvement at the briefing stage. The PO and EPC entity are largely physically separated.

The common feature of these delivery forms is integration of financing, design and delivery, either upon completion of the project or at an agreed concessionary period. For BOOT and PPP in particular the PO procured a service not a product.

Low, the client is often reliant on the architect (or engineer for infrastructure). The contractor performs a passive role.

Integration intensity

Low, the power, information and influences and asymmetries between the OP, design leader and contractor is stark. Teams are wary of opportunistic behaviour. The relationship intensity in these forms is highly transactional between participants. Parties such as financiers are involved at project initiation to take a fee or to later sell their stake and then depart the consortium. The asset is usually delivered on a form of D&C. A special-purpose vehicle as the owner operates the facility for the government agency on a service fee basis. The client is highly engaged at the briefing stage. After that stage, the main engagement is between the design and contracting business units under the EPC entity.

Relationship intensity

According to Masterman (2002, p131) ‘a discretionary procurement system is an administrative and cultural framework into which any procurement system(s) can be incorporated, thus allowing the client to carry out the project by imposing a very specific management style, or company culture, while at the same time enabling him/her to use the most suitable of all of the available procurement methods.’ This form could also include framework agreements (FA) where an agreed fee structure is tendered and accepted for pre-specified types of work to be done. Joint ventures (JVs) also fit this category.

This delivery form follows the model adopted first by the British Airports Authority for the Heathrow Terminal 5 building and then adapted for the London Crossrail programme and recently for the Thames Tideway Tunnel.

There may be design alliances, project alliances or programme alliances but they all follow shared values and characteristics.

IPD is contracted at three levels. We focus here on its most intense form where a multi-party contract binds the OP, design and contractor participants to deliver the project.

Discretionary

Integrated supply chain

Alliancing

IPD – Multi-party contract (NASF, COAA, APPA, AGC and AIA, 2010)

Integration is often very intense between the OP, designer and contractor, extending to major sub-contractors.

The OP, design teams and delivery contractors are highly integrated.

The integration of the sophisticated OP, the design teams, main contractors and the sub-contracted work package contractors is intense.

This form relies on a partnering agreement and so the integration intensity varies. FAs vary in terms of integration intensity. Likewise for JVs.

Partnering is a voluntary arrangement even a contract that embeds partnering is used. Therefore, the quality of engagement and relationship intensity is not guaranteed. While there is a relationship bond forged through the FA selection process it also varies in intensity. Likewise for JVs. The relationship intensity between the OP, the design teams, main contractors and the sub-contracted work package contractors is intense. The engagement and relationship intensity between these participants is intense. The relationship between the OP, designer and contractor, extending to major sub-contractors, is also intense.

Derek Walker and Steve Rowlinson, Integration intensity

Relationship intensity

Seperated - DBB 4.5 Alliancing

IPD multi-party contract

4 3.5 3 2.5

Integrated D&C

Integrated Turnkey

2 1.5 1 0.5

Integrated supply chain

Integrated BOOT/PPP

0

Management contracting

Discretionary JV

EPC

Discretionary FA Discretionary Partnering

Figure 3.1  Procurement form integration and relationship intensity

Separated procurement systems comprise the traditional design-bid-build (DBB) approaches. Delivery forms such as DBB obviously involve some integration of the OP, design and contractor entities but it does so only in a highly fragmented and disjointed manner. This is due to the design team being at the centre of the triad but keeping a distance between the OP and contractor. The designer interacts with the OP at the early stage to develop the brief. After tendering the project to a group of competing contractor bidders, the design leader often takes on the role of supervising agent on behalf of the PO, in effect assuming the role of the OP. The integration between OP, designer and contractor is fragmented and loosely integrated (likewise between the contractor and supporting sub-contractors and suppliers) and the relationship chain is similarly loose and weak. These days there may well be closer integration through the use of building-information modelling (BIM) to maintain a central design database that provides design, construction and facility management information and other linked documents (Aranda-Mena, Crawford, Chevez and Froese, 2009; Arayici, Coates, Koskela, Kagioglou, Usher and O’Reilly, 2011; Khosrowshahi and Arayici, 2012). However, DBB does not automatically develop greater intensity of integration and relationship engagement. It is for this reason that we rate a low for both scales illustrated in Figure 3.1. Integrated forms include various D&C and Turnkey as well as the BOOT/PPP variant forms. D&C may use either a straightforward design-build approach or use a novated D&C approach. Novated D&C has a PO-appointed design team work with the OP to develop a brief translated into a concept design that a successful D&C consortium bidder will develop further (Chan and Tam, 1994). The design and delivery part of the OP, designer and delivery entity triad may be closely integrated but not all three triad entities will co-locate or intensely collaborate as an integrated team. Similarly, the relationship intensities between parties may be 46

The global state of play of IPD

loose and weak and it is for that reason we rated them as being at the midpoint of a five point low to high intensity scale. Turnkey offers a ‘black box’ integrated delivery form where deals are made between the designer teams, contractors, financiers and other groups that are needed to stitch together a ‘one-shop’ deal so that the PO specifies the need in terms of a brief then seeks responses from several Turnkey operators (Ahola, Laitinen, Kujala and Wikström, 2008). Often the client is somewhat locked into the specified brief and any changes of mind or design details can become a costly negotiation exercise (Masterman, 2002). Other integrated forms include the evolutionary progression from Turnkey to the nest of systems within the BOOT group. This procurement form is service-oriented. The key issue is that a product (the facility) is not the deliverable but the outcome service. Instead of delivering a road or a train line this procurement form delivers a service to provide transportation for a set concession time, often around 20 or more years, that allows cost retrieval based upon revenues from ‘the service’ by the facility’s end users. The BOOT family of systems include a build own operate (BOO) approach in which there is no set end point for a road project. This may mean that a road is built and tolls are paid either to the government transport authority or some other entity authorised under a concession to harvest tolls. The BOOT form adds a condition to transfer the asset at some specified time and in a specified condition at transfer. This is very similar to public–private partnerships (PPPs) where the PPP ‘owner-instigator’ is usually a government agency. PPPs evolved from the Private Finance Initiative (PFI) system that emerged from the 1980s in the UK (Grimsey and Graham, 1997). All these integrated forms are only integrated to a limited point. Often the integration, and relationship intensity, is limited to two parties within the OP design team and contractor triad. This locks out valuable context and operational knowledge, to inform design and delivery project decision-making. A hands-off PO or OP approach to project delivery starves the outcome of knowledge about what the values of the project outcome should be. This is a point that is stressed by Fischer, Khanzode, Reed, and Ashcraft (2017) who stress the need for an intelligent and sophisticated client to be part of the project delivery triad. PPPs and BOOT projects have a danger that the PO/OP will assume that rigid specification of the brief without a strong and knowledgeable engagement, resulting in inadequate engagement to ensure that the level of clarification of the brief is meaningful (Walker, 2016). Management-oriented forms deliver early contractor involvement in order to provide valuable front-end and buildability advice (Mosey, 2009; Scheepbouwer and Adam, 2011). The construction management (for a fee) form of delivery provides a pragmatic results-oriented outcome deliverable (McGeorge and Palmer, 2002). However, this may result in overlooking the aesthetic and operational performance perspective if ease of construction and cost of delivery decision-making criteria dominate. The EPC form may be perhaps more integrated than the contractor-driven ‘construction management’ approach, especially for engineering projects, but there still may be dislocations and integration misfits as well as relationship challenges due to the tendency for EPC to be delivered through outsourcing based on cost rather than gathering together the best team to deliver the project (Walker and Lloyd-Walker, 2015; Rahmani, Khalfan and Maqsood, 2016). Masterman (1992; 2002) devotes the category ‘discretionary’ to project and strategic partnering and argues that it can be added as a behavioural framework to any procurement approach. Partnering at the project level requires parties to engage in a workshop or series of workshops to develop a partnering charter and to make every effort to adhere to its aims and objectives. Protocols are also developed to guide participants and there has been much literature published on the concept (for example see CII, 1996; Construction Industry Institute Australia, 1996; Anvuur 47

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and Kumaraswamy, 2007; Arup, 2008; Eriksson, 2010). It does have a fundamental drawback in that it is aspirational and mainly voluntary, so the agreement lacks teeth if any participant engages in backsliding or opportunistic behaviours (Green, 1999; Bresnen and Marshall, 2000; Ng, Rose, Mak and Chen, 2002; Bresnen, 2003). Strategic partnering attempts to provide longerterm incentives for collaboration and a joint vision of project success being a win-win prospect because the strategic partnering agreement binds the PO and other participants (usually on a D&C or management contracting arrangement) to longer-term commitments (Lendrum, 2003). Thus, if one project provides disappointing outcomes then others are likely to be more favourable, partially due to opportunities for organisational learning (Lendrum, 2003; Gibbs and Humphries, 2009). Strategic partnering sometimes takes the form of framework agreements (FAs) where a PO may invite organisations to participate in projects on an agreed schedule of engagement rates. This enables a programme of work to be delivered through several FAs that allow speed and simplification of tendering for many small projects or for larger projects that can be shared among the FA entities to optimise outcomes for both the PO and FA entity over the long term (Office of Government Commerce, 2008; Constructing Excellence, 2012; Department of Health, 2012). A JV is a consortium of firms that collaborate and is usually formalised by a specific JV contract agreement that specifies limits and scope of collaboration. JVs may operate within any procurement form. JVs may undertake traditional delivery forms where each JV participant has a niche set of capabilities or shares the risk on large or complex projects. Similarly, JVs may undertake activities within a BOOT/PPP-type project form. They also vary significantly in their level of collaboration and relationship intensity (Kogut, 1988; Swierczek, 1994; Bing, Tiong, Fan and Chew, 1999; Johannes, 2004). The integration intensity level of JVs and the relationship intensity between JV participants vary but are generally high. However, integration and relationship intensity with the design team and OP participants in a project varies with the project delivery form. Integrated supply chain approaches require a highly sophisticated OP. Often these may be seen as instigated by special-purpose government agencies. One clear early example of this approach is derived from the British Airport Authority Heathrow Terminal Five project (T5) which was a multi-billion pound mega-project (Doherty, 2008). It is clear from numerous research papers on that project that the T5 agreement involved very high levels of collaborative integration of the OP, design and delivery team (contractor and first-tier sub-contractors) and that the relationship intensity through the contract form and informal interactions was very high (Brady, Davies, Gann and Rush, 2007; Gil, Pinto and Smyth, 2011). T5 led to the application of lessons learned about integration and relationship development throughout the supply chain on the London Olympic Games megaproject (Brady and Davies, 2014) and then later on the London Crossrail programme and Thames Tideway Tunnel project (Davies et al., 2014). Several authoritative works have emerged that explain IPD. A recent book provides, though almost exclusively from the USA perspective, a detailed and current state-of-the-art, very readable description of IPD theories, practice and insights into the USA experience of IPD (Fischer et al., 2017). The authors are reflective practitioners who understand the value of explaining context to readers who may be partially familiar, or completely unfamiliar, with the IPD concept. It is a book that is worth reading and in its preface, on page xxiv, it provides a quote from one of the authors, Professor Martin Fischer, succinctly expressing implications for a relational approach to project delivery, IPD: A high-performing building can only be achieved through a building with integrated building systems, which can only be produced through an integrated process, which depends on an integrated team with the right people, which needs 48

The global state of play of IPD

integrated information, i.e., BIM+ to function effectively and efficiently. Simulation and visualization are the primary ways in which BlM+ informs the integrated team. Collaboration and co-location are the primary ways that allow the integrated team to integrate processes. Production management methods enable the productive design, fabrication, and construction of the integrated building system. Outcome metrics define the performance of the building and validate the integrated building system. All of this is supported by the appropriate agreement or framework. IPD emerged from innovations to the lean-construction management concept that has had its primary focus on delivery efficiency and effectiveness (Ballard and Howell, 2002; Koskela and Ballard, 2006; Ballard, 2008). The notion of waste was extended from material waste to management effort, rework and design information integration waste (NASF et al., 2010). A number of studies on IPD, including individual and comparative case studies (American Institute of Architects – AIA California Council, 2007; American Institute of Architects, AIA Minnesota and School of Architecture University of Minnesota, 2010; Cohen, 2010; Pishdad-Bozorgi, 2016) clearly demonstrate that at the highest level of IPD that integration of teams and information that they use is very high and that the required relational engagement is also very high. IPD involves the OP, the design team and contractor together with their first-tier sub-contractors, although the sub-contractors often do not share in any pain/gain-share arrangements (Walker and Lloyd-Walker, 2015; Fischer et al., 2017). Another strong influence in shaping IPD has been the way in which BIM has been a catalyst in changing project processes and attitudes. BIM is not a 3D model but is in fact a process for storing and distributing information about the facility that is to be constructed and used. Thus, BIM has acted as a change agent that allowed IPD to develop by stimulating the development of a common data environment (CDE) that not only stores information from all participants but updates that information constantly and notifies participants of changes and so alerts them to the implications for their own information contributions. Hence, the process of IPD has been enabled through the CDE and a range of other digital tools and resources that take us beyond the concept of alliancing and into the most intense levels, thus far, of integration and collaboration. Additional facilitators of this include visualisation of construction projects, cross-discipline and cross-firm working from the same data set in developing design and the integration of design documents for planning building operations (Aranda-Mena et al., 2009; Fischer and Drogemuller, 2009). Co-location of the OP, design team and contractor delivering the project in a ‘big room’ also aids intense levels of integration and assists in coordination (Cohen, 2010; Ballard and Tommelein, 2012; Fischer et al., 2017). Lahdenperä (2012) provides one of the most comprehensive and readable accounts of the evolution of alliancing. He traces its origins from Japan’s ‘gentlemanly principles (tradition)’ as part of the lean manufacturing and kaizen (continuous improvement) concepts to partnering in the USA and UK, then to alliancing via oil and gas industry projects in the 1980s. Extensive use of alliancing has been made in Australia and New Zealand from the 1990s to the present time and more recently it has been used in several European countries (Lahdenperä, 2012, p62). An extensive body of literature is emerging from Australia on alliancing (Rowlinson and Walker, 2008; Davis and Love, 2011; Walker and Lloyd-Walker, 2015; Walker, Mills and Harley, 2015) and New Zealand (Vilasini, Neitzert, Rotimi and Windapo, 2012; Ibrahim, 2014). All the literature demonstrates that alliancing generally delivers very high levels of project-team integration between the OP, design and construction delivery participants and that the level of relationship building intensity and collaboration is very high. Having broadly illustrated the evolution of IPD in its many guises and intensities we will look at how the IPD variants are applied in a sample of countries in North America, Europe, Australasia and Asia. 49

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Global state-of-the-art perspective on IPD-like forms of project delivery In this section we have investigated the researcher literature into the application of project delivery systems throughout the world to gain additional insights to that presented in the previous section. Our aim is to present a more global view of how relationship-based project delivery is currently evolving. We start our global journey at the UK, and head westward.

The United Kingdom (UK) The UK has adopted and adapted various forms of partnering for many decades. One early example is the strategic partnering arrangements that governed the construction procurement of Marks & Spencer (M&S) stores and also their fit-outs by the construction group Bovis from the 1920s onwards (Cooper, 2000) using their management contracting model in which a prime cost sum plus a management fee was negotiated and savings on that estimated prime cost sum went to the project owner and not the contractor. Winch notes that during the 1980s when M&S began to develop a significant number of new builds and expansion on the European continent, it moved towards a more traditional, though still with a design-build basis, approach that involved deeper integration of the PO with consultants and Bovis (2004, pp118–120). Another move towards integration and greater collaboration was demonstrated with the New Engineering Contract (NEC) although the 2005 and 2013 updated version NEC3 is more akin to an umbrella system of contracts. NEC4 was released in 2017 as a draft or preliminary form of contract for forming alliances. It is interesting to note from the NEC3/4 Guidance Notes (URL https://gmhplanning.co.uk/nec-guidance-notes) that many of the comments about clauses, particularly to do with trust accountability and responsibility, etc. are moving closer to the project alliance agreements used in Australia and New Zealand. This website states it is a trusted source for a number of major players in this area that have been involved in projects, i.e. T5 and Crossrail. The video www.youtube.com/watch?v=vrcQtNi2Soc briefly explains NEC4 over a four-minute video clip. The NEC contract forms have been developed over some 25 years or so according to the NEC official website www.neccontract.com/About-NEC/History-Of-NEC. FAs have also been used in the UK for several decades (Khalfan and McDermot, 2006). FAs, according to the Manchester Business School: . . . are similar to strategic partnering in that a client selects certain suppliers to supply services for a defined period, and there is a mutual intention to improve the quality of relationships and of performance over that time. The actual works will not be defined at the start of the period but once a project is defined there is a secondary selection process to determine which firm(s) will carry it out. Framework arrangements should be distinguished from framework contracts; in the latter, the relationship is purely contractual with no commitment to mutual improvement. The UK, particularly, has used this form of collaboration. (2009, p9) FAs have been used by local councils as reported in several case studies by Khalfan and McDermot (2006). The advantage is that for smaller-scale project work it is possible to have negotiated with several organisations so that, in maintenance and emergency situations, such as a burst water or sewer pipe, they can be rapidly repaired without a lengthy tendering and negotiation process being faced at times of crisis.

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The NEC4 contract form evolved from experience gained by UK contractors, POs and design consultants on several landmark projects that could be described as vanguard projects: the Heathrow Terminal 5 project, Crossrail, The London 2012 Olympics and more recently High Speed Rail 2 (HS2). Vanguard projects are ones in which innovation becomes a stated project objective and it is clear that a significant expectation is that participants intend to learn and improve through undertaking those projects either by reacting to situations to learn (Brady and Davies, 2004) or by purposefully creating new products through experimental projects (Frederiksen and Davies, 2008). T5 demonstrated many advanced aspects of the purposeful establishment of a contract to fully engage the PO and other non-owner alliance participants (NOPs) such as the design teams, contractors and supply chain suppliers and sub-contractors as well as the facility operators (Doherty, 2008). Crossrail extended this concept, partially under the influence of Andrew Wolstenholme, the former T5 construction programme director and members of his T5 team that moved from T5 to Crossrail and onto other mega-projects in the UK (Caldwell, Roehrich and Davies, 2009; Davies, Gann and Douglas, 2009; Davies and Mackenzie, 2014; Davies, Dodgson and Gann, 2016). These mega-projects should perhaps be termed programs rather than projects as they involve a series of interlinked and interlocked projects within an overarching program of works. They also tightly link the supply chain through formal strategic arrangements to work together to improve performance through innovation and closer integration and knowledge sharing (MacAulay, Davies and Dodgson, 2018).

North America – The United States of America (USA) and Canada The USA has been seen to be an early initiator of relationship-based project delivery with its early uptake of the quality management and collaboration systems introduced to Japan, referred to as ‘gentlemanly principles’ of tradition and later re-introduced to the USA in the 1980s as partnering (Lahdenperä, 2012). Lahdenperä’s paper provides a map of the world in which the various influences of project integration and collaborative work evolved. This reveals an interesting story of knowledge gained and lost and re-formulated again. His paper shows the project-partnering influence from 1988 that is also supported by the CII study on partnering (CII, 1996), and that the evolution of project alliancing in Australia and New Zealand subsequently influenced the USA when it adopted its direct adaptation of that concept for its IPD in its Integrated Form of Agreement (IFOA) (Lahdenperä, 2012). This development is also documented and acknowledged by those that adapted alliancing to meld with aspects of lean construction (Ashcraft, 2010; 2011). IPD has been reported as occurring at three levels of intensity, with the highest level closest in nature to project alliancing as practised in Australia (NASF et al., 2010). Readers who are interested in this link between lean construction, supply chain management and alliancing may refer to Chapter 17 of this book. Another good source for understanding how IPD is undertaken in the USA, which, while highly USA-centric, does explain IPD in the USA context extremely well is the book by Fischer et al. (2017). Case study accounts of IPD on the Cathedral Hill Hospital (CHH) in San Francisco is provided by Heidemann and Gehbauer (2011) and several other case studies of IPD (Lichtig, 2005) in papers and others are published in reports (Cohen, 2010) in the USA but also in both the USA and in Canada (American Institute of Architects et al., 2010; Cheng, Allison, Dossick and Monson, 2015). Lean methods are also used with increasing frequency in Canada, including versions of the IFOA.

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Australia and New Zealand There are ample sources of literature about studies of alliancing as an IPD form in both Australia and New Zealand. Early alliance projects such as the National Museum of Australia have been published in journal papers (Walker, Hampson and Peters, 2002; Hauck, Walker, Hampson and Peters, 2004) and extensive discussion in a book (Walker and Hampson, 2003). Other literature from this region highlights case studies (Young, Hosseini and Lædre, 2016) as well as theoretical concept papers (Cheng, Li, Love and Irani, 2004; Love, Mistry and Davis, 2010; Davis and Love, 2011), reports of studies (Walker and Harley, 2014; Walker, 2016) and results from surveys (Wood and Duffield, 2009; Walker and Lloyd-Walker, 2015; Walker et al., 2015; Walker and Rahmani, 2016; Manley and Chen, 2017). These provide insights into how alliances operate and perform from both a narrow time/cost perspective but also from a learning and innovation-diffusion perspective and from an ethics perspective (Lloyd-Walker and Walker, 2017). Additionally, there is a case study of an alliance that was formed within a PPP project (Jacobsson and Walker, 2013; Walker and Jacobsson, 2014). There is also a growing body of literature about alliances in New Zealand taking a leanconstruction perspective (Vilasini et al., 2012; Vilasini, 2014) as well as from an alliancingteam integration perspective (Ibrahim, Costello and Wilkinson, 2013; Ibrahim, 2014; Ibrahim, Costello, Wilkinson and Walker, 2017). Much of this book draws upon insights of alliancing in Australia; readers may find much rich data including quotes from alliance experts and case study contextual information in many of the chapters in this book.

Southeast Asia and China A number of countries, such as Singapore, Malaysia and the autonomous region of Hong Kong, have been steeped in the colonial system promulgated by the UK and which has changed a little over the past five decades. Hence, many of these Commonwealth countries have followed the traditional procurement route that was separated and driven by the professional silos of the colonial professions. Other countries were influenced in different ways by different systems such as those in the US and Japan. Currently, Hong Kong and Singapore are moving in the direction of IPD but with varying levels of achievement. In contrast, China is still, in the main, a demand economy that is under central government control and the construction industry abounds with state-owned enterprises (SOEs) that do not operate on a wholly commercial basis. These entities include design institutes, contractors, materials and other service suppliers. The nature of the system within which these entities operate is structured and is focused on meeting national demand, particularly focused around the National Five Year Plan promulgated by the State Council. For instance, in the current plan the government has indicated that 140 million social-housing units will be produced within that timescale. It has also indicated that up to 60% of this output must be accomplished by using volumetric and Design for Manufacture and Assembly (DfMA) approaches to prefabrication. This is a policy designed to meet both social-housing and ageing-workforce issues that are key problem areas at the present time. However, this policy is driving major changes in the industry and semi-automated factories of 200,000 m² and more are being constructed in many provinces to meet this demand. As such, one might say that this policy has driven a move towards both IPD and more effective and widespread use of BIM in order to make the design and construction and use of buildings more efficient and effective. Great emphasis is being placed on energy efficiency as part of this process. 52

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As far as Hong Kong is concerned, the construction industry could be described as very traditional. It has relied for many years on procedures and processes laid down by government bodies such as the Development Bureau (DB, the strategy formulating body) and the Buildings Department (BD, a functional, approval body). These institutions have, in different ways, both driven and inhibited innovation and it is only recently that moves have been made to dramatically change the nature and focus of the industry. These changes were perhaps initially driven by the need to construct the new airport at Chek Lap Kok before the handover to China in 1997. This required 14 major infrastructure projects to be completed within a very tight program. This led to the formation of the new airport project coordination office (NAPCO) that took over the programme management of these projects. This was a first for Hong Kong in terms of managing a programme of projects. This also led to the development of a project managing and monitoring system that was digitally based, and also a move towards more novel payment methods, such as milestone payments. Also, the use of more PPP approaches in order to lessen the management and financial burdens on the government itself were implemented. Beyond the handover, Highways and other government departments looked to move towards a partnering approach in order to facilitate the design and construction of major projects. This partnering approach was tried on a voluntary basis initially and then on a contractual basis and it is fair to say that it met with mixed results. The partnering process not only demands that individuals and teams come together to form and agree common goals and objectives but it also requires a much greater degree of trust and collaboration than the traditional contracts that had been used in Hong Kong in the past. Unfortunately, the conditions of contract under which the partnering projects were run were still very much of the hard dollar, adversarial type and no matter how much facilitation took place there was still a copy of the contract kept in the drawer ready to be taken out and clauses cited. However, DB persisted with process innovations and moved on, eventually, to a trial programme using the NEC3 contract. This provided a better background and atmosphere for collaboration and for partnering to take place. Experimentation with cost plus and pain-share/gain-share contracts helped this process along. However, many of the projects undertaken initially were of relatively small value, HK$ 200M or so. This made it rather difficult for the larger contractors to be able to participate wholeheartedly in the process given the nature of the overheads associated with such smaller contracts for large companies. Another impediment was the overly excessive use of ‘Z clauses’ that recited a number of the old Government Conditions in the contracts. Thus, the experiment with relational approaches to contracting could be said to have foundered on the twin issues of traditional reliance on the conditions of contract and a lack of change in terms of attitude and trusting behaviours by the participants. Additionally, despite DB’s best efforts to ensure that a flow of projects of relatively high value was maintained, opposition to some of the developments in the Legislative Council and from environmental groups meant that the demand in the market still fluctuated wildly. Hence there was little incentive for contractors to adapt and change their methods of contracting when the guarantee of continuing workload was not there. Currently, the Hong Kong government has issued the document Construction 2.0 (Hong Kong Government, 2018) that emphasises a move towards collaborative contracting, mandated use of BIM, more extensive use of the NEC contract and an emphasis on design for volumetric DfMA in housing production. Quite frankly, this is a big ask for an industry that has an ageing workforce, has been characterised in the McKinsey report (2015) as adversarial and of low productivity and has witnessed a continuously fluctuating workload – feast and famine – over the past 20 years. For Singapore, there is a different story. The government and the government bureaus have a well-defined process in place for putting forward and approving projects. The government has a 53

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continuous program of public housing provision and reclamation to allow for more construction. The Building Construction Authority (BCA) has mandated the use of BIM for all building approvals and for all government projects to be BIM-enabled. However, the industry has a mix of local and international contractors, particularly for civil engineering works, and the labour force is comprised mostly of imported labour from around the region. Thus, although there is a well-defined and reliable workload, the system for delivering projects is not necessarily suited to delivery in an IPD process. Suffice to say that the approach adopted by Singapore is some way ahead of Hong Kong at this present time. With its proximity to neighbouring Malaysia, Singapore has access to factories that can produce large-volume precast units. The move towards industrialised construction using BIM as a process is driving the industry in a direction where the process is integrated through to the supply chain. The emphasis on energy efficiency in the production of buildings as a goal of IPD is certainly within reach. It would be fair to say that Malaysia and a number of other countries in Southeast Asia are not as advanced as Hong Kong and Singapore in the move towards IPD. However, there are a number of major contractors, consultants and clients that have started driving the move towards more integration through the process of enabling BIM in their projects. However, it has to be borne in mind that this move to an IPD process requires a well-thought-out and accessible and stable data environment as well as an attitude change, moving away from professional silos and adversarial attitudes to a collaborative and inclusive approach to the whole lifecycle of the building or facility. This is not easy to achieve in one generation, yet a change in the delivery process is essential for newly developing digital processes and technologies to work effectively. Given the foregoing, it is worth noting that many property developers, particularly in Hong Kong, are very highly integrated and come close to performing in an IPD fashion. These organisations have an interest in the whole lifecycle of the building and will ensure that their facilities managers are part of the team that initially assesses each project. Thus, with this vertical integration of both the in-house team and the supply chain, such as curtain wall manufacturing facilities, concrete supply facilities, utility suppliers and many other aspects already in place, the developers have the best chance of achieving IPD rapidly. The situation in China is somewhat different. With China being a massive country the demand economy still has great influence in terms of governance and distribution of resources. However, the government also has the power to mandate the use of processes such as BIM and volumetric/prefabricated construction. Thus, the change in China is being driven by policy from the top and innovation and technology utilisation at the work face. Chinese companies have embraced technologies such as drones, photogrammetry, big data analytics and energyefficiency monitoring systems wholeheartedly. This is undoubtedly a prerequisite for the successful delivery of IPD. The emphasis on more offsite production and the logistics of dropping components in is also a very helpful driver of this change. The young engineers coming into the industry come with a can-do attitude and a view that technology as developed in China is there to be used innovatively and to improve the lives of the people. Given the huge demand in China there is plenty of scope for innovation and novel approaches to both provision of facilities and business models. The large communications companies such as Ali Baba and Ten Cent have a need for large areas of storage for both goods and, in data centres, services. Hence, they are moving into the role not only of communications providers but logistics. As such, they are capable of actually driving the design, construction and production within the buildings that they need to have delivered. Yes, they are breaking down the traditional silos that existed in the Commonwealth countries’ procurement systems by changing the nature of the process by which the facilities are delivered. This can only be a good thing.

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Europe While much of the Europe Union (EU) countries felt constrained by EU rules on competition and collusion that restrained EU countries from adopting alliancing similar forms emerged and after some time an EU ruling clarified the meaning of competition to allow alliancing to occur. This triggered a surge of alliancing projects in Finland with recent literature emerging that reports on alliancing concepts from the Finnish perspective (Lahdenperä, 2009;2014;2015) with case studies being reported on from stakeholder engagement and project learning perspectives (Aapaoja, Herrala, Pekuri and Haapasalo, 2013; Aaltonen and Turkulainen, 2018) as well as recent work that investigates how the OP and NOPs align their professional and organisational cultures to work as an integrated and collaborative team (Matinheikki, Artto, Peltokorpi and Rajala, 2016; Matinheikki, Aaltonen and Walker, 2018). There has also been an interest in Norway with evaluation of forms of partnering and collaboration that under the Norwegian system gets close to the alliancing concept. There have been case studies from the hydrocarbon sector (Børve, Ahola, Andersen and Aarseth, 2017; Børve, Rolstadås, Andersen and Aarseth, 2017) as well as case studies including one of the major hospital construction projects in Norway (Bygballe, Dewulf and Levitt, 2015; Bygballe, Swärd and Vaagaasar, 2016). In Sweden, one PhD thesis was written on a case study from the energy distribution system industry sector in which a form of partnership was developed between the PO and NOPs. On further examination of how the procurement system actually worked in light of alliancing literature, it becomes clear that it was a form of IPD closer to an alliance than other IPD forms (Jacobsson, 2011a; 2011b). Key aspects of the relationship was the solid integration of the OP design and contractor NOPs, the quality of their integration and collaboration and the flexibility and versatility of the three parties in working together to solve various technical and other problems that cropped up and were successfully solved. The Netherlands is another country in which alliancing has been reported as being delivered for infrastructure projects (Laan, Voordijk and Dewulf, 2011; Hartmann and Dorée, 2015). The Dutch have also extensively used the competitive dialogue (CD) approach for procurement of integrated teams that collaborate with the PO (Hoezen, 2012; Hoezen, Voordijk and Dewulf, 2012a; 2012b; Hoezen, Voordijk and Dewulf, 2013; Haugbølle, Pihl and Gottlieb, 2015). The CD is similar in many respects to the development of the target outturn cost (TOC) time and scope process in alliancing. TOC development is explained in this book in Chapter 27 in detail. The CD, however, is very much a front-end activity in which several IPD syndicates work with the PO to explore ideas and further value-adding options to the initial brief scoping information. Hoezen et al. (2012a, p6) state that: The CD procedure is meant for the procurement of complex projects, of which technical, legal and/or financial solutions are not objectively specifiable by the contracting authority. It is, however, unclear how interaction processes during the negotiations and commitments in terms of formal and informal contracts are interrelated in the CD. They explain in detail how the CD process works in practice, using a case study example to reveal insights about the CD process from analysis of critical incidents and discussions with practitioners engaged on the case study project by accessing archival data and retrospective interviews. The project involved maintenance of an existing 40-year-old tunnel and the construction of a second tunnel alongside the current one. The original contract form was a Design-Build-FinanceMaintenance (DBFM) contract made by the Dutch Minister of Transport in March 2005 with the

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CD process being used to negotiate a new contract for 30 years from 2008 to 2036 for maintenance and additional work. The project was both technically and financially complex. Two contractors formed separate CD syndicates to negotiate with the PO with one successful contractor outcome. The outcome from three critical events during the negotiations determined the successful contractor. One event related to specifications and risk allocation of damaging the existing tunnel, a second was the development of a monitoring system for the construction stage and the third was the actual state of existing tunnel and roads and the agency’s specifications. Key aspects of the CD process that resonate with the TOC development process for alliances detailed in Chapter 27 include the way that uncertainty and ambiguity was resolved through the CD process where the PO and contractor genuinely explored and challenged assumptions. This allowed the PO and contractor to arrive at novel solutions to challenges in a flexible way. This approach impacted upon the development of the scope of works, pricing and estimated time for various tasks in the new works and refurbishment parts of the program. It was clear that this process involved sense-making by both the PO and contractor by heightening their perspective, taking skills to rigorously work through issues so that all parties had a far clearer understanding of the nature of the works. Thus cost and other savings were not gained through cost-cutting scope changes or relying on optimistic assessment of risk and uncertainty, rather they were based on a deeper understanding of the project. In this respect it shared many similarities with alliancing at the TOC development phase. Thus in the Netherlands we see examples of alliancing similar to the Australian–New Zealand style along with examples of the CD process. Germany has not embraced alliancing but we find examples of forms of partnering that move closer to an alliance or USA IPD-style project delivery form. Spang and Riemann (2014) undertook a survey of construction infrastructure project-management professionals and they discuss how partnering is perceived from a German context and they develop a partnering guideline of objectives that closely follows the aims and objectives for the CD process as well as for IPD and alliancing. It is interesting to note that their paper, published in 2014, was written around the time that the Finnish Transport Authority had sought, and eventually gained acceptance by the EU regulators, to permit alliancing in a finding that alliancing did not contravene EU competition regulations. Other examples of German collaborative IPD forms includes evidence from a North German syndicate of project owners, designers and contractors A case study of a German organisation Baufairbund (BFB) (Lönngren, Rosenkranz and Kolbe, 2010) reveals some interesting insights. The case study authors described the partnership role as follows: The close cooperation among the parties involved provides a comprehensive service for building and tenancy that is intended to offer the entire spectrum of life cycle and value creation in the construction industry, from the original consultation through to the planning and realisation of the building project up to and including subsequent services surrounding financing and facility management, e.g. maintenance and operation. The main difference between BFB and a general contractor is that the BFB is not limited to the building project, but is committed to long-term collaboration. In this way a learning process can take place during the cooperation of the various trades. . . . During the actual construction phase, the main responsibility of the BFB is project management. This comprises the supervision of project progress in terms of deadlines, but also quality standards. At the same time, detailed planning and the exact coordination of the various trades is being elaborated, in order to guarantee the seamless flow of work at the construction site. (Lönngren et al., 2010, p408) 56

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This provides an interesting form of partnering moving towards alliancing. Key vital elements of shared similarity between BFB and alliancing are trust between partners and a common IT platform that helps to integrate and coordinate participants to focus them on projects.

Other countries/areas This section has explored global IPD practice in a number of regions to cover a wide part of the world. We find little published evidence of IPD and alliancing being practised in Africa or South America, however, we know from participants in lean-construction conferences that it is possible that the IFOA may be considered or piloted but perhaps not yet documented. An interesting recent PhD thesis examines 16 case studies of Framework Agreement Contracts in depth and from that thesis (Ayegba, 2019) the form of agreement is highly consistent with Program Alliancing in Australia. In South America for example, members of the School of Engineering Pontificia Universidad Católica de Chile have been active members of the Lean Construction Institute (LCI) since the mid to late 1990s. The LCI supports the IFOA as one tool and approach to improve collaboration between the PO and other project delivery parties. In the logistics integration PM sector, we know of a unique form of integrated collaboration being undertaken through a mechanism referred to as the Atlantic Corridor (Arroyo, 2009). This was described as a kind of community of practice or joint-venture syndicate. Arroyo (Arroyo and Walker, 2008, 2010; Arroyo, 2009) reports upon several case study examples where companies from various Latin American countries formed an integrated syndicate of participants, each with their own contribution to provide an end-to-end transport solution that involved shipping, docking and ship maintenance, insurers and customers such as large iron-ore miners to collaborate within what may be viewed as an alliance. The rate of acceptance of the expected IPD and alliance behaviours and leadership traits may be explained in part by the norms held by organisations participating in projects.

Explaining the current IPD-alliancing global state of play The impetus to engage in IPD and alliancing-type forms was discussed in detail in Chapter 1 with Table 1.1 identifying seven distinct motivations to collaborate. Features that triggered the adoption of IPD and alliancing in the countries and regions discussed above are shared globally. Challenges and complexity of projects in some regions may be due to isolation or poor supporting infrastructure in some of the remote regions where engineering infrastructure projects, logistics projects and other type projects where a ‘thing/product’ is delivered, such as a building, a dam, a mining product distribution system, etc. In other regions there may be other sources of complexity such as corrupt or antagonistic political systems that make navigating regulations, permits and approval systems very difficult. This may cause severe problems to begin to collaborate with them (see Chapter 14 on stakeholder engagement for discussion of co-generation of value with stakeholders). In other places, there are opportunistic or hostile stakeholder groups such as militant unions or an aggressive general public that is opposed to the project to be delivered. All these comprise forms of complexity. The core issue is overcoming complexity through collaboration and integration to enable a great breadth and depth of intellectual and other resources to be effectively applied. Table 1.1 in Chapter 1 details other reasons why an IPD form such as an alliance may be appropriate. All these motivations would be common globally to some extent or another. So why is this approach not adopted globally? We see that alliancing has been entrenched in Australia and New Zealand for several decades. When we have interviewed highly experienced alliance managers and key team members, for 57

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example in research undertaken in 1999 on the National Museum of Australia (NMA) project, we received interesting background history about the impact of aggressive industrial relations (IR) and union militancy on decisions to find ways of engaging with them (Walker, Peters, Hampson and Thompson, 2001). In that paper, one of the authors was an ex-union builders’ labourer who had returned to study as a mature student to complete a law degree and practice in a high-profile law firm. His insights published and included in that paper as well as unpublished and shared with co-authors indicate that alliancing in Australia was significantly triggered by the motivation to get the PO to join the design and contractor NOPs to find ways in which potential IR problems could be obviated through changing the workplace culture. The NMA project was successfully delivered ahead of schedule as well as from a number of other key results area and associated key performance indicator (KPI) measures (Auditor-General of the Australian National Audit Office, 2000; Hauck et al., 2004). The workplace IR culture was also observed (by one of the authors of this chapter who made many research site visits during its construction) to be significantly more cooperative and collaborative than many other construction projects at that time. The approach to include the unions in a sub-alliance type agreement with agreed responsibilities and KPI performance measures in place appeared to have a significant impact on successful project delivery (Walker et al., 2001). We see in Chapter 10, for example, on the cultural perspective of IPD, that some organisations may remain highly hierarchical and commercially predatory and opportunistic. Some participants in projects from a range of organisational backgrounds may also be limited by their national cultural heritage of high power-distance, high uncertainty-avoidance and noninclusive values and norms. These do not fit the IPD and alliance model. This suggests that some national cultural traits such as high power-distance, low uncertainty-avoidance and high individualism dimensions may find it harder to adjust to the cultural norms required of IPD and in particular, alliance projects. These national traits may coincide with difficulties in changing an organisational culture in which ‘management prerogative’ is believed to be a right and nonnegotiable. Similarly, cultural bias (national, organisational or professional) towards deference to power may inhibit the level of challenging assumptions and expert-power gaining traction. This may impact collaboration to stimulate innovation. However, most parts of the world have people from a multi-cultural background working in the teams delivering projects, therefore the influence of national culture (as explained in Chapter 10) must be able to be moderated. If this were not the case then IPD and alliancing would not have been so prominent in the range of countries outlined above. Chapter 5 outlines aspects of client capabilities and this may help explain why some POs may find the concept of IPD-alliancing difficult to accept; and Chapter 11 discusses the knowledge, skills, attributes and experience (KSAEs) required of IPD teams, suggesting that in some countries or regions these KSAEs either are not sufficiently valued or else are poorly developed to sustain significant numbers of IPD-alliance projects being delivered. To answer the research questions posed in this chapter’s introduction, we suggest that the uptake of IPD-alliancing may be mainly explained from a cultural perspective—primarily how the organisational and workplace culture operates. Another major influence is history. Lahdenperä’s map (2012, p62), illustrating how the concept of relationship-based forms of project delivery evolved and were diffused and transformed en route, provides a useful means to understand how IPD-alliancing has emerged and evolves. With the recent release of the NEC4 contract we may expect greater expansion of alliancing-like project delivery being undertaken The challenge of clients gaining the necessary freedom to act as well as gaining the necessary knowledge, skills, attributes and experience (KSAEs) should not be underestimated. IPD emerged in the USA out of a crisis in 1994 when an earthquake in California significantly damaged 58

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critical health facilities. Legislation was passed that required many institutional structures to be ‘earthquake-proofed’ with significant structural seismic work undertaken by January 1st, 2013. This required a great surge in building structural upgrades while others had to be demolished and replaced (Lichtig, 2005). In the USA case the legislation enabled a total rethink about how complex projects could be delivered and this allowed clients to make a quantum leap in the flexibility to act differently to their business-as-usual practice. In the UK, the enabling trigger to construct differently was triggered by two key reports (Latham, 1994; Egan, 1998) that highlighted a history of declining building productivity through a plethora of reports dating back to shortly after World War II (Murray and Langford, 2003). The successful construction of Heathrow’s Terminal 5, based on a completely different project delivery approach, led the way to changes in the UK with further adaptations of what became to be known as the ‘T5 agreement’ (Doherty, 2008) and this helped to shape the way that large scale complex projects are being undertaken in the UK (Davies et al., 2014; Davies and Mackenzie, 2014) and we see NEC4 as the next chapter in the story of evolution and take-up of IPD forms in the UK. We suggest that IPD and forms of alliancing will become far more widespread globally. Many recent foresight reports that attempt to make sense of workplace trends and conditions moving from 2030 beyond, all suggest that intense collaboration will be the norm in the management of future projects as widespread digital economy features such as robotics, artificial intelligence (AI) and augmented digital technologies all reduce the level of routine work being undertaken by humans and demand for work of specialised systems integration by humans increases (Committee for Economic Development Australia, 2015; World Economic Forum, 2016; Jacobs, Kagermann and Spath, 2017; PwC, 2017). This trend suggests that IPD and alliancing forms will increase over time and become more geographically dispersed over coming years.

Conclusions This chapter discusses the current global state of play of IPD in general and alliancing in particular. It also explains general forms of IPD in Table 3.1 in terms of their level of integration and collaboration and maps these as illustrated in Figure 3.1. This provided a basis for underpinning what we mean when we refer to IPD-like forms and allows a fuller picture of the terrain under discussion in the chapter. The discussion of the global adaptation of IPD forms followed and it is clear that in alliancing terms, Australia is a leading influencer in its adoption in Finland and the Netherlands in particular. The IFOA form of IPD is established and growing in the USA and North America and will continue to influence regions where lean-construction principles are accepted and adopted. The UK has a very strong pedigree in its IPD-form evolution from the T5 agreement onwards, with solid experience of FAs for smaller-scale projects and the NEC4 continuing to be a solid influence due to its historic credentials. We suggest, based on industry and government foresight reports we cite, that the digital economy, and in particular the way that AI-augmentation technology is likely to evolve, that there will be significant increases in collaboration and IPD in future. We conclude that one of the significant and pressing challenges that face project-management professionals in general, and in the engineering infrastructure and construction sector in particular, will that the PO will need to gain collaborative competencies and abilities to excel in collaborating with others in an integrated team to take advantage of innovation and improved project-external stakeholder engagement benefits that IPD offers for complex projects. We also conclude that for all IPD project members, that gaining and maintaining the requisite KSAEs will pose a challenge that they will have to cope with and overcome. 59

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Note 1 www.cibworld.nl/site/home/index.html.

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The global state of play of IPD PwC (2017). “Workforce of the future: The competing forces shaping 2030.” Online: www.pwc.com/gx/ en/services/people-organisation/workforce-of-the-future/workforce-of-the-future-the-competingforces-shaping-2030-pwc.pdf: 42pp. Rahmani, F., Khalfan, M. M. A. and Maqsood, T. (2016). “Lessons Learnt From the Use of RelationshipBased Procurement Methods in Australia: Clients’ Perspectives.” Construction Economics and Building. 16 (2): 13. Rowlinson, S. (1988). “An Analysis of Factors Affecting Project Performance in Industrial Building (with particular reference to Design Build Contracts).” PhD Thesis, Construction Study Unit, Department of Building Technology, UK: Brunel University. Rowlinson, S. and McDermott, P. (1999). Procurement Systems: A Guide to Best Practice in Construction. London: E. & F. N. Spon. Rowlinson, S. and Walker, D. H. T. (2008). “Case Study – Innovation Management in Alliances.” Procurement Systems – A Cross-Industry Project Management Perspective. Walker, D. H. T. and S. Rowlinson. Abingdon, Oxon: Taylor & Francis: 400–422. Scheepbouwer, E. and Adam, H. (2011). “Transition in Adopting Project Delivery Method with Early Contractor Involvement.” Transportation Research Recordgott. 2228 (1): 44–50. Sidwell, A. C. (1982). “A Critical Study of Project Team Organisational Forms Within the Building Process.” PhD Thesis, Department of Construction and Environmental Health, Birmingham, UK: University of Aston in Birmingham. Sidwell, A. C. and Mehertns, V. M. (1996). Case Studies in Constructability Implementation. Adelaide: Construction Industry Institute Australia. Spang, K. and Riemann, S. (2014). “Partnering in Infrastructure Projects in Germany.” Procedia – Social and Behavioral Sciences. 119: 219–228. Swierczek, F. W. (1994). “Culture and Conflict in Joint Ventures in Asia.” International Journal of Project Management. 12 (1): 39–47. Testi, J., Sidwell, A. C. and Lenard, D. J. (1995). “Benchmarking Engineering and Construction – Winning Teams”. Adelaide, CIIA and University of South Australia, 5. Toor, S.-u.-R. and Ogunlana, S. O. (2010). “Beyond the ‘Iron Triangle’: Stakeholder Perception of Key Performance Indicators (KPIS) for Large-Scale Public Sector Development Projects.” International Journal of Project Management. 28 (3): 228–236. Vilasini, N. (2014). “Generating Value in Alliance Contracts Through the Lean Concept.” PhD Thesis, School of Engineering, Auckland: Aukland University of Technology. Vilasini, N., Neitzert, T., Rotimi, J. O. B. and Windapo, O. W. (2012). “ A Framework for Subcontractor Integration in Alliance Contracts.” International Journal of Construction Supply Chain Management. 2 (1): 17–33. Walker, A. (1993). Project Management in Construction. London: Blackwell Science. Walker, A. (2015). Project Management in Construction. London: Wiley-Blackwell. Walker, D. H. T. (2016). “Understanding the Alliance Target Outturn Cost Process and its Implications.” Melbourne, Australia: Centre for Integrated Project Solutions, School of Property, Construction and Project Management, RMIT University: 77pp. Walker, D. H. T. and Hampson, K. D. (2003). Procurement Strategies: A Relationship Based Approach. Oxford: Blackwell Publishing. Walker, D. H. T., Hampson, K. D. and Peters, R. J. (2002). “Project Alliancing vs Project Partnering: A Case Study of the Australian National Museum Project.” Supply Chain Management: An International Journal. 7 (2): 83–91. Walker, D. H. T. and Harley, J. (2014). “Program Alliances in Large Australian Public Sector Infrastructure Projects.” Melbourne, Australia: Centre for Integrated Project Solutions, RMIT University: 86. Walker, D. H. T. and Jacobsson, M. (2014). “A Rationale for Alliancing within a Public–Private Partnership.” Engineering, Construction and Architectural Management. 21 (6): 648–673. Walker, D. H. T. and Lloyd-Walker, B. M. (2015). Collaborative Project Procurement Arrangements, Newtown Square, PA, Project Management Institute. Walker, D. H. T., Mills, A. and Harley, J. (2015). “Alliance Projects in Australasia: A Digest of Infrastructure Development from 2008 to 2013.” Construction Economics and Building. 15 (1): 1–18. Walker, D. H. T., Peters, R. J., Hampson, K. D. and Thompson, M. J. (2001). “Achieving a Responsive Industrial Relations Environment for Construction Industry Workers: A Project Alliancing Case Study.” Construction Innovation 1 (4): 211–225. Walker, D. H. T. and Rahmani, F. (2016). “Delivering a Water Treatment Plant Project using a Collaborative Project Procurement Approach.” Construction Innovation. 16 (2): 158–184.

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Derek Walker and Steve Rowlinson, Walker, D. H. T. and Sidwell, A. C. (1996). Benchmarking Engineering and Construction: A Manual For Benchmarking Construction Time Performance. Adelaide, Australia: Construction Industry Institute Australia. Winch, G. M. (2004). “Managing Project Stakeholders.” The Wiley Guide to Managing Projects. Morris, P. W. G. and J. K. Pinto. New York: Wiley: 321–339. Wood, P. and Duffield, C. (2009). “In Pursuit of Additional Value A benchmarking study into alliancing in the Australian Public Sector.” Melbourne: Department of Treasury and Finance, Victoria: 191. Woodward, J. (1958). Management and Technology. London: Her Majesty’s Stationary Office (HMSO). World Economic Forum (2016). “The Future of Jobs Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution Global Challenge Insight Report” (pp. pp. 167). Geneva, Switzerland: World Economic Forum: pp167. Young, B., Hosseini, A. and Lædre, O. (2016). “The Characteristics of Australian Infrastructure Alliance Projects.” Energy Procedia. 96: 833–844. Zwikael, O. (2016). “Project Benefit Management.” IPMA Conference in Rekjavik, Iceland, IPMA.

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SECTION 2

Section 2 concentrates on the foundational concepts that support integrated project delivery (IPD), with six chapters. ••

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Chapter 4 – Value from an IPD perspective: Chapter 4, written by Rowlinson and Walker, tackles the vexed issue of value: what it means and how value and cost are separate concepts. The ‘value for money’ (VfM) term is often used whereas perhaps ‘best value’ may be more appropriate. Value to whom? This is a question also discussed in this chapter because it affects how project briefs/visions are conceptualised and communicated. Chapter 5 – The role of the client: Chapter 5, also written by Rowlinson and Walker, addresses an often neglected issue in IPD: understanding the role of the project owner’s (client’s) representative participant (OP) in an IPD arrangement and how that role and the characteristics of those acting in that role may shape or limit IPD opportunities. The chapter takes a 50+year perspective of how the OP has viewed its role in project delivery. A case is made for IPD from this project owner perspective. Project owner competences are discussed and suggestions are made how to enhance these for effective IPD. We also suggest how these may evolve in the future, perhaps influenced by technology and supply chain integration advances. Chapter 6 – Thinking systemically to mobilise IPD capability: In Chapter 6, van der Hoorn, Whitty and Walker take a systems perspective and discuss IPD as a complex product and service system. It introduces complex adaptive systems theory and a Heideggerian continental perspective applied to the IPD concept. Application of the systematic lessons learned knowledge (SyLLK) model to IPD on several case studies of IPD taken from USA publications is explored in depth. Recent literature on innovation and entrepreneurial activity suggests that when looking at complex projects from a system perspective, there is a need for not only technical, entrepreneurial, sponsorship support for the ‘system’ to drive effective project delivery but also a system of challenging assumptions in a review process to clarify what value is being added. Chapter 7 – Where is IPD coming from and where is it going to? Wang and Rowlinson illustrate in Chapter 7 an example of IPD outside of the conventional construction industry IPD sector. It illustrates how IPD has been developed in an advanced manufacturing setting for construction components. The case study organisation adopted advanced digital technologies and supply chain management processes. It points to where IPD may be heading. A case

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••

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study of advanced manufacturing in China is used to explore collaboration, integration of design and delivery and the use of advanced digital technologies and supply chain management approaches. This provides a glimpse into future directions in project delivery that is emerging strongly. The chapter links to numerous other chapters that explain the how and why questions about IPD. In this case, how the emerging digital and robotic technologies combined with a new approach to supply chain management (SCM) may influence IPD in coming years and why this advanced manufacturing technology development is an important innovation that may shape IPD further in the future. Chapter 8 – The role of IPD in facilitating design thinking and creativity: Chapter 8, by Walker and Rowlinson, speaks to a vital foundational aspect of effective IPD. In this chapter we explain how creativity and design thinking is critical to effective IPD deployment. This lies very much at the front end of project realisation. Chapter 9 – Foundational elements of the IPD Collaboration Framework: Walker and LloydWalker explore in Chapter 9 the foundational facilities component of the Collaboration Framework briefly discussed in Chapter 2 in more detail. These facilities form the core baseline requirements for high level IPD collaboration to occur.

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4 VALUE FROM AN IPD PERSPECTIVE Steve Rowlinson and Derek H. T. Walker

Introduction In this chapter we explore value in terms of asset delivery. Projects deliver strategy to realise a particular benefit (Söderlund and Tell, 2011; Zwikael, 2018). In doing so, we look at the process of value management and value engineering (Thiry, 2001) as well as the evolving field of study referred to as benefit management (Bradley, 2010; Zwikael and Smyrk, 2011). We address the issues from the perspective of integrated project delivery (IPD). Traditionally, value has been poorly defined in the construction industry is. Thus, we have to address a number of questions: •• •• ••

What is value and to whom is the value apparent? What are the concepts of value management and value engineering? How, why and by whom should value be created?

This chapter is fundamental to the book in that, as stated above, creating value to achieve a strategic objective via a project is central to any project management (PM) process and co-creating value through collaboration and integration is a central plank of this book’s discourse. We will discuss how it relates to the book chapters shortly. Value engineering is based on a methodology developed by Lawrence Miles who worked for the General Electric Company in the USA during World War II (Kelly, Morledge and Wilkinson, 2002; Male, Kelly, Gronqvist and Graham, 2007, p19). Due to shortages of materials and finished products it was necessary to generate alternatives to the existing materials. Thus, the concept of value engineering (or analysis) within a creative team-based approach was developed within the company. Basically, the analysis is based on improving the value of a product by examining its function and defining value as the somewhat conceptual ratio of function to cost. There was, undoubtedly, an underlying focus on cost rather than adding value and function. Value management is defined as a structured, systematic and analytical team decision-making approach to address and solve a problem. It seeks to achieve value for money (VfM) by providing all the necessary functions at the lowest total cost consistent with the required levels of quality and performance. However, this is a highly transactional concept and assumes that value is capable of being reduced to a monetary quantum. This VfM orientation has been a subject of 69

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debate within an alliancing IPD context. It has been criticised by MacDonald (2011), for example, as being misleading and he suggest the term ‘best value’ to be more inclusive. Best value takes into account value that is both tangible and economically measurable as well as aesthetic or social capital value. In fact, perceiving value is best addressed by considering the recipient of value’s ‘value proposition’ (Anderson, Narus and van Rossum, 2006; Tarantino, 2006) that is the value of what is desired and needed in the terms that is consistent with the person or entity to receive that ‘value.’ Green (1994) provides a clear and concise statement as to the difference between value engineering and value management: The traditional approach to value engineering is analysed, and is found to reflect the optimizing paradigm of hard systems thinking. In contrast, the alternative approach offered by value management is based on the learning paradigm of soft systems thinking. While the objectives of value engineering are dominated by cost reduction, the purpose of value management is to develop a common understanding of the design problem and to identify explicitly an agreed statement of design objectives by the project stakeholders. (p49) A relevant question to be asked here then is whether these value engineering/management approaches are synonymous with value creation? We provide an example to illustrate this point. A common task that we set for our undergraduate students when discussing what value consists of the purchase of a computer for studies at university. What is the best computer to choose? A high-end laptop, a desktop, a tablet or a simple smartphone? We start by letting the students elaborate on why they think they need the computer and then draw them into discussing how they will use it. So, at some point we end up with a fairly standard set of questions that have been repeated many times in varying texts on value management. Similar questions could be asked of an IPD team when considering what technology support they may require to effectively deliver their project. These questions go along the following lines: •• •• •• •• ••

What do I need it for and what must it be capable of doing for me? What is it worth and what is my budget? What will best satisfy all of my needs at university (or project)? Do I know what my needs at university (or project) are, currently, and what they will be in the future? What are my alternatives and how do they stack up against this list of questions?

As can be seen, even with a simple choice such as that of what computer to buy I have many questions to ask and many options to consider. Indeed, the first question should really be, do I need a computer at all? Or do I really need a new computer? In this exercise, we pose to one another some interesting questions. If we were to look back at the principles of value management, we would go to the first question to be asked, which is what does it have to do, indeed what are the basic functions I need from this purchase? However, value is not one-dimensional, as we can see from the questions that we have asked earlier. Almost every product that we purchase, or deliver, has essential functions and supplementary functions. Do we need any of the supplementary functions? Do we need all of the 70

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essential functions? i.e. are they really essential? Could we not buy in some of these essential and supplementary functions? This simple discussion is leading us down the direction of the questions that are asked in Chapter 24 by Atkin and Rowlinson on facilities management and we also deal with similar issues in Chapter 5 on the role of the client in IPD. Thus, this simple example starts to enable us to explore the relevance and complexity of determining what exactly value is and to whom the value accrues and from where the value is generated. This chapter is structured as follows. Following this introduction we establish our focus as value in an IPD context. We then discuss value from a co-creation context and also alternative views of value. This leads to a discussion of the supply chain; many might consider this a value chain rather than a supply chain within this ‘value’ context. Having laid out the positives of a supply-value chain idea we then discuss how this may be reduced through barriers to creating and co-creating value. This naturally leads to the context of value in this book and so we discuss the value and cost of IPD. We then pose the question ‘where to now?’ and offer our perspective. This leads to the chapter conclusion.

Value and IPD Value can be defined in many ways. However, in this particular context, where we are looking at IPD, we must make it clear that value is certainly not least cost. The whole premise of this book is to point the way forward towards IPD and one of the underpinning principles of IPD is that cheap is rarely good enough. We must take a whole life-cycle view of the nature and the needs of all of the project participants if we are to deliver value. Needs may include aspects that at the project initiation stage are unclear, such as implications for hitherto poorly considered stakeholders, for example the environment society and future generations affected by the legacy that the project may leave. As mentioned above, we need to address the stakeholders’ value proposition and, as may be seen in Chapter 14, stakeholders are multi-headed, often with competing needs and so therefore it is difficult to prioritise and judge which stakeholders needs deserve primary consideration and which ones are obliged to accept compromise. Moreover, value and integration take on another dimension where consideration may be needed to balance benefits to be delivered by a project and what may be delivered by an integrated program. An example of this can be seen with the way that the London Olympics ‘project’ (or more accurately program of projects’ benefits and value generation) could be seen from a more integrated perspective. For example, Gil in his chapter discussing megaprojects such as the London 2012 Olympics and Crossrail (2017) stresses that taking a ‘project view’ of value in the case of the Olympics program, for example, would be short-sighted. Optimising one part of that program of works, for example, a particular event venue delivery aspect while not linking that value to the value delivery offered by rail-and-transport associated projects may not actually deliver the expected value (a successful total Olympics experience) if the transport facilities to the venues are shambolic. Thus in IPD terms, there is often a higher ‘value proposition’ be that integration of current or closely proximal facilities to create value, or even to consider legacy issues within the ‘value proposition.’ Many of the IPD infrastructure ‘megaprojects’ in particular need a longer-term and more sophisticated understanding of value: current and future, in scope. This concept of taking a program or portfolio perspective to monitor the extent to which the contribution of a project output leads to a benefit to ‘the whole’ is central to benefits management/realisation (Bradley, 2010; Breese, Jenner, Serra and Thorp, 2015). However, while there is an important emphasis focussed upon the way conceptualisation of a proposed benefit (the final outcome) is conducted, a major part of benefits management has been on measuring, monitoring 71

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and control. As Breese et al. (2015) explain, benefits management emerged in the late 1980s by management consultants with interest growing in the 1990s as a business academic field and also taken up by governments, with one result being a focus on value and benefits in the stage-gate process of project approval and monitoring, initially by the United Kingdom (UK) Office of Government Commerce (2007b; 2007c; 2007a). Chapter 19 provides more detailed discussion of the gateway process in the UK, Australia and Norway as a governance mechanism at the front end of projects. From a more focussed project perspective, in looking at value as a collective and collaborative process, we can explore how collaboration between IPD participants can be envisaged. Architects may well find value in a difficult project, conceptually and physically. By applying architectural skills and techniques to difficult situations, value is created. Similarly, a structural engineer can develop, collaboratively with other participants, an effective, efficient and elegant structural solution to difficult architectural problems. We could go on. This process should clearly point out that there is value in projects for all participants but that there is an overarching demand that value is delivered to the client. The project (and even a program of projects) may potentially deliver value in an unexpected way than that first considered. The Level Crossing Removal Program (LXRP) in Melbourne, Victoria, for example, that is discussed in many chapters in this book, had a focus on ‘legacy’ as a key result area (Walker, Matinheikki and Maqsood, 2018) this ‘value’ was to transform neighbourhoods that had been separated by road/rail crossings that divided communities and posed a barrier. By removing them, not only was the ‘value’ achieved of increasing efficiency of the rail network and associated road network at the crossings for traffic flow and safety, but also social amenity was enhanced by developing parkland on land where rail lines were raised above ground for a ‘skyrail’. Other urban infrastructure was also improved with previous rail-track land being turned into bike and walking paths with exercise equipment and basketball areas being formed. Thus, by taking an IPD view and greater stakeholder engagement efforts, the LXRP alliance approach is delivering value at levels than can be assessed in monetary gain terms but there are also many non-monetary value deliverables that provide long-term social and community health and wellbeing benefit. This perspective, both short-term VfM and best-value long-term-value delivery, is typical of what may be delivered through an IPD approach and is thus relevant to this chapter.

Defining value As we have seen, value is defined in many ways. Hence, at the outset of a project a discussion of what we believe is value for the client and the project participants is essential. Value has its background in concepts such as need, desire, preference, lifetime performance and, even, monuments to someone or to the future. These are all conflicting bases for a definition. Thus, the first lesson to be learned in this debate is that values are unique to an individual, an organisation, a nation or a discipline. Value to whom is encapsulated by the concept of the value proposition (Anderson et al., 2006; Tarantino, 2006). Value is that which is valued and that depends on the observer’s value system. For example there has been a long-running debate on the validity of various stakeholders in terms of corporate social responsibility (CSR) with some taking the view that the purpose of business is to maximise its shareholder ‘value’ proposition (Freeman, 1984; Jones and Wicks, 1999). However, there is a big question about sustainable versus short-term ‘profit’ or benefits versus long-term investors who seek long-term average improvement in their investments, and so even the money or profit motive can be confusing and distracting (Freeman, Harrison, Wicks, Parmar and de Colle, 2010, p11). So in the business literature we have a debate about value in terms of long versus short-term profits as well 72

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as value in terms of benefits that can be valued in terms of money or in more subjective and extrinsic terms. A similar debate is pursued in the PM world in terms of what does project (or program) performance actual mean? Chapters 23 on an ethics and CSR perspective of IPD and Chapter 26 on performance measures and IPD discuss these ideas in detail. If we are to look at the nature of the client and its decision-making process as discussed in Chapter 5 we might take the Tavistock sociotechnical systems viewpoint as a good basis for examining client value. The client is presented with a range of options from the project team and has to make decisions, either by some form of objective analysis or through some subjective value judgements, as to what best fits the client’s purpose. However, a client’s assessment of what is presented will be based on its experience and its desires and viewpoint, whether that be long term or short term or whether it is driven by profits or esteem. Thus, the simplest expression that we can make is that values are unique. This being the case, the project delivery team must explore these values and derive a mechanism for putting the values and expectations into perspective through the design and delivery process. Again, taking the perspectives of the Tavistock group (Crichton, 1966) it is important to recognise that persons and organisations are unique and that they have different philosophical and economic viewpoints and that they operate in different environments. This set of differences will actually focus on an organisation’s manner of decision-making. Indeed, not just decision-making but structuring for decision-making. Vyas (2014) addresses these issues in relation to the project team and its capabilities in major projects in Hong Kong, as do Winch and Leiringer (2016) in discussing client capabilities. Thus, we may return full circle back to Woodward‘s (1958) analysis of different production industries where she pointed out that we need to take a contingency view that focuses on the way each industry produces. This production focus leads to a contingency view of what the individual client actually needs and expects.

Rationalising value creation Taking a rational economic view of value creation, we can simply look at consumers and producers as receivers and creators of value. The design and development of products and processes are exchanged in a market that has producers and consumers and production is often focussed on a mass market rather than an individual requirement. Take smartphones as an example: these are customised by the individual through apps to produce different functions and satisfy the needs of different customers. This is very different to the traditional view of the process of mass production, in that what is mass produced is actually customisable. We will return to this argument when we discuss the role of mass prefabrication and volumetric production. When we translate the ideas from the production-based industries into the construction industry we can see that the products and services that we produce need to be co-created. The construction industry needs to deliver a collaborative production environment. This indeed is the crux of the matter when we come to IPD. There is a tacit admission that the old methods of production of buildings, services and their management are woefully inadequate and do not meet clients’ needs or their concepts of value. Hence, the thesis expounded in this chapter is that IPD has the capability to deliver very specific values for construction clients throughout the process and life of the asset that is being produced. On this basis, we should see IPD as the disruptive force in driving value co-creation for the industry. This is consistent with the concept of co-creation in general management terms (Prahalad and Ramaswamy, 2004) as well as program terms for social-value projects (Näsholm and Blomquist, 2015) and more traditional project settings (Heikkinen and Airola, 2013; Keeys and Huemann, 2017). Value co-creation is clearly a viable prospect. 73

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Thus, the construction industry has to react and organise itself in order to deliver products and services in a collaborative, multi-participant process. The industry has to admit that there are multiple inputs to the design of the project and that these inputs must be coordinated in a common environment. Hence, we are moving into the direction of value co-creation as indicated by Grönroos (2004) in his discussion of the customer-value process as the outcome of relationship marketing. Lusch and Vargo (2004) expounded on relationship marketing with their service-dominant mindset and four axioms of service-dominated (S-D) logic. They stated that (p15): Service is the fundamental basis of exchange; The customer is always a co-creator of value: All economic and social actors are resource integrators; Value is always uniquely and phenomenologically determined by the beneficiary. Furthermore, if we take a Design for Manufacture and Assembly (DfMA) approach then we can use Egan’s (1998) analogy of the car industry, in that we have a standard chassis and that we can mix and match the various other parts of the car and the car body in order to develop bespoke solutions for our customer that are both efficient and effective and can be speedily delivered and are co-created. Is this, or should this, be transferable to the construction industry? So, what is the trajectory in which the industry needs to travel? Quite simply, attitudes have to change in the industry from one of opportunistic behaviour into a longer-term relationshiporiented marketing approach with the ultimate intention of leading to a collaboratively produced asset. The former approach is basically a transactional approach to marketing and is the manner in which the industry has operated for over 50 years. During this time, productivity has stagnated and the industry has gained a reputation of being one characterised by conflict and disruption. With the advent of marketing and relational approaches, such as partnering and alliancing, a more focussed relationship approach has been adopted in the development of design solutions, construction processes and, eventually, facilities management. Now, with the advent of IPD there is the opportunity to co-create value by making use of not just a collaborative, relationship-marketing approach but making use of technologies and processes such as DfMA and building-information models (BIM) to create a common data environment within which decisions and value can be made and created jointly by the team. This move needs to be underpinned by an attitude and focus change: thinking about the asset to be used rather than the project to be delivered. The FM concepts of soft landings and after-care become key components of the service delivered. Moreover, co-creation of value through multiple perspectives, such as the project owner participant (OP) in an alliance, for example, with the design, delivery and operator non-owner participants (NOPs) can unearth new and exciting value additions at less than the cost for the value obtained both from tangible (money value accounted) and intangible (aesthetic or social/environmental value) perspectives. In a world that is emerging to consider sustainability and long-term benefits, this IPD approach is clearly on a path worth exploring. This value co-creation trajectory is illustrated in Figure 4.1. We see a trajectory that flows from the traditional market approach of design then bid then build, with its inherent opportunism and transactional market orientation. With more effective integration supported by digitisation and common collaboration technology and process platforms, we see partnering evolving that is characterised by a relationship market approach and a person-orientation. This leads towards greater and more effective integration supported by more effective and perhaps game-changing digitisation support for collaborations that result in IPD. Here co-creation of value and collaboration work hand-in-hand. 74

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Advanced technology (DfMA) and a common data environment Co-creation

Collaboration

IPD

Partnering Relationship market Person-orientation

Transactional market Traditional Opportunism

Traditional

Figure 4.1  Impact of digitisation for collaboration and integration on IPD

Value co-creation So, what has held the industry back in the past from achieving this value co-creation? To be quite frank, as is stressed repeatedly throughout this book, it was the lack of ability to design, plan, engage and construct with all of the participants concurrently: the silo mentality (Tell, 2016). The sequential process that the construction industry has adopted and followed over the years has defeated attempts to improve value in project delivery and quality in the built asset. The conjunction of collaborative relationships, advances in design, construction and coordination technologies have led to the production of a new process in terms of integrated project delivery which enables this value creation. This, of course, doesn’t happen overnight, and it does require adaptation from all members of the industry. Typically, this process of value co-creation is predicated on personal interactions between participants and knowledge and information exchange between them. It is focussed on the whole of the project life-cycle, in that it aims to deliver value in both building construction and facilities management. Indeed, a key element in BS8536-1:2015, BSI Standard Briefing for design and construction – Code of practice for facilities management is after-care. Such aftercare, that adds value to the asset, is a novel concept for the construction industry which has always had a narrow focus on project development and delivery rather than the whole life-cycle of the asset: seeing the ultimate outcome as an asset rather than as a project. The interactions that take place between the participants are characterised by a collaborative approach and a cooperative atmosphere. The knowledge exchange is between the whole range of participants and is facilitated by the common data environment (CDE) in an IPD project. It is highly unlikely that a traditional approach to construction can deliver value co-creation in an effective manner. The essence of this co-creation process is developing synergy between the participants and this is facilitated by digital exchange of information and data that enables the exploration of the multiple dimensions of any particular project being delivered. By structuring this process within a collaborative agreement or contract, the adversarial approaches of the traditional system can be avoided. 75

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What is being created in the IPD project is value delivered by collaboration and mutual benefit. The underlying principle is that the asset should deliver value in use rather than viewing the asset as a constructed facility that has value only in the exchange between the parties. This point is stressed in Chapter 24 in particular. In Chapter 14, relating to stakeholders, the transformation of strategy of VicRoads is described in a case study of how a highly product-focussed entity (we deliver roads for car and to a lesser extent bike and pedestrian traffic) moved towards an inclusive community value so that its strategy became one of delivering a superior transport experience (car, bike, skateboard or pedestrian). There is an obstacle in this process. This is perhaps best described as the technology adoption problem: readers may wish to refer to Chapter 20 for some further discussion on this aspect. Many within the construction industry have seen BIM as the solution to the industry’s communication problems. Unfortunately, this is not the case. BIM can facilitate a change in the design, construction and use processes. However, BIM itself does not deliver a solution. For true value to be created, the client needs to be immersed within this range of digital technologies that allow the professionals to explore the attributes of the assets being prepared and also visualise the performance of the facility in use. Thus, a whole range of digital technologies such as visualisation and energy efficiency modelling are imperative to ensure that the principles of IPD and value co-creation are achieved. This, of course, requires a major series of changes in the processes adopted in the construction industry. For example, in the UK in a very complicated shaped-bridge construction, RMD Kwikform used two digital tools to solve the problem of producing the formwork for the structure. RMD used their in-house developed visualisation tool, LocusEye (www.rmdkwikform.com/hk/service/ locuseye, accessed 13/1/2019) to present a rendered 3D model of the design for the contractor to view prior to construction and formulate a method statement for the formwork erection. As the bridge piers were of a novel V shape and a very complicated geometry, they produced a 3D-printed model of the structure in order to help in the process of designing the formwork itself (BIM+, 2019). A very similar approach was adopted by Dragages in Hong Kong in designing the falsework for a vent to the MTR tunnel crossing Hong Kong Harbour. In this case the vent consisted of four different levels internally with a whole series of drop beams and cut-outs that were impossible to visualise in any other way. The purposeful strategy of projects having an urban planning value development committee, developed as a value-related innovation for the LXRP (Walker et al., 2018), serves as an example of how co-creation of value may be designed-in (see Chapter 8). This is one example of how unexpected value opportunities may be designed into a project procurement process to allow for serendipity to offer opportunities for intangible, social capital value cogeneration that may be delivered at little or no extra capital expenditure cost.

Alternative views of value The Farmer Review (2016), although much criticised, does address the issue of what Farmer terms understanding delivery failure. This is explained in terms of the uniqueness of designs rather than standardisation; site labour intensity rather than offsite manufacture; the number and scope of transactional interfaces (vertical integration); and the number of works interfaces on-site (horizontal integration). In addressing the use of BIM in the industry, Farmer makes a very important point. BIM will not work without changing the delivery model that the industry uses. He opines that focusing on BIM without a new delivery model will mean hitting a “glass ceiling.” His argument is both rational and logical and points in the direction of IPD. However, Farmer jumps on the bandwagon of offsite manufacture and his mantra is “we need to design with manufacture, install and quality in mind.” His rationale is that there is a 76

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need to reduce the number of interfaces (horizontal and vertical) and to challenge the normal, existing value chain. He calls for pre-manufacturing more value in factories away from the final work face on-site. He asks for an increase in pre-manufactured value, which he terms PMV. His viewpoint is that PMV is a proxy for cost, time and quality predictability plus greater efficiency in the production process and overall speed of construction (ignoring the complexity of ground conditions that are not part of this new process). This is in line with the concept of value co-creation. He emphasises collaboration and states that BIM needs to be connected with an integrated pre-manufacture-led delivery model in order to become a useful process in the cocreation of value in the industry. He then goes on to return to Egan’s (1998) model of the car industry and the chassis standardisation followed by customised design within, as he terms them, certain DfMA parameters. This is a radical view of the industry but comes out of the one-sizefits-all mould. For a critical review of this model, see Green (2016).

Supply chain This scenario brings into sharp focus another issue, supply chain management (see also Chapter 17 for additional relevant examples). On the basis that many construction companies are now hollowedout shells that buy in services, materials and facilities, it is necessary to draw the supply chain into the design and construction processes at a very early stage. This issue is addressed in the following sections. IPD is a challenge to the legal profession to actually provide a framework within which IPD can take place. This means, along with the rest of the industry, that a different attitude and perspective needs to be taken. A particular problem for the supply chain is security of payment and cashflow. The construction industry has long been renowned for its tardiness in settling bills and is notorious for its high level of bankruptcies due to cashflow problems, particularly for small-to-medium enterprises (SMEs). Getting the supply chain on board for IPD projects will be a very difficult problem unless there is some move towards security of payment and transparent project bank accounts. It is in this area that blockchain may be a practical solution to payments and the development of a more trusting industry. Blockchain (readers may wish to refer to Chapter 16) can ensure the financial capability of parties through the transparency of the cashflow information in the blockchain database. Prompt payment may be ensured through enhanced coordination within the project team and facilitate information exchange as to actual progress. Also, valuations may be simplified through innovative uses of new technologies such as BIM models, photogrammetry and point cloud. Thus, value is derived not only by the client and contractor but also their supply chain. Given the argument presented above, it should be obvious that value management is not purely about value for money. If one follows this paradigm then the collaborative, cooperative, synergistic and engagement properties of IPD will be neglected. Hence, the definitions of value management and value engineering presented above are, in fact, in need of re-drafting to include the collaborative and digitally enabled processes needed to deliver real value throughout an asset’s life.

Barriers to value In changing the delivery model the industry needs to adopt different processes and different mechanisms in order to deliver value. As we shall see later, this involves more upfront early engagement of the design and construction team as well as those who will run and operate the asset. If we do not accept this way of thinking about value then, to be frank, IPD has no role to play. 77

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Put simply, we are talking about customised products, services and processes. Co-creation of value will not occur readily in a transaction-based market. That will lead to opportunistic behaviour, as noted in Rowlinson and McDermott (1999) and others. The failure of partnering approaches to deliver value, in general, to the client was perhaps a function of lack of appropriate, robust information technology and information management but was, at least, well-intentioned. Alliancing, although an advance on partnering, suffered the same problems in terms of information management and use. Once we move into the realm of CDE and collaborative design and construction the whole issue of value becomes much clearer and much more important to every project participant. It also leads to additional demands for co-production and upfront costs. Leiringer et al. (2009) address this “value agenda” issue from the critical perspective of the way construction organisations operate. They opine: An in-depth case study of three operating divisions within a major construction company illustrates that firms are unlikely to reorientate their business in response to the ‘value agenda.’ In the case of PFI, the tendency has been to establish specialist units for the purposes of winning work. Meanwhile, institutionally embedded operating routines within the rest of the business remain broadly unaffected. (p271) Green and May (2003) reinforce this notion with a critical take on “re-engineering construction.” They critique the declaration of cost reduction and improved value for the customer and explain the re-engineering agenda’s attractiveness to construction as reinforcing the industry’s way of thinking and its approach, which is to ignore complexity and focus on a “mechanistic quest for efficiency.” This is another example of the ignorance that pervades the industry despite these issues having been raised over 50 years ago in Tavistock’s terms of “interdependence and uncertainty.” The industry blithely follows this misguided agenda with inevitable consequences: “The continued adherence to machine metaphors by the construction industry’s top management has directly contributed to the ‘bad attitudes’ and ‘adversarial culture’ that they repeatedly decry” (p97). A continuing debate has been running in Hong Kong concerning the differential toll fees charged by the three cross-harbour tunnel companies. These tunnels are within 12 km (kilometres) of one another. The Central tunnel, now owned by the government after completion of a 30-year franchise, charges much lower fees and is constantly heavily loaded, whereas the other tunnels are not so. This situation adds to congestion from the tunnel to Central and beyond. To alleviate the problem, a bypass between Central and Wanchai has been built at a cost of US$4.5 billion and ten years’ construction time. It may well be that if the tunnels had all been brought under one centralised pricing scheme the bypass may not have been needed. This is an example where the public and government don’t have value but the franchisee needs to be treated fairly and given value for its investment. This is a typical short-focus project value example rather than a network or program-wide focus value optimisation. Using this three-tunnel syndrome as an examplar, the decisions being made are political and not economic or rational. Why is this? Why do we attempt to develop procurement systems which are rational, logical and sustainable when the decisions made are mainly political and aimed at survival or the popularity of political parties rather than economics and societal benefit? So, how could IPD make any impact on such a scenario? Quite simply, if the working groups and committees are aware of the consequences of the lack of early involvement of all participants, they may actually ask for more information at the inception phase. This, properly managed, would lead to the generation of long-lasting and forward-thinking concepts of value. 78

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This type of scenario supports both the views put forward by Flyberg (2008) and those of Love and Ahiaga-Dagbui (2018). The former suggests that the system should be devised in such a way that bias is limited as far as possible, and the latter indicates that by using proper scoping and estimating approaches that any bias can be counteracted by knowledge and facts. Hence, IPD can be adopted as an overarching philosophy for all forms of facility development. The issue is how can the layman and the unsophisticated client be educated to this end? Indeed, we have come full circle to this Tavistock (Crichton, 1966) view on interdependence and uncertainty and the lack of client capabilities. This has been reflected time and time again through the work of Winch and Leiringer (2016), Ireland (1983), and, to some extent, Farmer (2016).

Value and cost of IPD In an attempt to look at value in IPD, Lu et al. (2015) examine what they describe as the project time-effort distribution curves. In order to do this they take two projects that are ostensibly BIM and non-BIM projects. Based on analysis of the billings of consultants and contractors and other project participants they produced two curves that represent the effort put into the design and construction processes. Although this is not an exact study it does give an indication of the amount of effort that occurs upfront in a BIM-enabled project compared to a traditional project. In figures 6 and 7 of the paper they show that there is substantially more effort put into the design stage of the BIM project than for the traditional project and that, surprisingly, the design process is shorter than that for the traditional project. The ratio in this particular sample was 33% to 41% of total project time. This equates to a roughly 25% time saving. However, we need to look at this in more detail. The real value in this process is not the time saving but the completeness and functionality of the design. This particular piece of research took the “MacLeamy Curve” approach (Construction Users Roundtable, 2004, see www.thenbs.com/knowledge/bim-implementation-hok-buildingsmart), and adopted the premise that the existing design-bid-build system is a fatally flawed system. In this they referred to the silos in which architects, engineers, surveyors, and the contractors and supply chain are placed in the traditional system. The flaw in the argument here is the focus on BIM. Lu et al. (op. cit.) indicate that the BIMenabled processes encourage early collaboration, information sharing and a team effort. However, this is not sufficient to enable full IPD. The underpinning mechanism for IPD is the development of a readily accessible CDE. Thus, although the research reports that BIM is the driver of this process, in fact it is IPD enabled by CDE that is the real driver. There is no doubt that this research is useful in that it indicates the upfront loading of the effort of the whole range of design consultants and supply chain and FM professionals and leads to the conclusion that the fee structures for IPD projects need to be very different. This is necessary, as the expectations and deliverables of the participants are more intensely packed into the front end of the project. If we accept this view, then we are in a position to look at the IPD process more carefully. This process indeed adds value by identifying, discussing and collaborating on, and solving, problems at the design stage. Incidentally, as part of the process, this also enables the incorporation of safety in design into the project development system (see Chapter 25). As such, greater value can be generated through enabling this IPD process. Not only are better solutions developed but the cost and time implications of these solutions are apparent to all in the project team. Indeed, part of the value from IPD is the mechanism by which knowledge is exchanged between the professional silos and the way in which knowledge is captured within the project team and, most importantly, the home base of each of the project participants, i.e. their own companies. The logical outcome of this process is that the industry becomes more aware of 79

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the needs and constraints on its fellow professionals and it develops a greater knowledge base and understanding of the processes that have to be interlinked in order to provide successful, high-value solutions. In his article “the know-how paradox.” Vyas (2014) indicates the need for a fresh approach to how projects are managed in Hong Kong he states “ultimate project success comes down to the performance of key individuals and teams” (p32). This is where many projects hit “the know-how paradox.” He goes on to discuss what he calls the six key platforms that enable complex projects to be completed successfully. He labels these: envisioning; planning; cascading; learning; sustaining; and accountability. He emphasises engagement of the entire supply chain and, in cascading, he focuses on “engaging the interest, commitment and ownership of project success across the breadth and depth of the key delivery organisations.” In essence, he is setting up a framework for the IPD approach.

Where to now? Value is an ill-defined defined concept in many ways in the construction industry and, having reviewed value engineering and value management, we can say that neither of these approaches really addresses the needs of the construction industry client. The real nature of value that we are addressing and striving to achieve is value which is co-created by an early involved, integrated team that is committed to collaboration on the delivery of an asset. This co-creation involves all of the project participants including the supply chain. The co-creation process can be driven by integrated project delivery. However, there are many institutional barriers to this but not least of which are the professional silos apparent in the construction industry. Value can be created by adopting an inclusive process and by focusing on the asset being produced and not on the project per se. This is an approach that is sometimes seen in the construction industry but quite rarely. Property developers and insightful public bodies can achieve this. However, the majority of projects are run as finite-length projects and not as providers of assets. Without having an understanding of a client’s business model and business processes it is really not possible to deliver true co-created value. This is the goal that the industry has to strive towards.

Discussion and conclusions This chapter focuses on value, not only value in its transactional economic sense but also in its social, environmental, value sense. Much value generated by project work is hidden and unrecognised. The value of knowledge gaining and innovation is touched on in this chapter and elsewhere in the book (see Chapter 11 and Chapter 18 in particular). Chapter 23 discusses value in terms of ethics and CSR and Chapter 14 discusses stakeholder value at length. We can see from the scope of this whole book that value generation and co-generation is closely linked to both integration and collaboration. Value does not stop at the project handover phase as Chapter 24 makes clear. The question originally raised in this chapter was: what is value in asset delivery? We have answered this question by raising the level of understanding to encompass value proposition of a broad range of valid stakeholders. Value to whom? The most banal and obvious value is the return on investment (ROI), which is a particularly ambiguous and misunderstood concept given that the highly transactional view restricts investment as financial (not commitment, energy, motivation and intellectual) input and return is simply calculated by monetary returns! That view is thankfully passing into history as even capitalist-minded folk accept that sustainable 80

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returns are the endgame. Returns are more increasingly seen, and demanded, as being sustainable returns. Sustainability in energy consumption may be an obvious area of sustainable returns that has piqued interest recently (Brandon, 2012; Badi and Pryke 2015; Keeys and Huemann, 2017). We can see this perspective widening. Clearly, value is more recently seen as being ‘long term’ and involves not only direct stakeholders, such as the project delivery teams (in terms of fees and income return, kudos or reputational status, but also learning opportunities). In terms of value, it lies in the ‘eye of the beholder;’ it is sometimes expressed in a value proposition, though often unexpected, intangible, human capital, social or environmental value is recognised and captured serendipitously. On that point, serendipity is not ‘luck’ but prepared vigilance to take advantage of circumstances that arise that offer opportunity. Value as discussed in Chapter 8 is best designed-in through processes, approaches, mentalities and culture. Chapter 16 offers examples of opportunities for value-adding through the digital economy and associated technology advances. Chapter 20 provides some cautionary perspectives on being too ‘gung-ho’ about technology and digitisation as being some form of magic wand to deliver value. We have stressed in this chapter that value is multi-faceted and that it is derived from a combination of people and resources (that includes digital and information technologies) in a combination that is complementary and supportive. We could summarise by saying that value generation and co-generation is institutionalised, as outlined in Chapter 2, and as Scott (2014) has argued, through governance or regulative regimes being put in place to promote and champion value creation. The normative pillar of values that people engaged in value co-creation have, may be adopted to value a wide spectrum of outcomes. These values may be regarded as valid project outputs. The unique ability of people to make sense through using their cultural-cognitive abilities enables them to create value, given the rules and regulations and cultural environment they must work within.. In this way, value and the concept of what value may mean can be expanded to embrace both tangible obvious value as well as intangible shy-value (shadow-value) propositions that may not be explicitly expressed but emotionally conveyed.

References Anderson, J. C., Narus, J. A. and van Rossum, W. (2006). “Customer value propositions in business markets.” Harvard Business Review. 84 (3): 90–99. Badi, S. M. and Pryke , S. D. (2015). “Assessing the quality of collaboration towards the achievement of Sustainable Energy Innovation in PFI school projects.” International Journal of Managing Projects in Business. 8 (3): 408–440. BIM+ (2019). RMD Kwikform uses 3D printing to solve bridge puzzle, www.bimplus.co.uk/technology/ rmd-kwikform-uses-3d-printing-solve-bridge-puzzle. Bradley, G. (2010). Benefit Realisation Management. Aldershot, UK, Gower. Brandon, P. (2012). “Sustainable development: ignorance is fatal – what don’t we know?” Smart and Sustainable Built Environment. 1 (1). Breese, R., Jenner, S., Serra, C. E. M. and Thorp, J. (2015). “Benefits management: lost or found in translation.” International Journal of Project Management. 33 (7): 1438–1451. Construction Users Roundtable (2004). Collaboration, integrated information and the project lifecycle in building design, construction and operation. Cincinnati, OH, The Construction Users Roundtable (CURT): 20pp. Crichton, C. (1966). Interdependence and Uncertainty. Abingdon, Oxon, Tavistock Publications Limited, Routledge. Egan, J. (1998). Rethinking construction – the report of construction task force. Report. London, Department of Environment, Transport and the Regions, ISBN 1851120947: 38pp. Farmer, M. (2016). The Farmer Review of the UK Construction labour market: modernise or die. London, UK, Construction Leadership Council: 80pp.

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Steve Rowlinson and Derek Walker Flyvbjerg, B. (2008). “Curbing optimism bias and strategic misrepresentation in planning: reference class forecasting in practice.” European Planning Studies. 16 (1): 3–21. Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Boston, MA, Pitman. Freeman, R. E., Harrison, J. S., Wicks, A. C., Parmar, B. L. and de Colle, S. (2010). Stakeholder Theory: The State of the Art, Cambridge, U.K., Cambridge University Press. Gil, N. (2017). “A collective-action perspective on the planning of megaprojects.” The Oxford Handbook of Megaproject Management. Flyvbjerg B. Oxford, Oxford University Press: 259–286. Green, S. (2016). “Modernise. . . or not.” Construction Research and Innovation. 7 (4): 24–27. Green, S. and May, S. (2003). “Re-engineering construction: going against the grain AU – Green, Stuart.” Building Research & Information. 31 (2): 97–106. Green, S. D. (1994). “Beyond value engineering: smart value management for building projects.” International Journal of Project Management. 12 (1): 49–56. Grönroos, C. (2004). “The relationship marketing process: communication, interaction, dialogue, value.” Journal of Business & Industrial Marketing. 19 (2): 99–113. Heikkinen, M. and Airola, M. (2013). “Towards enhanced value co-creation in project-based organisations: a case study in Finnish project alliance pilots.” EURAM 13th Democratising Management. Istanbul: 32pp. Ireland, V. (1983). The role of managerial actions in the cost, time and quality performance of high rise commercial building projects. PhD thesis. Sydney, University of Sydney. Jones, T. M. and Wicks, A. C. (1999). “Convergent stakeholder theory.” Academy of Management Review. 24 (2): 206–221. Keeys, L. A. and Huemann, M. (2017). “Project benefits co-creation: shaping sustainable development benefits.” International Journal of Project Management. 35 (6): 1196–1212. Kelly, J., Morledge, R. and Wilkinson, S. (2002). Best Value in Construction. Oxford, Blackwell Publishing. Leiringer, R., Green, S. D. and Raja, J. Z. (2009). “Living up to the value agenda: the empirical realities of through-life value creation in construction AU – Leiringer, Roine.” Construction Management and Economics. 27 (3): 271–285. Love, P. E. D. and Ahiaga-Dagbui, D. D. (2018). “Debunking fake news in a post-truth era: the plausible untruths of cost underestimation in transport infrastructure projects.” Transportation Research Part A: Policy and Practice. 113: 357–368. Lu, W., Fung, A., Peng, Y., Liang, C. and Rowlinson, S. (2015). “Demystifying construction project time–effort distribution curves: BIM and non-BIM comparison.” Journal of Management in Engineering. 31 (6): 04015010. Lusch, R. F. and Vargo, S. L. (2004). Service Dominant Logic: Premises, Perspectives, Possibilities. Cambridge, U. K., Cambridge University Press. MacDonald, C. C. (2011). Value for money in project alliances. DPM Thesis, School of Property, Construction and Project Management. Melbourne, RMIT University. Male, S., Kelly, J., Gronqvist, M. and Graham, D. (2007). “Managing value as a management style for projects.” International Journal of Project Management. 25 (2): 107–114. Näsholm, M. H. and Blomquist, T. (2015). “Co-creation as a strategy for program management.” International Journal of Managing Projects in Business. 8 (1): 58–73. Office of Government Commerce (2007a). Gateway Review Workbooks. London, The Stationary Office (TSO). Office of Government Commerce (2007b). Managing Successful Programmes. London, The Stationary Office (TSO). Office of Government Commerce (2007c). The OGC Gateway™ Process – A Manager’s Checklist. London, The Stationary Office (TSO). Prahalad, C. K. and Ramaswamy, V. (2004). “Co-creation experiences: the next practice in value creation.” Journal of Interactive Marketing. 18 (3): 5–14. Rowlinson, S. and McDermott, P. (1999). Procurement Systems: A Guide to Best Practice in Construction. London, E. & F.N. Spon. Scott, W. R. (2014). Institutions and Organizations. Thousand Oaks, CA; London, Sage. Söderlund, J. and Tell, F. (2011). “The P-form corporation: contingencies, characteristics, and challenges.” The Oxford Handbook of Project Management. Morris P. W. G., J. K. Pinto and J. Söderlund. Oxford, Oxford University Press: 201–223. Tarantino, D. P. (2006). “Creating customer value propositions.” Physician Executive. 32 (6): 76–77. Tell, F. (2016). “Managing across knowledge boundaries.” Managing Knowledge Integration Across Boundaries. Tell F., C. Berggren, S. Brusoni and A. Van de Ven. Oxford, UK, Oxford University Press: 19–38.

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Value from an IPD perspective Thiry, M. (2001). “Sensemaking in value management practice.” International Journal of Project Management. 19 (2): 71–77. Vyas, V. (2014). The know-how paradox. Hong Kong, British Chamber of Commerce Hong Kong. Knowledge Hub. 32: 34–35. Walker, D. H. T., Matinheikki , J. and Maqsood, T. (2018). Level crossing removal authority Package 1 case study. Melbourne, Australia, BIM+ Research Group, School of Property, Construction and Project Management, RMIT University: 38pp. Winch, G. and Leiringer, R. (2016). “Owner project capabilities for infrastructure development: A review and development of the ‘strong owner’ concept.” International Journal of Project Management. 34 (2): 271–281. Woodward, J. (1958). Management and Technology. London, Her Majesty’s Stationary Office (HMSO). Zwikael, O. (2018). “Setting effective project benefits.” 2018 IRNOP - A Skilled Hand and a Cultivated Mind. Walker, D. Melbourne, RMIT: 20pp. Zwikael, O. and Smyrk, J. (2011). Project Management for the Creation of Organisational Value. London, Springer.

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5 THE ROLE OF THE CLIENT Steve Rowlinson and Derek H. T. Walker

Introduction This chapter aims to present a client-based critique and client perspective on procurement systems and IPD. We develop the notion of IPD as a disruptive process innovation that focuses on information-based project and facility delivery. This notion is underpinned by the work of Winch and Leiringer (2016) on client capabilities and Söderlund (Söderlund and Tell, 2011) with the notion of the P-form company. However, our view of IPD would be quickly out of date if we talked solely about current issues. Hence, we go back to basic principles and systems rather than dwelling on new technologies and current innovations; these are dealt with in Chapter 16. To reinforce this view we start by presenting a historical, conventional view of the client and how the client goes about procuring construction projects. This view is shown to be one that is based in a long history of traditional professional values and approaches and, until recently, has changed little. A number of seminal reports (as well as contemporary ones) are referred to in this discussion and these are used to reflect the slow pace of change within the industry. We introduce the argument that much of the historical research and practice on procurement systems has been structure- and process-driven, based on professional silos and sequential structuring of inputs, and has not focused on a collaborative project process of reciprocal information exchange. The advances in information communication technology (ICT) have served to highlight this crucial weakness and facilitate the disruptive process innovation (see Chapter 16). This chapter looks at procurement systems from a client perspective and tries to put IPD in context. Going back more than 50 years (see, for example, Murray and Langford, 2003) we note that forward thinkers were calling for a change in the way construction was procured. The key background thoughts were about interdependence and uncertainty and the key issue identified to be addressed was integration of the client into the project process. IPD is an evolving and developing concept. It is rooted in the notion that information is the most important aspect of project delivery. That this information has to be developed, at its most basic form, at the very outset of the project, cuts across all of the conventional views of sequential plans of work and the roles of the individual professions in providing expertise and information. This is why we recognise IPD as a disruptive innovation and change-agent. We then go on to discuss client capabilities and client organisation. The view is put forward that the client should be regarded as an organisation and that the organisation needs 84

The role of the client

to adapt and reflect on the needs of its projects. This is followed by a discussion of how procurement systems fit into this modern view of the client’s organisation and the role of IPD in addressing these issues. For a more traditional view of procurement systems and how they can be fitted to clients and projects, the reader is directed to our previous work, Walker and Rowlinson (2008, pp32–69) and Rowlinson and McDermott (1999, pp23–49), which dealt with conventional views of procurement systems. It is worthwhile at this stage of our discussion to describe the conventional views of participants in the building process and how these views have shaped, or entrenched, current procurement systems. A discussion of the evolution of current processes in the industry and the way in which the participants interact in the project delivery team follows in order to provide a framework within which this Handbook develops.

Perspectives on the client It appears that over the past decades the client has been putting its views on the construction industry more and more forcefully. Slough Estates perhaps initiated this stridency in a public manner in 1976 with the publication of Industrial Investment (Mobbs, 1976) that, inter alia, accused the UK construction industry of poor performance due to “the utilisation of out-dated building methods.” This was an expression of a lack of confidence in the ability of all of the participants in the building process to work together efficiently and effectively. Recently, at a meeting of the British Chamber of Commerce Construction Industry Group in the Hong Kong Club, a leader in the services industry said, “I believe that if the industry’s objective is to satisfy my needs, then it is failing to do so” (Chatham House rules apply). At the same meeting, a director of estates for a major developer pointed out that traditional procedures could not be followed in the real world and that, “It is a fallacy in most client organisations to assume the client can be one person.” This view was reflected many years ago in a paper by Cherns and Bryant (1984) that criticised construction industry leaders for oversimplifying the role of the client and suggested that a nonunitary view of the client was needed. Further, they stated that a client’s history and a project’s pre-history must be studied to understand fully the construction process. They implied that the poor performance compared with, say the USA or Australia, is a problem of the clients “organisational deficiencies as much as it is the shortcomings of the construction industry.” This view has its genesis in the Tavistock report (Higgin and Jessop, 1965) some 20 years earlier. A little further on that report notes that the building industry’s reaction to this is an impatience with this complexity and that a lack of skills necessary to resolve the problems of interdependent decisions is a manifestation of this. Bryant returned to this theme in his paper with Cherns (1984, p180): Each participant can be seen to be bringing to the table his own sense of what is at risk personally, as well as what is at stake professionally or departmentally, in the forthcoming project experience . . . Many of the stakes are reputational. The client can be an agent for change in the construction industry but too little information is available on options for the control of projects. This influence was also acknowledged by Andrews (1983) in his article entitled “The Age of the Client” where he discussed the clients’ role in the building process and his satisfaction with the outcome. These discussions took place over 30 years ago and yet the debate worldwide still fails to address these issues appropriately. 85

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Lansley (1984), in discussing the classification, assessment and education of clients, reported that: “research would focus on the way in which client needs are initially presented to the industry and the way in which clients’ sophistication (i.e. the demand or need for professional skill) is complemented or ignored by the industry.” Thus he acknowledged that the client body is heterogeneous and has some varying level of input to make to the construction process. So, past issues have been ignored by the industry but in recent times the client is making its presence felt in a powerful manner: so, what is the nature of the client body?

The client body Forty years ago the Wood report (1975, p25) discussed the “sponsor (committees)” of the building process when analysing the role of public clients and the Tavistock report (Higgin, 1964, p89) referred to the “initiator” of the process. There was an implicit recognition in both that the sponsor is not necessarily the end-user of the building and that the initiator may be a group of interested, competing parties. To quote from the second Tavistock report (Crichton, 1966, p39): “The client” is a complex system of differing interests and “the client’s” relationship is seldom with a single member of the building industry . . . These client systems . . . are made up of both congruent and competing sets of understandings, values and objectives. Much design and even building work has proved to be abortive because unresolved or unrecognised conflicts of interests or objectives within the client system have only come to light after the building process has been initiated. “The role of the client, then, we cannot treat the ‘client’ as unitary.” It is sad to report that very little has changed over the past 50 years and many clients still face this lack of understanding from industry participants. So, if the client is viewed as complex, in that there are many facets to its character and decision-making process, and the client is also dependent on other organisations, or parts of its own organisation, for the inputs and constraints placed on the decision to build, is the industry providing appropriate procurement systems? Once the industry comes to terms with this historical legacy there is scope for new procurement paths. Those procurement paths include IPD, the Holy Grail of the construction and building industries, as far as the client is concerned. This complex client also brings elements of uncertainty to the project if unresolved conflicts are allowed to continue. Hence the need for IPD. Although the client is likely to be nonunitary, it may well be singular in the sense that, although it may be categorised as a member of a subset (such as a local authority), it is unique and has its own peculiar needs and ways of operating. A more detailed, operational view of the workings of the client organisation centres on decision-making. Take for example West Kowloon Cultural Authority in Hong Kong, which is tasked with developing what some consider to be the equivalent of the South Bank in London in under two decades. This complex client is certainly a political animal and may appear schizophrenic if funding is coming from one body, functional requirements from another and detailed requirements from yet another. Legally, the client and its representative are normally well-defined in the contract documents but these only serve to provide the framework within which we can define the procurement system and the informal systems of power and influence developed may well have more influence on the course of a project than these formal authorities. This was reflected by Flanagan in an interview with Building magazine (1981) when he said: 86

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Building is about getting it right for the client . . . we class “client” . . . as one big amorphous thing. For some clients who only build once in their lives it is the most important decision they will make. So how can they understand JCT (the contract) or the standard method (bill of quantities). Indeed, these are alien concepts to most clients nowadays. Very little has changed since and the question of client experience is brought to light here; those with little experience need help in both the formal and informal aspects of the building process and have to come to terms with the roles (and these are multiple) that they will play. The Tavistock report (Higgin and Jessop, 1965, p16) recognised this client sophistication as a scale running from naive to experienced and, if one takes account of the facility of in-house building professionals, one can define a single concept, sophistication, which is reflected in the client’s reduced need for professional skills supplied by the building industry. Such is the case with the Big Five property developers in Hong Kong who are driving change in the industry with their in-house BIM teams, decentralised to site, and their adoption of an integrated delivery approach involving their supply chain and including facilities management (FM) and even electricity suppliers. This raises the issue of where the client stands in relation to the building industry: it can be totally outside of it or it can be partially within it, e.g. Laing O’Rourke’s housing developments, and District Authority Architect Departments with their own design professionals. No matter who the client is, it is often the case that members of the building team do not actually meet the client first-hand; the architect acts as a surrogate client in many traditional contracts (and designers and contractors know requirements at second- and third-hand only). At a recent symposium in Hong Kong a major subcontractor pointed out that 90% of subcontractors had never met the client, so “They don’t know what his aims are.” This in effect returns to the theme of the Tavistock report from 50 years ago: “communications in the construction industry.” When studying different market sectors we need to consider their specific characteristics. For example, for industrial clients, it is instructive to reflect on other research that focusses on the contingency view. Woodward’s research (1958) affords a useful classification system for industrial clients. She found that technology is a major factor in shaping many organisational features and classified companies as: unit and small-batch producers; large-batch and mass producers; and process producers. This system, with the addition of logistics and distribution industries at the forefront of retail nowadays and new, high-technology industries at the research and development end of the scale, provides a contingency view of industrial organisation. This contingency view can be used as a basis for classifying the client needs of the building industry. Woodward’s seminal work has the merit of reflecting scale, human input to the production process and capital intensity of the particular client and so is a reflection of complexity of not just the facility or building but the nature and complexity of the client organisation. Another outcome of taking such a contingency view is that such categories are indicative of the structuring and authority structures of the client. The later work of Derek Pugh and the Aston Group (Pugh et al., 1968) shed further light on these issues in particular in terms of ownership, control and authority structures and their effect on organisations and organisation decision-making.

Expectations With this change in the nature of the client over time and the move away from singularity of clients, is it possible to establish a set of objectives that are valid across the wide spectrum of building clients? A useful proposition to investigate is that some criteria are universal while 87

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others are likely to be industry or client specific. This leads us to the issue of client capabilities (Winch and Leiringer, 2016). A reasonable set of expectations are as follows. Without doubt the building client has to make some choice over the way the risks in the construction process are to be shared. The client can influence the distribution of risk by its choice of procurement system. Unfortunately, the indicative risk distributions associated with such choices were presented in the context of an ideal world, which construction is not. The fact that the industry experiences frequent time and cost overruns and quality and safety issues places the inexperienced client in a position of ignorance when making its choice, and the sophisticated client has a much more complex decision to make than merely looking at track records. Thus, although the client has the opportunity to choose to some extent the amount of risk it is prepared to take in the building process, the client is faced with a very uncertain outcome no matter what its objectives. The client can distribute the responsibility for design and construction processes according to the capability it has to deal with the building industry. Thus some clients will require single-point responsibility whereas others will accept multi-point responsibility and some role in the co-ordination of design and construction processes. A clear definition of the liabilities of individual members of the construction team is another requirement along with some form of guarantee, whether that be a trade association guarantee or a defects period written into the contract or a soft landing as provided for in BS8536-1:2015 (see Atkin and Rowlinson, Chapter 24). Following on from this, the client will expect a well-established legal framework within which the construction industry operates. The client will also need assurance that the organisations that it appoints have the physical resources and financial capacity to fulfil the project. The failures of contractors in the UK and Hong Kong in 2018 are examples of the shocks that the industry can provide to the client and the supply chain. The client generally has an expectation of receiving unbiased advice, at least from the professionals in the construction industry. One can debate whether a building contractor is obliged to offer the same, but one is always likely to come down on the side of professionalism rather than commercialism, which puts the industry’s reputation at risk if it overrides professional judgement. These universal criteria mirror Maslow’s hierarchy of needs (1943) and are, as such, low-order needs that must be satisfied before the client considers the high-order needs. The lowerorder needs are concerned with confidence in the framework within which the project will take place and over which the client has limited control, while the higher-order needs are those criteria pertinent to the individual project and which the client can influence substantively. Flexibility to change one’s mind is a requirement for many clients, particularly in those sectors that experience rapid changes in technology and design and property developers responding to market changes. Clients must be made aware that a trade-off exists here between final cost certainty and flexibility. Unfortunately, traditional systems have been built around the acceptance of change during the construction process. Such systems are probably over-flexible and while this is normally in the client’s favour it probably does not realise how much it is paying for it. The client will expect a minimum level of disruption to its main purpose while undertaking a project; this level of disruption will vary according to the project and its context and can be controlled to some extent by the procurement path and appointment procedures that the client adopts. Clients expect a particular level of performance from the industry and this performance is measured against a number of criteria that are again dependent on the client, the project and the context of the project. Most writers in this area emphasise time, cost and quality (often neglecting Occupational Health, Safety and Welfare) as the main criteria but little authoritative work has been done to assess the weightings attached to each and, indeed, it is impossible to produce any generic formula to such weightings. Many years ago Banwell (1964), Wood (1975) and the NEDO1 88

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(1988) assumed that the trade-off between time and cost, the time and cost as measured against yardsticks and fastest time, respectively, were the criteria to be assessed. Bromilow (Bromilow and Henderson, 1976; Bromilow et al., 1980) investigated predictability of costs and time and the extent of variations, and the NEDO report (1976) The Professions in the Construction Industry considered that architects had the major interest in quality as far as the construction industry was concerned. Ireland (1983) made the most comprehensive approach to the problem to date by assessing cost per square metre, time per square metre, income per square metre and architectural quality. These views, taken in isolation, cannot adequately account for the trade-offs that occur in setting criteria for performance. For example, cost can be variously defined as cost per square metre; predicted cost; life-cycle cost; maintenance cost; running cost; etc. In many client organisations a lack of recognition of appropriate performance measures has led to the inertia that the industry suffers from in terms of choice of procurement system.

Construction industry expectations In 1975 the Wood report pointed out that “the client has important responsibilities to fulfil and that these cannot be delegated to the designer or contractor” (1975, p25). While not advocating a reduction in the role played by the building industry in procurement, Wood emphasised the strategic role of the client, particularly in the areas of selection of designers and builders, setting key dates, brief development, monitoring at all phases and restriction of major alterations (1975, p31) . Although the client may well wish to delegate much of the authority for this role, perhaps to his principal adviser, he is well advised to heed the warning of Graves who points out that “the standard of service given by the building industry relates closely to the amount of effort expended by the client in establishing a good brief” (Graves, 1978, p5) and “‘satisfaction at the construction stage is closely linked with the degree of control and supervision by the client himself” (1978, p6). The delegation of this authority to control is made difficult for many clients for whom “alternative methods of acquiring buildings are not known” (1978, p8). Hence, although the construction industry expects the client to make appropriate decisions, it has not fulfilled its duty to inform it of its alternatives at an early stage. While advocating client involvement, Wood warned of the danger of interference by the client in areas which are not its responsibility (1975, p26) and it is true to say that the client can be expected to provide certain services to the building industry; most importantly – prompt decisions, timely payments and an opportunity to generate a sensible profit. Finally, the Wood report was critical of the way public clients developed their strategies for dealing with the construction industry. This can be interpreted as the public client’s structure having an undue and rigid influence on its strategy and so on project structures. Over 40 years on from that report, this same inertia is apparent. For example, the Development Bureau in Hong Kong published Construction 2.0 in late 2018 (Hong Kong Government, 2018), a blueprint for industry change coming two years after the Farmer Review in the UK (Farmer, 2016). This inertia has exacerbated the industry’s poor performance and is reflected in the inflexible, inappropriate systems of standing orders leading to competitive tendering and consequent weak performance. The private-sector client is relatively free to view each project individually and make choices concerning its strategy that has led to an appropriate project structure and, it appears, a better level of performance. This improved performance certainly finds support from the way developers have moved towards IPD and made extensive use of BIM and modularisation in their projects. Green (2016) takes up many of these issues in his polemic on the Farmer Review. In fact, Green does not only address the Farmer Review but a whole series of construction industry 89

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reports going back to the 1960s. He addresses the Egan report, (1998), and reflects on its focus on supply chain efficiency, lean construction and how risk and responsibility was moved onto the supply chain as contractors moved away from doing any construction work themselves: the hollowed-out shell model. He then goes on to address the Wolstenholme report (2009), and cites that “we want our industry to embrace the whole, complex picture of how people can interact sustainably with the environment to maximise health, wealth and happiness.” This compares quite dramatically to Egan’s efficiency driven agenda and the report also stated that the era of client-led change was over. The supply side expected to take up cudgels and improve productivity and effectiveness on behalf of the industry. Farmer did point out that the industry was beset by a volatile market that made strategyshaping difficult and that the typical business model was based on low capital reserves. Indeed, Farmer contradicted Wolstenholme in that he promoted change to be driven by clients changing their needs and commissioning behaviours. The intention was to drive what was considered to be positive disruption in the industry. Thus, we see the pendulum of change and change drivers swinging wildly from side to side within the period of a decade. This has been the pattern for many years within the construction industry, as evidenced in the previous sections of this chapter. In addressing this, Green goes on to point out complaints about clients failing to produce well-defined briefs early enough and changing their minds during the construction process. This reflects the views put forward by Tavistock in the 1960s. This desire to simplify the whole of the process belies the fact that construction delivery is a complex issue that requires collaboration and cooperation. Indeed, Farmer misses the whole point of the process in that there was the opportunity to put forward the concept of integrated project delivery which in fact goes against the grain of the hollowed-out shell of the construction industry business model. Thus, a whole series of reports have gone around in circles without addressing the key issue of integration and collaboration. The opportunity now exists for this to take place and the industry must grab this opportunity with both hands.

The construction process The central issue is how does the construction process operate? An understanding of this is essential if the concept of procurement forms and their differences is to be tackled. The construction process is the framework within which the procurement form is situated and according to which the procurement form can be analysed.

The stages The construction process can be viewed as a set of distinct, technical activities; the most wellknown example of this being the RIBA Plan of Work (Royal Institute of British Architects, 1967). This consists of what appear to be twelve independent stages in a project which follow each another in a sequential manner. Wood “defines the construction process to include all activities involved in obtaining a building or civil engineering work” (1975, p3) and NEDO (1976, Figure 2.1) refers to a flow diagram indicating tasks to be completed at various stages of the project in order to explain the roles of the participants in the building process. This representation is simplified in Morris’s Project Life Cycle (1983, p7), a conceptual model which incorporates the four broadly defined stages of feasibility, design, production and start-up in a continuum, rather than as discrete phases. A more detailed model in the publication A Client’s Guide to Industrial Construction (Department of the Environment, 1982) was used to illustrate five 90

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different procurement methods. This model details decisions at each phase of the process and shows logical links from one decision to another and indicates feedback loops. Interestingly, it is deemed necessary to include the people involved and tasks to be performed in order to fully explain the process. Thus, the view of the construction process as a set of discrete activities following end on end is implicitly challenged and the role of people in the process recognised. However, it has taken more than 40 years or approaches such as alliancing to gain recognition (particularly in Australia) and only now is the framework for IPD being explored. Alliancing is based upon collaboration amongst the participants, particularly paying attention to the supply chain and continuing relationships. However, alliancing has been hampered in its development by a reliance at times on old, hard-dollar contracts and tying participants into collaboration by structure rather than information sharing. IPD takes this concept further by engaging with the client’s operating team and the supply chain at the front end of a project, and sharing information in a manner where continuous improvement and adjustment takes place in designs and specifications. To be fair, this facility did not really exist until very recently when information communication technology (ICT) became more sophisticated, powerful and accessible. In short, IPD stimulates collaboration throughout the supply chain and with the client and its facilities managers, through a common-data environment that is the repository of information that is accessible to all and constantly being updated.

The systems approach Higgin and Jessop (1965, p88) saw the building process as starting with “a client’s need to build” and ending with the “satisfaction of this client need.” A feature of the building process was the socio-technical system within which it operated: that is, technical resources of materials and equipment were transformed into the finished building through the resource controllers whose task was to form relationships between interdependent, autonomous organisations by patterns of communications which had more or less social content. In fact three main functions were distinguished in the building process: design, construction and co-ordination (1965, p57). This process, then, is seen as a series of interdependent parts that operates within a system comprising people who manage and supervise it and have their own goals. The process is thus controlled by formal and informal procedures. The design and construction phases are quite clearly defined but the pre-construction and post-construction phases are defined much more fuzzily. Morris (1974, p80) built on the work of Tavistock and emphasises the reciprocal nature of design and construction work rather than it being seen as (Tavistock again) a “sequential finality.” His Ph.D. thesis (Morris, 1972) concentrated on investigating the differentiation, based around Miller’s “Three Ts” (Miller, 1959), and integration necessary at each phase of the construction process, and his explanations were aided by the use of a three-stage model of the building process that divides each stage into appropriate subsystems. Walker, in his book (1985) and Ph.D. thesis (1980), used the technique of linear responsibility analysis to investigate decision-making and appropriate organisation structures for construction project management. Again adopting a systems viewpoint, he saw the project management process as residing within a system of behavioural responses, techniques and technology, organisation structure and decision-making with three main stages – project conception, inception and realisation. In recognising the non-sequential nature of the construction process he added task discontinuity to Miller’s Three Ts (1959). Ireland (1983) adopted Kast and Rosenweig’s model of the organisation (1974, p19) and indicated that he had reversed their proposition of management and structure being dependent systems and conducted his research on the basis that “technology used, structure chosen, the 91

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psychosocial aspects and the way the project is managed will all have an effect on the achievement of objectives” (goals and values subsystem) (Ireland, 1984, p5). Ireland mapped these subsystems to form a model of strategic control of the building process but unfortunately omits any discussion of who should exercise this control. A common strand in the systems view is the recognition of the uniqueness of projects and clients and the adoption of a contingency approach to selection of the procedures and people to mould an appropriate procurement form within the construction process. The aforementioned research into procurement systems all pointed to the need for major changes in the industry’s approach to client needs but the basic human and ICT infrastructures were not aligned at the time to move into the fully integrated mould.

Nature of the stages The sequential finality of the RIBA model imposes a set of frozen roles on the construction process, which have only been released by the adoption of alternative procurement forms. However, one can characterise the pre-construction stage as entrepreneurial in nature in that it requires the generation of ideas and alternatives along with the provision of finance against competing schemes. The design stage is the strategic stage at which the goals of the building team are appropriately defined and the construction phase is the operational end which provides the means of achieving these goals. The post-construction stage is the production phase that sees the operation of the facility and is the ultimate goal of the client. Morris (1983, p6) characterises design and feasibility stages as “evolutionary and organic in character” and the production phase as “highly mechanistic.” These stages are, of course, all interdependent and are separated by fuzzily defined boundaries – “dynamic project interfaces.”

Nature of the process The second report of the Tavistock Institute was entitled Interdependence and Uncertainty and reflected what the researchers felt to be the two most important characteristics to be incorporated in a model of the building process (Crichton, 1966). The overlapping of stages in the construction process and fuzzy boundaries between stages add to communications problems of interdependence already inherent as information has to be made available to more people and organisations more quickly, and this is hindered by the parallel working of organisations and the discontinuity of operations that this causes. Uncertainty thus arising is compounded by the fact that during design many options may be presented for consideration; and uncertainty also exists within the client body, the environment and labour resources. Due to this situation, the informal mechanisms of control in the construction process have a major integrative function but can lead to role-ambiguity and poor performance as often as they can improve the process. This view describes the construction process as a very complex system and it is now incumbent to review the role and structure of the building team in this process.

The building team At some stage during the construction project process the client will make a decision on the selection of the building team and, as this occurs, thought must be given to the roles of, and relationships between, members of the team and the actions needed to manage this team. Cherns and Bryant (1984) apply the concept of the temporary multi-organisation to the building team, “an organisation of organisations” (Stocks, 1984). Elsewhere, the project is seen as having “a 92

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limited objective and lifespan, and therefore with a built-in death wish” and is described as a “weak system compared with the continuous and self-perpetuating drives of other contributing systems” (Association of Project Managers, 1984, p28). Building a team from a wide variety of organisations and motives is thus a difficult and complex task and the following section puts these issues into the contemporary context.

The strong owner We now move on from this discussion of the nature of the client and the way in which the client or owner has developed into a multidimensional, sophisticated organisation. Contemporary views have looked at the capabilities of the client and the client as an organisation that undertakes projects. So we address the question here of how does the client drive IPD? Winch and Leiringer (2016) discuss the issue of client capabilities and focus on the development of the “strong owner” concept. The work focused on infrastructure development but, in fact, could well apply to all types of development, particularly in the real-estate development industry. Indeed, that industry might be an ideal example in which to study integrated project delivery. They take as the starting point (p271) the work of Morris and Hough: “Morris and Hough (1987: Chapter 11) identify the importance of a ‘strong owner’ as a dimension of project success. The theme is revisited in (Morris, 2013: Fig. 10.1) where the importance of the various owner roles is explored.” They then extend this discussion to the work of (Helfat et al., 2007) that identified operational capabilities and dynamic capabilities, but then move on to make projectowner capabilities their focus (Kay, 1993). They then identify within the project-organising domains model three distinct areas where an owner requires capabilities. These are strategic capabilities, commercial capabilities and governance capabilities. Strategic capabilities address the issue of which projects to invest in and why these are chosen. Commercial capabilities address the interface between the “investing owner” and the projectbased organisations that are contracted to supply the intellectual and material resources necessary to deliver the project. Governance capabilities are about the management of the interface between the permanent owner organisation and what Cherns and Bryant (1984) described as the “temporary multi-organisation.” Strategic capabilities include the project-selection process, the definition of the project mission, the raising of capital, the managing of stakeholders and the management of project portfolios. Commercial capabilities include work packaging, determining contractual arrangements and managing relationships. The governance capabilities include assurance of all aspects of the project, project co-ordination and asset integration. As their argument develops, they go on to discuss the question of how owners acquire capabilities and what mix of capabilities they need and what level of capabilities has to be attained. It’s not flagged in their discussion, but a key facilities management issue arises in that the owner needs to learn from the operation of its existing facilities in order to be able to specify improvements and step changes in the new facilities. This issue is addressed in detail in this Handbook in the chapter on virtual facilities management by Atkin and Rowlinson (Chapter 24). In their summary discussion, in section 8, they ask the question: how can the desired maturity and mix of owner capabilities be acquired? They refer to the work of Merrow (2011) and argue the necessity of team integration and specifically the presence of representatives from the operations division at the outset, during project appraisal, and in technology selection. Both of these principles underpin the philosophy of IPD. They go further (citing Cohen and Levinthal, 1990) in pointing out that owners need absorptive capacity. They describe this as “having the 93

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capability to identify and acquire externally generated knowledge that is critical to operational capability, while also learning from their earlier investment projects.” This summary actually points the reader in the direction of IPD. That is the ability to absorb lessons learned, learn from other projects and team members and use these learnings to devise proposals for a new project. This approach is central to the nature of and roles played in IPD. IPD requires contributions from all professions early in the development process, as described in the paper by Lu et al. (2013) and these affect the cash flow of the project with much more front-end loading. This loading also provides the opportunity to achieve greater value in the delivered facility. This leads us to our final question: how does the owner acquire these capabilities? Winch and Leiringer posit two routes, “either endogenously through organisational learning and development, or exogenously through contracting for them.” (Winch and Leiringer, p277) They then discuss different pathways to acquiring capabilities and make the distinction between relational and co-ordination capabilities “relational capabilities can be seen as the outcome of organisational learning through repeated interactions with suppliers. Project coordination capabilities, on the other hand, are predominantly the result of specific human resource investments in the appropriate competencies.” Söderlund and Tell (2011) address these issues from the perspective of the firm and discuss these issues from the formation of strategy and capabilities in what they term the P-form corporation (Project Form). These are organisations that generate projects as a core part of their business. Thus, outside of the core of the business there are permanent employees whose role is to specify and manage projects. This separation can lead to tension in terms of salary and position in the company but also allows these companies to develop project management expertise and knowledge that can be passed on to new projects and also embedded in the organisation.

The evolving client We can now turn to the future and look at the nature of the evolving client. This client can be described variously as strong, embedded in the industry, savvy, sophisticated and logistics-focused. The nature of the client has become much more demanding and the client’s capabilities in terms of managing complex projects have become sharper. Thus, the industry needs to adapt and change its procurement systems, get closer to the client, understand the client’s business models and processes and transform itself into an industry that reacts in response to client expectations. It is quite clear from certain sectors of the industry that the client has capabilities equivalent to many of the conventional contracting businesses. For example, property developers in Hong Kong are used to producing buildings of 40 or more stories for residential, commercial and logistics uses. Such companies are vertically integrated in that they have their own project management units, investment and analysis units, concrete and other materials and systems suppliers, utilities and a whole range of other departments providing support for the core business that is property investment. ITC-based firms have a need for data centres and logistics and distribution facilities and have, within their own organisations, property specialists whose knowledge of the construction industry is deep and who are capable of managing and leading construction teams. Thus, the landscape is changing and what was traditionally the divided-contract approach, where managing contractors and construction managers looked after projects, has morphed into systems whereby the client takes on these roles and directs a series of suppliers, constructors and consultants in a highly integrated and upfront managed team. These changes have led to a demand for early involvement of all of the professional participants such as facilities manager, structural consultants, M and E consultants and modular and prefabricated 94

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unit suppliers. This change has been the driving force towards IPD and has demanded the use of a CDE that supplies, stores and manipulates the information that all of these participants provide, need to know and need to analyse. This IPD process is driven by constant iterations that affect all of the participants and for which rapid responses and alternatives that are innovative are expected. Thus, in this new world of IPD there is a requirement for a great deal of input in terms of information and specification, from all participants at a very early stage. In terms of business processes and business models this requires a much more structured approach to interaction and collaboration and needs a careful consideration of cash flows which are, in the main, frontend loaded. Thus, drawing on the work of Winch and Leiringer (2016) and Söderlund and Tell (2011), we have the beginning of strong client capability that is being driven not only by enlightened government agencies but also by the real estate, logistics and IT industries that are demanding more of the construction industry. Currently, it would be fair to say that most contracting organisations do not have a strong IPD capability. This capability needs to be developed by changing the business models under which they operate and, commensurately, the business processes that they undertake. Thus, we are looking for innovation in both of these areas in order to drive change within the industry. The question arises, is IPD suitable for all projects? The answer to this is obviously no. We can go back again to the work of the Woodward (1958) and the nature of different industries to see that a contingency view is important and necessary in determining the fit between business and process. Thus, for sophisticated clients and for complex or urgent projects, the use of IPD will become an imperative. With the drive towards more modularisation and prefabrication, IPD again comes into its own. So we are looking to a different form of industry in the future and it may well be that the old construction contractors and service suppliers have a diminishing niche in the market and that the new entrants, be they logistics companies, IT companies or property developers, take charge of the nature and direction of the industry. Interestingly, this reformed approach to project delivery requires the ability of participants to visualise not only their own work and designs but also that of others and how these elements fit together. Tools such as 3-D modelling, VR, AR and BIM (more fully discussed in Chapter 16) allow a group of users through a federated model to actually see what is being proposed and designed. However, the individuals need to be able to develop the skills to see in their own minds not only the designs but the consequences for construction and the operation of the facility in use. This is a different skill set that the old, traditional silo-based approach to project delivery ignored. These are, perhaps, skills that the master builders of old actually developed in their own minds and practised intuitively.

A threat to the traditional construction industry? By way of example, we look at a newcomer to the property investment industry, WeWork (CB INSIGHTS, 2019). WeWork is a Japanese investment fund that targets suitable buildings in which to place its co-working space service and may be considered as a P-form company. It is backed by the Softbank group and strives to bring big-data technology to the real-estate market. The focus of the company is to use the data it collects from its renters and clients in order to devise what it believes to be ideal office layouts and to target prime locations. The level of detail goes down to the office and conference room layout and size and also optimal desk combinations and styles. Part of its business plan is to take the data it has collected from its own clients and premises and offer itself as a facilities manager to other companies and investors that do not have access to this depth and level of data. 95

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WeWork sees itself as an end-to-end solution company that is involved in all phases of an office’s life-cycle. As a real-estate developer that leases premises for conversion, the company identifies prime locations, conducts leasing and renting negotiations and designs the co-working office layout and manages the whole product as both facilities manager and investor. As such, the company has had to develop construction renovation skills and optimisation of layouts, including work spaces, meeting rooms, and circulation and entertainment spaces. In order to do this the company is making use of big data and has developed its AI system that collects information on the use of the various areas in its premises and uses this knowledge to adapt and optimise the layouts that it produces subsequently and refurbishes in existing premises. The aim of this is to maximise usage of the spaces and, of course, maximise income. In order to facilitate this, the company has acquired a number of resources, the first being a company that specialises in scanning and turning scans into BIM models. These models are then used as the basis for refurbishing the space and also for collecting data in relation to space usage. The other acquisition is a management platform for communicating between stakeholders in the renovation of the buildings and which allows dialogues between constructors, suppliers, users and stakeholders in order to resolve design and construction issues. Through these and other resources the company is able to log space usage in existing offices and, through its AI system, predict optimal space layouts for its new acquisitions. The scanning technology allows the company to have accurate plans, not just the as-built drawings, which are rarely accurate, and this allows for comprehensive design and both space and energy efficiency issues can be assessed and implemented. This, a real-estate investment company has made use of big data and other digital technologies that have been introduced to the construction industry to find itself a niche in the market. This niche not only challenges the role of existing construction organisations, including the design specialists, but allows the company to develop other niche markets in its field by making itself independent of the old-school construction industry. The company has devised for itself a market and product which it can control and can improve on the old inefficiencies of the traditional construction industry, particularly in this refurbishment sector.

Conclusions The aim of this chapter was to investigate procurement systems from a client perspective to put IPD in context. We did so by taking the reader back to review the evolution of project procurement and delivery over a period of more than 50 years, from several influential government and research organisation’s reports. We also discussed, to set the context of this chapter’s seminal research work from the 1970s onwards. We also drew upon recent research and literature to frame the client’s needs and capabilities and to explore the future through current developments that indicate the way that many projects will proceed in the 2020s and beyond. Clearly, clients need to be more sophisticated, develop dynamic capabilities and absorptive capacity for effective knowledge and innovation use and to take advantage of the digital economy, as will be discussed in Chapter 16. IPD, with its intense levels of collaboration and teamspecialist integration, is ideal for the type of advanced problem framing, re-framing and solving that is required to deliver sustainable and value adding outcomes. As discussed in Chapter 4, this helps to identify and strategise value creation and, as discussed comprehensively in Chapter 8, this needs to be designed-in to the process to be effective.

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Note 1 National Economic Development Office (NEDO).

References Andrews, J. (1983). “The age of the client.” Architect’s Journal. 178 (28): 32–33. Association of Project Managers (1984). Closing the Gaps in Project Management Systems. London, Butterworths. Banwell, H. (1964). The Placing and Management of Contracts for Building and Civil Engineering Work. London, Her Majesty’s Stationary Office (HMSO). Bromilow, F. J. and Henderson, J. A. (1976). Procedures for Reckoning and Valuing the Performance of Building Contracts, 2nd Edition, Special Report. Melbourne, Commonwealth Science and Industry Research Organisation (CSIRO) Division of Building Research Special Report, B3,1–4. Bromilow, F. J., M.F. Hinds, M. F. and Moody, F. (1980). “AIQS survey of building contract time performance.” The Building Economist, Australian Institute of Quantity Surveyors, Canberra. 19 (2): 79–82. Building (1981). “Talking the contract through.” Building, April. London, Building. CB INSIGHTS (2019). www.cbinsights.com/research/report/wework-strategy-teardown, accessed 4/1/2019. Cherns, A. B. and Bryant, D. T. (1984). “Studying the client’s role in construction management.” Construction Management and Economics. 2 (2): 177–184. Cohen, W. M. and Levinthal, D. (1990). “Absorptive capacity: a new perspective on learning and innovation.” Administrative Science Quarterly. 35 (1): 128–152. Crichton, C. (1966). Interdependence and Uncertainty. Abingdon, Oxon, Tavistock Publications Limited, Routledge. Department of the Environment (1982). The United Kingdom Construction Industry – A Client’s Guide to Industrial Construction. London, UK, Department of the Environment, Invest in Britain Bureau. Egan, J. (1998). Rethinking Construction – The report of Construction Task force, Report. London, Department of the Environment, Transport and the Regions, ISBN 1851120947: 38pp. Farmer, M. (2016). The Farmer Review of the UK construction labour market: modernise or die. London, UK, Construction Leadership Council: 80pp. Graves, F. (1978). Construction Industry Recovery. London, National Economic Development Office (NEDO) Green, S. (2016). “Modernise . . . or not.” Construction Research and Innovation. 7 (4): 24–27. Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf, M., Singh, H., Teece, D. and Winter, S. G. (2007). Dynamic Capabilities: Understanding Strategic Change in Organizations. Malden, MA, Blackwell Publishing. Higgin, G. W. (1964). Tavistock Realisation Report – A Sociological Analysis of the Building Process. London, The Tavistock Institute: pp24–25. Higgin, G. W. and Jessop, N. (1965). Tavistock Realisation Report - Communication in the Building Industry The Report of a Pilot Study. London, Tavistock Publications. Hong Kong Government (2018). Construction 2.0 Time to Change. Hong Kong, Hong Kong Government, Development Bureau: 56pp. Ireland, V. (1983). The Role of Managerial Actions in the Cost, Time and Quality Performance of High Rise Commercial Building Projects. PhD thesis. Sydney, University of Sydney. Ireland, V. (1984). Virtually Meaningless Distinctions between Nominally Different Procurement Forms. 4th International Symposium on Organisation and Management of Construction. Handa, V. K. Waterloo, Ontario, Canada, University of Waterloo. 1: 203–212. Kast, F. E. and Rosenzweig, J. E. (1974). Organization and Management: A Systems Approach. New York, McGraw-Hill. Kay, J. A. (1993). Foundations of Corporate Success: How Business Strategies Add Value. Oxford, Oxford University Press. Lansley, P. (1984). “On the client side.” Building. London, Building Magazine: 32–33. Lu, W., Liu, A. M. M., Rowlinson, S. and Poon, S. W. (2013). “Sharpening competitive edge through procurement innovation: perspectives from Chinese international construction companies.” Journal of Construction Engineering and Management. 139 (3): 347–351.

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6 THINKING SYSTEMICALLY TO MOBILISE IPD CAPABILITY Bronte van der Hoorn, Jonathan Whitty and Derek H. T. Walker

Introduction Setting up an organisation to successfully participate in integrated project delivery (IPD) can be a daunting task. In this chapter we introduce the SyLLK model as a tool that can assist an organisation in identifying what is required to mobilise integrated project delivery capability. SyLLK is an abbreviation for Systemic Lessons Learned Knowledge. The model has been developed to assist organisations in viewing and evolving their capabilities (sometimes from lessons learned) in a systemic manner. We start by examining key concepts in systems and systems thinking. This is followed by an introduction of the continental perspective of project work. These foundations then enable us to introduce the SyLLK model and how it can be useful in IPD. To assist us in shifting how we think about organisational capability, such as IPD, we introduce some new terms. We describe an organisation as a series of ‘in-order-tos’ that are together an equipmental totality. All of these in-order-tos are the fusion of six organisational systems (learning, culture, social, technology, process and infrastructure). For each of these in-order-tos to function properly, and therefore the equipmental totality to have its desired capabilities, the six organisational systems need to have the required facilitators enabled to make that in-order-to work. If there is an absence or failure of a required facilitator in any of these systems the in-order-to will be hindered. In summary, we will demonstrate how the SyLLK model highlights that capability and is realised through the coupling of many features across various organisational systems. Simply expecting that setting up building information modelling software (BIM) or hiring staff who have undertaken IPD, or professing that we value collaboration will not be enough to succeed in IPD. Organisations need to take a systemic view to understand IPD capability, and the SyLLK model is a tool to assist with this approach. In taking a knowledge- and organisational-learning perspective we present a complementary angle to Chapter 18, which has a focus on innovation diffusion within IPD projects. Readers may also be interested in Chapter 10, which explores the role of culture in enabling IPD teams to collaborate. Additionally, Chapter 13, which discusses trust and commitment, has relevance to the interaction of people in understanding systems that may be of interest to this chapter’s readers.

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Key terms in systems and systems thinking Before we introduce the SyLLK model and how it can assist us in understanding what is required for integrated project delivery, it is important to clarify key terms commonly associated with systems.

System The word system comes from the Greek term ‘sunistanai’ which means ‘to cause to stand together’ (Senge, 2011). As such, we can define a system as a whole with parts that interact over time with a joint purpose (Proctor, 2008; Senge, 2011). Our world is full of systems. Examples include: our human bodies, organisations, cars, computers, our political systems, and the weather. In any of these examples, we can break the system into parts, but we acknowledge that these parts are interacting for some purpose. A fundamental characteristic of all systems (simple, complicated, and complex) is the interrelatedness of their parts.

Systematic Our next term is ‘systematic’. Systematic has a different meaning to systemic, which we explore below. When we refer to something as systematic, we are characterising it as being methodical, following a plan or sequence, or being ordered (Oxford English Dictionary, 2017). Being systematic infers that we are breaking down a task into orderly parts. We can be systematic in the way we undertake a particular task. For example, we may prepare a meal in a systematic way, according to a recipe, which will result in all the necessary components of the meal being ready at the appropriate time. We may be systematic in holding a meeting, moving through each agenda item one after another, in an order that makes sense given the meeting objectives. If we identify problems in an organisation or project and set out a plan to resolve this problem, we may work through this plan in a systematic (orderly) manner. We would argue that systematic thinking is pervasive throughout the dominant project management bodies of knowledge. The mechanistic and concrete language in the Project Management Body of Knowledge (2013) has been described as systematic (Jugdev, 2012). Such lifecycles and models infer that there is a predictable, pre-planned order of how things should unfold. When we are preparing a project schedule, we are generally systematic in breaking down the work to be done, ordering the tasks in terms of their precedents and then assigning duration estimates. This systematic approach to planning work is not necessarily a problem. However, it is a problem if we believe that projects will unfold in a predictable systematic way, and that this systematic efficiency is all that is required to achieve a project’s deliverables.

Systemic Systemic is the permeating of something throughout an entire object, phenomena or experience. If something is systemic it is pervasive throughout a system. We talk about a virus being systemic in our bodies, or systemic corruption or racism in an institution or society. When we discuss systemic corruption we are referring to the corruption being found throughout all aspects of the system. This may include, for example, particular values that are held and reinforced by the people in the system, protocols and norms in how they interact, and technology systems and physical spaces which allow for the corruption to occur. A systemic view considers an object, phenomena or experience holistically. In the case of project work, we can conceptualise the experience as being the interaction of many different 100

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systems. And in the case of IPD, we can consider many different organisations with the common purpose of achieving set project deliverables. When we use a systemic view we recognise that each and every element in the projects’ systems (i.e. all the various systems of all the organisations involved in the project work) has the potential to either facilitate progress or be a barrier to progress. As such, adopting a systemic approach calls us to critically examine whether we have ‘wired up’ all the involved systems to facilitate, or not, the achievement of our project objectives. When we discuss the SyLLK model, we will provide a particular method for applying a systemic view to project work.

Simple systems, complicated systems, complex systems and complex adaptive systems In recent years there has been growing interest in ‘complex’ project management (Whitty and Maylor, 2009). This is not surprising given that the creation of a distinction between complex and ‘not complex’ projects stratify project managers and awards prestige to ‘complex’ project managers (Whitty, 2008). However, given that it is established that humans are complex adaptive systems, and furthermore there is wide agreement that organisations are complex adaptive systems (Holland, 1995; Keshavarz et al., 2010), and that project work is undertaken by humans that organise themselves (organisations), it is flawed to suggest that any project work could be simple or indeed complicated. Rather, it is more accurate to suggest that some project work harbours more complexity than others. We will digress briefly to distinguish between simple, complicated and complex. If a system is simple, it is relatively easy to predict its behaviour and a relatively small amount of information is required to describe the system (McCarthy et al., 2000). The operation of an analogue clock or water taps in a kitchen could be considered ‘simple’. A more complicated system can still be described and its behaviour predicted, but it will have more parts (Rickles et al., 2007) and it would require considerably more information to describe its behaviour. A car engine or computer could be classified as complicated. However, with complex behaviour it is incredibly hard to accurately predict how the phenomena or experience will unfold or behave as there are emergent properties associated with the parts of the system which cannot just be ‘added up’. As such, it is very difficult to describe the behaviour of a complex system (Bar-Yam, 1997; McCarthy et al., 2000). The weather is an example of a complex system, which can be simulated and modelled. However, knowing exactly what the real weather will do next is incredibly hard, and its behaviour is often described through a range of probabilities. And the longer the range of the forecasting, the more inaccurate the predictions become. We highlight here that simple and complicated are on a spectrum because they share the common characteristic of predictability (see Figure 6.1: part (a)). The rules that determine the behaviour of simple and complicated systems are governed by how the component parts of the system interact, often systematically, with each other. The nature of these interactions can be foreseen at the outset, and therefore the behaviour of the system can be predicted and mapped back to the foreseeable and knowable interactions of the parts, as with a jet engine. If we make a change to a part, we can reliably predict, using our knowledge of engineering rules, how this change will impact on the behaviour. Complex should not be considered an extension of complicated, as the behaviour of complex systems can only be forecast based on a probability. Its behaviour cannot be predicted with any certainty. The rules that determine the behaviour of a complex system emerge out of the relationships of the parts. The nature of these relationships is incredibly hard if not impossible to 101

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foresee at the outset. The rules for a complex system’s behaviour are therefore determined by the conditions of the system (the relationship of the parts) at any moment in time. Any change in the relationship between the parts can have unforeseen effects. Within the concept of complex systems there is a spectrum of greater or lesser complexity which is commensurate with the extent of emergent behaviour (see Figure 6.1: part (b)). A complex adaptive system is a special case of a complex system. Complex systems such as the weather do not have a structure that enables them to adapt to their environment. However, complex adaptive systems like human civilisation, stock markets, social insect and ant colonies, the human body and human brain, do have structures that enable them to adapt and therefore modify their behaviour to their changing environment (Bak, 1997; Bar-Yam, 1997). From an evolutionary point of view, the structures and features of complex adaptive systems have been shaped by the various processes of selection, and their features and traits (their adaptations and behaviours) have been fashioned by their environment and inherited from their predecessors (Kauffman, 1993). The implication of this exploration of the various types of systems is that we can clearly identify that all projects are a form of complex adaptive system as their environment and actors (human beings) are themselves complex adaptive systems. The only distinction we can make is that some projects are more complex (i.e. less predictable and more difficult to describe the behaviours of) than others.

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(a) The spectrum of simple and complicated systems

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(a) The spectrum of complex systems Figure 6.1  The two system spectrums, parts a and b

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Complex adaptive systems Given that we have established that all project work is the product of a complex adaptive system, we can explore this system type in greater depth. There are two complex adaptive system characteristics that are most pertinent for our discussion of the SyLLK model. Firstly, complex adaptive systems manifest behaviour which is emergent. That is to say that the behaviour of a complex adaptive system cannot be simply inferred from aggregating the behaviour of its components (Bar-Yam, 1997). Rather, the behaviour of the system is in how the elements of the system are coupled at any instant in time, which results in the emergent rules that drive the behaviour (Holland, 1992). In terms of our examination of projects, this means that for project work to exhibit a behaviour (e.g. achieve a particular deliverable) we need to take into account that no single element involved will enable achievement of the behaviour. Furthermore, we need to pay attention to how all the elements of the system are coupled together, as this will determine the overall behaviour experienced. A related concept to what we are saying here is that there is no central point of control in a complex adaptive system (Holland, 1995; Keshavarz et al., 2010). Control, or the behaviour of the system, is distributed across the elements of the system (Holland, 1995; Keshavarz et al., 2010). In simple terms, we can say that the capability (the required behaviour) to deliver project work is distributed across the various elements of the organisation or organisations. And it is critical that we pay attention to how these elements of the organisation (or organisational systems) interact with each other. The second feature of complex adaptive systems that is pertinent to the SyLLK model is evolution. As introduced above, the structures of complex adaptive systems are shaped by their environment (Stacey, 2007). To be specific, in a complex adaptive system, over time, the structures and behaviours evolve (change) in a manner that can benefit its survival in its environment (Smit et al., 1999; Edelman et al., 2009). It has been acknowledged that the structure of organisations also adapt to the pressures of their environments (Dosi and Marengo, 2007). The environment in this context also includes the cultural environment in which people think and act. We leave our discussion here on those aspects, as the culture of IPD projects is more fully explored and discussed in Chapter 10 and implications of trust and commitment on the intentions and actions of people is also further discussed in Chapter 13. Organisations involved in IPD may or may not have structures that enable them to behave in a manner conducive to IPD. If an organisation is involved in IPD but their organisational systems have not changed in a way commensurate with IPD, then it will need to change its structures to create favourable alternative behaviours. However, this changing (or adapting) must be systemic and the broader environment supportive of the changes. If this not the case, the organisational systems will continue to exert their influence and create behaviours that will ultimately threaten its survival in the IPD environment and even the success of the project work. To summarise our clarification of these key terms: all project work occurs as a result of the behaviour of a complex adaptive system. In fact, we could consider that project work occurs as a result of a mega-complex adaptive system that comprises many other complex adaptive systems that are inextricably coupled. With this knowledge, we know that the experience of project work will be dependent on the emergent behaviour of many interacting elements of many systems. Simply: that project work has a systemic nature where progress or issues are generally attributable to multiple elements and how they are interacting (rather than a single element). Furthermore, this complex adaptive system which is attempting to deliver the project work has evolved and will evolve due to various pressures in the environment.

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A continental perspective of project work Looking for new ways of thinking about project management There continues to be ongoing dissatisfaction with the prominence of project failures and the offerings of the project management literature (Cicmil and Hodgson, 2006; Thomas, 2006; Winter et al., 2006; PM Solutions Research, 2011; Bloch et al., 2012; KPMG, 2013; Alenezi et al., 2015; Chanda and Ray, 2015). As such, researchers have been driven to consider alternative theoretical foundations of the project management discipline. Traditionally, the dominant paradigm underpinning project management’s bodies of knowledge has been positivism (Bredillet, 2004). Positivism is associated with analytical philosophy, which is characterised by quantification (Given, 2008), scientific empiricism (Pasch, 1959), and the ability to generalise (Critchley, 2001). We see this positivist or analytical thinking in the bodies of knowledge in the process flow diagrams that seek to provide a universal sequence of steps for various knowledge areas. To the uninformed, one could be mistaken in believing that following these project management body-of-knowledge processes would be sufficient to deliver project work. Since 2006 and the Rethinking project management network (Winter et al., 2006), there has been growing discourse on alternatives to these traditional positivist foundations. The proposal of project management ‘becoming’ rather than ‘being’ (Lineham and Kavanagh, 2006; Chia, 2013) is one such example. Furthermore, Cicmil (2006) discusses the benefits of a critical and interpretivist approach to studying the discipline. A continental, and particularly Heideggerian project management paradigm, is also proposed by van der Hoorn and Whitty (2015;2016), and van der Hoorn (2016). We now discuss this particular perspective in detail, as it provides an important paradigmatic base for the SyLLK model.

The foundations of a continental perspective of project managing The continental perspective of project management is grounded strongly in German philosopher Martin Heidegger’s (1967) magnum opus Being and Time. This monograph proposes an alternative way of seeing the world, and provides a contrasting perspective to the positivist or analytical world view. A full discussion of Being and Time is beyond the scope of this chapter. However, we select some key concepts from the monograph which are critical to the alternative conception of project work that has been built by van der Hoorn and Whitty (2015;2016) and van der Hoorn (2016).

Modes of being Heidegger (1967) distinguishes between four modes of being: Dasein, ready-to-hand, unreadyto-hand and present-at-hand. Dasein is the mode of being that is associated with human beings who have an ability to care about their world. Ready-to-hand refers to things that are useful to Dasein (Blattner, 2006). For a construction worker, their boots may be ready-to-hand in that they enable them to work safely in a construction environment. Often, ready-to-hand objects are transparent to us, we do not notice them and take them for granted. However, ready-tohand objects can also become unready-to-hand. If the boots become significantly damaged, they would no longer be able to be boots in terms of fulfilling their function of protecting the workers’ feet in their work environment. Present-at-hand is the mode of being where we consider objects in their decontextualised, atomistic and purely scientific way. To again use a construction worker’s boots as an example, if we examine the object through a present-at-hand lens we would take a physical measurement 104

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of the length, describe its colour and even measure its weight. However, this mode of being excludes the context of what this object is for and the environment in which it fulfils its purpose.

Being-in-the-world and equipmental totalities Another central concept in Heidegger’s Being and Time is ‘being-in-the-world’. This concept highlights that Dasein and objects’ beingness is contextual. Heidegger argues that a human’s beingness is infused with their environment (Schatzki, 2005; Blattner, 2006). It is not possible to detach ourselves from our environment to see phenomena ‘objectively’. In terms of project managing, van der Hoorn and Whitty (2015), highlight that ‘[t]o increase our understanding of the ‘lived experience’ we need to recognise the inextricable coupling, and recursive feedback relationship between Dasein and [all they interact with], and seek to reveal rather than ignore the criticality of this relationship and interrelatedness.’ According to Heidegger, we use ready-to-hand equipment (from here we will call them in-order-tos) to achieve what is important to us (Dreyfus, 1991; Haugeland, 2013). These inorder-tos are not just single physical objects in isolation; they are the contextualised ‘stuff’, the component parts, that create the various ‘equipmental totalities’ (or worlds) in which we exist. We may have our work equipmental totality, and our home-life equipmental totality. A car that we can drive between places may be an example of an ‘in-order-to’ that is part of both our home and work equipmental totalities. Our car is ‘in-order-to’ get from one place to another. This concept of in-order-tos and equipmental totalities is critical in the continental perspective of project work. Figure 6.2 is a simplistic representation of an equipmental totality with its

Figure 6.2  A simple equipmental totality with its in-order-tos

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in-order-tos. It highlights that each organisation is a group of Dasein, with various in-order-tos making up an equipmental totality that enables the organisation to have an overall capability or set of capabilities.

The continental perspective of project work Bronte van der Hoorn and Whitty (2015), based on the concepts in Being and Time, provide an alternative conception of what project work is. They propose that: 1 2

3

An organisation is an equipmental totality composed of various in-order-tos. At some point the equipmental totality (organisation) becomes, or is expected to become unready-to-hand. This may mean that a single in-order-to has become broken or needs changing, or there may be a more widespread issue impacting multiple in-order-tos. If this occurs, and the equipmental totality (organisation) does not have the ability within it to restore or change the required in-order-tos, the experience of project work commences.

To put this perhaps another way, project work occurs where some aspect (and in-order-to) of the organisation (equipmental totality) is broken or requires change, and the organisation does not have the inherent ability to make this repair or change. We note that van der Hoorn and Whitty (2016) highlight that this inherent ability to restore the equipmental totality is not binary. This concept is grounded in Dawkins’ (2004;2011) discussion of discontinuous and continuous thinking. Dawkins highlights the problematic nature of categorisation (discontinuous thinking) and that categorisation of values into groups can falsely imply similarities and difference that do not exist in reality. For project work, van der Hoorn and Whitty (2016) note that this inherent ability to restore or change the equipmental totality is not a binary. Rather than the situation being ‘able or not able’ to restore or change, it is instead like being ‘more or less able’ to restore or change. This means that there is not a discrete point at which the inherent ability to restore or change becomes project work rather than operational work, but rather work is on a spectrum of being more or less ‘projecty’, relative to the ability of the organisation to restore in-order-tos or make changes to in-order-tos within the equipmental totality (see Figure 6.3).

Figure 6.3  The projectyness spectrum (adapted from: van der Hoorn and Whitty (2016))

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The SyLLK model In the previous section, we identified that project work occurs when an organisation cannot inherently adapt their equipmental totality to achieve some required change or restoration to their capability. The Systemic Lessons Learned Knowledge or SyLLK model is a tool that enables us to identify and visualise the features of the organisation that will either facilitate or hinder the repair or change to the required in-order-tos, which all together facilitate organisational capability (van der Hoorn et al., 2016). To accompany our discussion of the SyLLK model, in Table 6.1 a glossary of terms relating to the SyLLK model are provided.

A systemic view of an organisation The tool takes a systemic view of the organisation in that it considers the organisation as a set of systems. According to the SyLLK model there are six systems in an organisation. They are: learning, culture, social, technology, process and infrastructure (Duffield and Whitty, 2015; see Figure 6.4). Any ‘in-order-to’ in an organisation (equipmental totality) is a fusion of these systems. An organisation’s SyLLK is analogous to a systemic view of the human body. The systems in the human body include the respiratory, circulatory, digestive, nervous, endocrine, etc. For the human body to perform in a particular way, it needs each of these systems to interact in a specific way. If there is damage to, or an encumbrance on any of these systems, then the ability for the human to perform in a particular way may be diminished. It is important to highlight that there is no ‘flow’ in the SyLLK model. That is to say that nothing is moving through the holes or circles in the SyLLk model diagram (see Figure 6.4). Rather, the circles or holes in the SyLLK model represent the various features of each system which, when coupled or fused, form an in-order-to. Figure 6.4 is an illustration of how in-order-to 1 is formed from the coupling of various features across the six systems. It also illustrates how in-order-to 2 is a fusion of other features across the six systems.

Table 6.1  SyLLK model glossary of terms Term

Description

System

A group of similar features in the SyLLK model. The six SyLLK systems are: learning, culture, social, technology, process and infrastructure. The organisation being examined. It is all the in-order-tos required to deliver the capability. The means towards the ends to deliver the products and/or services. An expression of a capability that can be perceived or experienced through our senses. Qualities require certain features to be present across many in-order-tos. A fusion of features from across the SyLLK systems that deliver a component of a broader capability. An attribute of one of the SyLLK systems. It may either hinder or facilitate the in-order-to. A feature that enables or supports the in-order-to. A feature that constrains or hinders the in-order-to.

Equipmental totality Capability Quality

In-order-to Feature Facilitator Barrier

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Figure 6.4  The systems of the SyLLK model (adapted from: Duffield and Whitty (2015))

A conceptual reversal of Reason’s Swiss cheese model The SyLLK model is a conceptual ‘reversal’ of James Reason’s Swiss cheese model (Duffield and Whitty, 2015; Duffield, 2016). James Reason’s Swiss cheese model is a conceptual safety and accident-prevention tool (Reason, 2000). Organisations using the Swiss cheese model examine accidents or incidents that have occurred and put in place ‘defence layers’ to prevent the accident or incident occurring again (Duffield, 2016). These defence layers are preventative features distributed across the various systems in an organisation. In the Swiss cheese model, the holes represent a fallibility brought about by human or non-human error. Therefore, the likelihood of a repeat of the same instance is diminished because if one defence layer fails there are several other defence layers that would prevent the accident or incident occurring again in the same way. In the SyLLK model, rather than trying to prevent an accident or safety incident from occurring, we are seeking to ensure an in-order-to is activated or continues to be activated. As such, it is necessary to ensure that all the features across the organisation’s six systems (learning, culture, social, technology, process and infrastructure) are aligned in their operation to achieve the required behaviour of the in-order-to. If any one of these systems is a barrier or hindrance to the in-order-to functioning, the organisations capability is impacted. To demonstrate an application of the SyLLK model, we will first take a simple example of a bakery producing a loaf of bread, so that the principles are made clear, and then we will use a more relevant IPD setting. If we want to have the capability to bake a loaf we need more than just experienced bakers (a feature of the learning system). A baker without an oven or mixing equipment or ingredients (features of the technology system), or a temperature-controlled workspace (a feature of the infrastructure system) will be hindered in their ability to bake a loaf of bread. Furthermore, there will need to be features in the social system such as allocation of tasks to different staff, and an interest or passion for baking (a feature of the culture system) 108

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for the capability to be actuated. For the purpose of this example we have selected just a few features across the various six systems which are required to facilitate the capability to bake a loaf of bread. However, what is important is that we have highlighted that the capability to bake a loaf of bread is distributed across the six SyLLK systems. A deficiency or hindrance in any of these six systems will impact on the bakery’s capability.

The six SyLLK systems Before progressing further, we will examine what types of features are included in each of the six SyLLK systems. Table 6.2 lists the six SyLLK systems and cue words when considering the type of organisational features that belong in each system. In the following section of this chapter we will highlight examples of the features in each system to achieve the capability of IPD for an organisation.

The hierarchical nature of capability and in-order-tos It is important that we highlight the hierarchical nature of capability and in-order-tos. We will use the example of a firm engaging in a highly complicated or complex project in which a high-tech special-purpose laboratory facility is to be built, safely, and on budget. An IPD approach is being adopted, requiring a variety of collaborative activities to be undertaken. These activities or in-order-tos include: engaging with the specialised laboratory equipment manufacturer to collaboratively design the property with experts in the field of laboratory design; the in-order-to to work with others in developing a realistic and sustainable estimate of the construction costs; the in-order-to to procure goods and services that help the laboratory owner achieve their time-to-market for their products etc. Now, within each of these in-order-tos there are further sub-levels of in-order-tos. For example, the capability to procure goods and services would include: the ‘in-order-to’ to maintain and support a software system for managing purchases; testing installation equipment as well as understand complex approval requirements and standards and a host of other specialised knowledge and expertise; and the ‘in-order-to’ to execute tendering collaborative IPD processes within a highly time restrictive window of opportunity that warranted the use of an IPD approach rather than conventional traditional fragmented and sequential brief-designbid-build approaches. Table 6.2  SyLLK systems and their cue words System

Cue words

Learning Culture

Skills, Experience, Mastery, Insight, Craftsmanship, Judgements, Understanding. Focus, Intention, Ritual, What is important, Values, Priorities, Policy, Games, Beliefs, Theories, Folklore, Customs, Symbols. Language (verbal and non-verbal), Roles, Formal and Informal Ways people interact, Humour, Events, Stories, Division of labour, Signs. Tools, Devices, Aids, Materials that have form or can be shaped, Artefacts that provide a practical function (exerts a shaping force). Order, Sequence of steps, Task dependencies, Temporality focus (timing), Method, Flow of information, Rule-set about creating/crafting form or shape. Spaces, Buildings, Utilities, Physical Environment, Spatiality focus, How the environment directs people’s movements and what they think about.

Social Technology Process Infrastructure

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Figure 6.5  The hierarchical nature of in-order-tos, each with their own capability

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There are various levels of detail when we are discussing capability. When using the SyLLK model it is recommended that we use the level of detail that is useful for our purpose. Unless we are a very small organisation, it is unrealistic to create a SyLLK model for the entire organisation that incorporates all levels of in-order-tos.

The sensory quality of capabilities Capabilities have qualities that can be experienced by us. Qualities refer to an expression of the capability that we perceive or experience through our senses. In our bakery example it might be an implicit assumption that the bread produced is tasty. If we are a construction firm developing a sophisticated high-tech laboratory for a client in an environment where it is vital for the client to beat its competition in a time-to-market sense, there may be an overarching quality of ‘working safely’. The rationale for this may be to ensure that the workforce experiences no accidents or critical incidents that may consequently harm them or reflect badly on the whole project team including the project owner, and to ensure that no safety issues impede delivery of the project. These qualities will require certain features in the systems to be present across the many in-order-tos in the organisation (refer Figure 6.6). In our construction example with the quality of ‘working safely’ we may have documentation that reports on near misses as being a feature in many in-order-tos across the equipmental totality. When a feature is present across many in-order-tos it is likely that it is contributing to a quality that we associate with the capability.

Integrating the SyLLK of different organisations When we are considering a collaborative environment such as IPD, it is necessary to acknowledge that the six systems of different organisations will have points of interaction (see Figure 6.7). For example, Organisation Alpha’s information sharing in-order-to may or may not systemically align with Organisation Beta’s information sharing in-order-to. This could be particularly relevant with knowing what certifications, permits and other tests and evidence may be required for highly specialised laboratory fit-out works. As such, for capabilities to be actuated within an IPD environment it may be necessary to consider how multiple organisations’ systems (when considered collectively) facilitate or hinder the IPD capability. We note here that the ability to temporarily couple and uncouple an individual organisation’s systems to enable IPD is an in-order-to in its own right. In fact, it may explain why particular

Figure 6.6  The features required for qualities are often present across many in-order-tos

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Figure 6.7  Intersecting SyLLK systems

organisations choose to continue working with the same group of organisations project after project. We could say that they have established that their systems can merge to derive good outcomes for all involved.

Using the SyLLK model for IPD The SyLLK model can be applied to IPD in various ways. Firstly, the SyLLK model can assist to identify and visualise the facilitators and barriers for an individual organisation to have the capability to perform integrated project delivery (as opposed to traditional project delivery practices). If an organisation is embarking on project work and wants to adopt an IPD approach, it is likely that they will need to review whether their organisational systems align with the in-order-tos 112

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(capabilities) required in IPD. Qualities of IPD such as collective trust may not be inherently wired across an organisation’s six systems. It is necessary to identify what is required to facilitate IPD across an organisation’s systems and to ensure that there are no the hindrances to this IPD quality, or at least to minimise them. Furthermore, there may be a specific in-order-to within IPD such as developing, maintaining and sharing building plans and documentation that will require various facilitators from across the six SyLLK systems. We will discuss the facilitators for both these examples in the following section. Secondly, the SyLLK model can assist an organisation to audit its systems to achieve a specific project’s set of deliverables. Irrespective of the delivery approach, as introduced in the previous section, we experience work as projecty, because we do not have the inherently ability to undertake the activity. As such, the SyLLK model is useful to identify what will be required in each organisational system to achieve the project deliverables, then to audit the organisations existing features against this model. Gaps in required features can then be identified and remediated and barriers or hindrances to achieving the deliverables mitigated or removed. Finally, and this is a combination of the first and second use in a broader context, if a conglomerate of organisations embark on the IPD initiative, the SyLLK model can be utilised to ensure that the systems across the conglomerate organisations are aligned to achieve the IPD approach and the project deliverables. As introduced previously, when organisations are working together, a hindering feature in one organisation’s system can have an impact on the operation of the overall conglomerate’s capability. In IPD, we are required to merge individual organisations’ systems (Figure 6.7) to enable the IPD in-order-tos.

Using the SyLLK model to examine IPD We will now examine both an IPD quality and an IPD in-order-to through the SyLLK model. Our aim is to demonstrate why a systemic view of capability is useful in enabling organisations to engage the capability of IPD. In our first demonstration we will identify and discuss the facilitators required for the quality of collective trust. In our second example we identify and discuss the features required for the in-order-to of developing, maintaining and sharing building plans and documentation. The identified facilitators for the quality and the in-orderto example have been drawn from three IPD case studies. The three case studies are Autodesk Inc., Cathedral Hill Hospital and Edith Green Wendell Wyatt Federal Building. The full narratives of each of these cases are detailed in the School of Architecture University of Minnesota (2012) compilation of IPD case studies. A form of thematic analysis (see Gibbs, 2007; Ayres, 2008) was used to elicit the facilitators in our two demonstrations of the use of the SyLLK model. The authors examined each of the three case study’s narratives for features of the six SyLLK elements that were described as facilitating IPD capability. Following this initial classification of sections of the narrative to each SyLLK system, a second classification grouped the narratives with similar themes together. These secondary classifications are the identified facilitators in our examples. The analysis revealed that there are multiple ways to facilitate the capability of IPD. Across the three case studies there were some differences in their ways of working. In SyLLK terms this means there is not a fixed set of facilitators required for the quality of collective trust, or the inorder-to of developing, maintaining and sharing building plans and documentation. However, there is a family resemblance in the facilitators that will be present. This means that whilst an organisation successfully undertaking IPD may not have all the facilitators we discuss in our examples, many of these facilitators or similar ones are likely to be present. 113

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Example 1: Features required for the IPD quality of collective trust To recall, in SyLLK terms a quality is an expression of the capability that we can perceive or experience through our senses. It is something we experience that is present across many inorder-tos in an equipmental totality. It is broadly recognised that key principles of IPD include the alignment of the interests of all parties, equality amongst parties, collaboration, respect, and transparency (Kent and BecerikGerber, 2010; School of Architecture University of Minnesota, 2012; Fischer et al., 2017). In examining the experiences described in three cases we would argue that these principles manifest themselves in a form of collective trust across the project parties. For more detail on the concept of trust and the IPD perspective of trust and commitment readers are referred to Chapter 13 of this book. The words of Hume (1740, sec. 3.2.5) capture this collective trust experience: when each individual perceives the same sense of interest in all his fellows, he immediately performs his part of any contract, as being assured, that they will not be wanting in theirs. All of them, by concert, enter into a scheme of actions, calculated for common benefit, and agree to be true to their word; nor is there anything requisite to form this concert or convention, but that everyone have a sense of interest in the faithful fulfilling of engagements, and express that sense to other members of the society. Through the SyLLK model it is possible to see that achieving this quality of collective trust requires the coupling of many features across the organisational systems. The IPD parties require more than simply a belief that collaboration, transparency or respect is important as has been explained in Chapter 2 of this book through the Collaborative Framework. They will require features across all the organisational systems (learning, culture, social, technology, process and infrastructure) to create this experience of collective trust which is such a defining quality of IPD. In Table 6.3 the facilitators in each SyLLK system associated with the quality of collective trust are listed. We will now examine why it is the coupling of these facilitators that actually awakens the quality of collective trust (reference to C1, S1 and so on refer to items in Table 6.3). In the culture system, priority is given to respecting all team members (C1) and focusing on win–win (C4). However, this valuing or belief alone will not provide an experience of collective trust. This belief becomes awakened when teams are structured to allow autonomy (S1) and experts are structured to work together to solve problems (S3). However, even these cultural and social facilitators alone do not guarantee an environment of collective trust. Trust requires our exposure to being vulnerable and having a dependence on others for our fate (Kramer and Tyler, 1996) as is explained and expanded in the discussion in Chapter 13 and in particular is illustrated in Figure 13.1, so we want to know that those we are exposing ourselves to have high degrees of experience and can be trusted to provide informed recommendations. This aligns with facilitator L1 (domain experience and knowledge). We also see that decision-making processes need to reflect the valuing of experts’ opinions through making decisions in a democratic way (P2). The experience of collective trust would be diminished if decisions were made by a single person without regard to the opinion of experts. It would be saying something very different to our professed values of respect (C1) and win–win (C4). Technology facilitators such as building information modelling (T1) and system integration and interoperability (T4) also contribute to the quality collective trust. These technologies make information visible and therefore increase feelings of inclusion in the project experience and therefore willingness to be vulnerable. Finally, co-location of the project team (I1) and spaces that encourage face-to-face engagement (I4) contribute to the conditions for realising collective trust. This works as the majority of interactions 114

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include both the verbal and non-verbal communication signals as the interactions are in-person. Problems can be more quickly addressed through quick and informal conversations and when misunderstandings occur these are more quickly identified and resolved. To further explain, a facilitator in the learning system is IPD experience and knowledge (L3). We can structure people in teams to work together (S3) but if they don’t have experience or knowledge of how to work in this way the structure will be ineffective. This drives the need for people to have skills or experience in coaching and mentoring (L5) to enable those who are new to IPD to be orientated into IPD ways of working. To return to the structure of different disciplines working together (S3), for this desire for collaboration to be optimally effective it is necessary for project team members to be as involved as early as possible in the project life-cycle (P3). If there is not early and consistent involvement (P6) the required shared understandings between the team members becomes hindered. Whilst we have not discussed the coupling of every facilitator identified in Table 6.3, we have explained that the facilitators do not achieve collective trust in isolation. Rather, the facilitators achieve collective trust because of their coupling. There will be IPD cases where some of these facilitators are not present. However, we propose that the greater the number of facilitators in Table 6.3 (or appropriate substitutes) the greater likelihood that the quality of collective trust is achieved. To summarise, to achieve this quality of collective trust the facilitators across various organisational systems (see Table 6.3) will need to be aligned to derive the emergent quality we experience as collective trust.

Example 2: Features required for the in-order-to of developing, maintaining and sharing building plans and documentation Building information modelling (BIM) is strongly associated with IPD (Azhar, 2011; Bryde et al., 2013). It is easy to think of BIM capability as simply setting up AutoCAD software. However, if we employ the SyLLK lens we would identify ‘developing, maintaining and sharing building plans and documentation’ as an in-order-to in the IPD equipmental totality and identify developing, maintaining, and sharing building plans and documentation is the purpose of BIM. With this more systemic and holistic view we recognise that this in-order-to is actually a nexus of the six SyLLK systems. It includes the AutoCAD software but the in-order-to of developing, maintaining, and sharing building plans and documentation requires the coupling of several other facilitators from across the six SyLLK systems as illustrated in Table 6.4. From Table 6.4 it is evident that in addition to the technology facilitators for the in-order-to such as the software (T1), remote access to the software (T3), interoperability of systems (T4) and hardware (T5), other facilitators across the other systems need to be enabled. Team members are required who have experience and skills using the BIM software in an IPD environment (L1 and L3). Similarly, the desired benefits of BIM, such as building a shared understanding and assisting in preventing and solving problems, are achieved as the project team places value on open communication (C5) and the worth of diverse perspectives (C1). A sole architect could use BIM but it is in opening the system to the broader team that the benefits are derived. Again, the need for an in-order-to that is focussed on sharing building plans and documentation is coupled to an expectation that teams will work together (S3) and there will be transparency and easy access to information (S4). For the effective operation of the developing, maintaining, and sharing building plans and documentation in-order-to, the discussed facilitators also need to be coupled to enabling processes. 115

Social S1: Team structures embed autonomy. S2: Contracts have shared risk– reward structure that incentivises building agreement. S3: Experts from different disciplines work together with the owner to plan and resolve problems. S4: Information is presented clearly and made easily accessible.

Culture

C1: Valuing and respecting the contribution of all teams. C2: Belief in selfselection and accountability. C3: Belief in the value of IPD. C4: Focusing on win–win. C5: Belief in open communication. C6: Prioritising building productive relationships.

Learning

L1: Domain experience and knowledge L2: Supplier and market experience and knowledge L3: IPD experience and knowledge L4: Problemsolving skills L5: Coaching and mentoring experience and skills

T1: Building Information Modelling Software. T2 Managerial tools. T3: Remote access to information. T4: Computer system integration and operability. T5: Computer servers and hardware.

Technology

Table 6.3  Facilitators in SyLLK systems to achieve the quality of collective trust

P1: Project processes include continuous improvement. P2: Project processes allow for democratic decision-making. P3: Project processes invoke involvement of as many parties as possible as early as possible. P4: Project processes favour a detailed design stage prior to commencing construction. P5: Project processes for ongoing monitoring and review. P6: Project processes favour high degree of ongoing engagement of relevant team members. P7: Project processes are responsive and flexible. P8: Processes are established for use of BIM and management of documentation.

Process

I1: Co-location of team. I2: Internet connectivity. I3: On-site office facilities. I4: Spaces that encourage face-to-face engagement. I5: Spaces that enable the display of visuals. I6: Virtual spaces.

Infrastructure

Culture

Social

L1: Domain C1: Valuing and S3: Experts from different experience and respecting the disciplines work together knowledge contribution of with the owner to plan L3: IPD experience all teams. and resolve problems. and knowledge C5: Belief in open S4: Information is presented communication. clearly and made easily accessible.

Learning

Process

Infrastructure

T1: Building Information P5: Project processes for ongoing I2: Internet Modelling Software. monitoring and review. connectivity. T3: Remote access to P6: Project processes favour I5: Spaces that information. high degree of ongoing enable the T4: Computer system engagement of relevant team display of visuals. integration and operability. members. I6: Virtual spaces. T5: Computer servers and P8: Processes are established for hardware. use of BIM and management of documentation.

Technology

Table 6.4  Facilitators for the in-order-to of developing, maintaining, and sharing building plans and documentation

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There needs to be processes around how the software is to be used for designing, maintaining, and sharing plans and documentation (P8). The software will also need to be coupled and aligned with the project monitoring and review (P5) and engagement processes (P6). For example, if the BIM cannot be updated in real time this would impact on the ability for timely monitoring and also the resolving of problems. Infrastructure facilitators will also be important in designing, maintaining, and sharing plans and documentation. Team members will need internet connectivity (I2) to enable access to the information in the system. The in-order-to is also likely to be more effective if there are spaces where the plans and documentation can be shared in a hardcopy form in workspaces (I5). Finally, we recognise that the BIM creates a virtual version (I6) of the project deliverable and this creates a virtual infrastructure or environment in which planning and problem-solving becomes easier. In this example of the SyLLK for the designing, maintaining, and sharing building plans and documentation in-order-to we have again demonstrated the value in systemic thinking when considering what is required to be successful in IPD. It would be easy to assume that having BIM software configured would be the key facilitator, but by employing the SyLLK model we highlight that this must be coupled with facilitators across the other organisational systems for the designing, maintaining, and sharing of building plans and documentation to be efficiently realised. A deficiency in any of the facilitators will hinder the in-order-to and likely negatively impact the overall capability of IPD. The astute reader will have noticed that the facilitators for our second example are also present in our first example of the SyLLK for the quality of collective trust. This is an important point to notice. Across an equipmental totality’s in-order-tos there will be many shared facilitators. For example, domain experience and knowledge (L1) is likely to be critical to nearly all in-order-tos for IPD and is also foundational to the achieving the experience of collective trust amongst the project participants.

Conclusion In this chapter we have demonstrated how thinking systemically about organisations through the use of the SyLLK model can be valuable in identifying what is required to facilitate IPD capability. We commenced by providing an overview of key terms in systems and systems thinking. We then introduced the continental perspective of project managing that established the concept of organisations as equipmental totalities with in-order-tos and that projectyness is the experience brought about by having our inherent capabilities stretched. Grounded in our knowledge of complex adaptive systems and systemic thinking, we then introduced the SyLLK model as a conceptual tool that could assist us in understanding an organisation’s capabilities in a systemic way. By using the SyLLK model we see each in-order-to in an organisation as the nexus of the six SyLLK systems (learning, culture, social, technology, process and infrastructure). Within each of these systems there are features. If an in-order-to is to function successfully, the required features across all the organisational systems need to be present and coupled. An absence of a required feature in any of these systems will hinder the in-order-to. We also discussed the topic of ‘qualities of capabilities’ and how these qualities also require facilitators across the in-order-tos. We demonstrated the value of this systemic view in two IPD examples. Firstly, we discussed the facilitators required to realise the quality of collective trust, which is central to IPD. We then examined the in-order-to of designing, maintaining, and sharing building plans and documentation. Again, we showed that facilitators from across all six organisational systems are required to enable this in-order-to. 118

Thinking systemically to mobilise IPD capability

To conclude, we return to the continental perspective of project work. If you are an organisation that wants to participate in IPD, then your organisational (SyLLK) systems will need to be configured in such a way as to enable that. If not, then the experience of IPD, for you and others, will be projecty. If an organisation wants to be IPD-compatible or capable they will need to audit the features across all their organisational systems (learning, culture, social, technology, process and infrastructure) to ensure that the required facilitators are present, and any hindering features are removed. In this chapter we have presented some of the key facilitators required for the IPD capability as a start to this audit process. However, of greater importance and broader impact is the demonstration of how the SyLLK model enables us to realise that any organisational capability would rarely be enabled through ‘switching on’ or ‘plugging in’ a single feature (e.g. software or a new process) in an organisation. Instead we must recognise that organisational capability is realised through a network or nexus of coupled features. All those involved in project work can benefit from this systemic view. If we can think across all organisational systems, and recognise their coupling when planning and solving problems in our project work, we will have a greater likelihood of achieving our project deliverables.

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Thinking systemically to mobilise IPD capability van der Hoorn, B. and Whitty, S. (2015). “A Heideggerian paradigm for project management: breaking free of the disciplinary matrix and its Cartesian ontology.” International Journal of Project Management. 33 (4): 721–34. van der Hoorn, B. and Whitty, S. (2016). “Projectyness: a spectrum of greater or lesser capability.” International Journal of Project Management. 34 (6): 970–982. Whitty, S. (2008). ‘C’ for craftsmanship not ‘C’ for complexity. PMI 2008: PMI Global Congress Asia Pacific, Sydney, 3–5 March. Whitty, S. and Maylor, H. (2009). “And then came complex project management (revised).” International Journal of Project Management. 27 (3): 304–310. Winter, M., Smith, C., Morris, P. and Cicmil, S. (2006). “Directions for future research in project management: the main findings of a UK government-funded research network.” International Journal of Project Management. 24 (8): 638–649.

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7 WHERE IS IPD COMING FROM AND WHERE IS IT GOING TO? Leins Wang and Steve Rowlinson

Introduction China is developing rapidly, with a booming economy, an ageing workforce and a growing and demanding middle class. There is still much demand for social housing in China with its massive population and the relaxation of the one-child policy. The current Five Year Plan calls for the construction of 14 million apartments throughout the nation. This plan is to be partially implemented by adopting a modular, prefabricated construction approach. In order to do this, a number of large factories have been set up in many of China’s provinces to meet this demand. These factories are high-tech, making use of production methods that demand a digitised approach to the whole process of design, construction, erection, commissioning and energy management in use. This chapter looks at the mechanisms and processes needed to develop such a factory. We use a case study of a factory in Shaoxing, Zhejiang Province and we look at the logistical and digitisation issues facing the development of such a factory. In order to do this, there is a need to look at the development of the industry in China and to assess the capacity of the current industry to deliver this vast number of housing units. Thus we start with an introduction to the housing market and economy and then look at the particular production facility in detail. The design process for the modular units is discussed as well as the nature of the factory and the projects to be completed. The key issues in this are logistics and digitisation and these are dealt with towards the end of the chapter. This question posed in the chapter title could be asked of many approaches to project delivery and in the construction industry: the methods of design and construction, the technologies and materials within the building or structure. Our roles are changing rapidly and are connected, often by the Internet of Things (IoT). We have entered an era of digitisation of both the products that we use and the processes that we follow to make them. We have a whole range of different organisations and individuals commissioning projects, be they a new build or refurbishment. The clients of the industry are becoming more sophisticated and more demanding. This begs the question: how is the industry responding to this and how will the industry reshape itself to address these issues? A new era of prefabrication and modularisation is upon us. This has been driven by the weak performance of the old construction industry and also by the need for governments and 122

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major clients to build rapidly, efficiently and effectively. China is an excellent example of this. The current five-year plan calls for 14 million apartments to be provided and that over 30% of these should be constructed using modular construction techniques that take place in a factory setting. Thus, logistics is the key concept in such a program. The design, manufacture, delivery, erection, fitting out and commissioning are all part of the logistics process. This process, although involving physical attributes such as trucks for delivery and machines in the factory, is in many ways already digitised. China is making use of robotics and computer numerical control machines (CNMM) technology in its factories and the whole process is monitored and controlled by a common data environment (CDE) in a cloud. The move to take people away from on-site construction is a necessity with an ageing workforce and with an accident record in the industry that, to be quite frank, is woeful. Given these substantial and significant changes to the way we see the construction process and product changing it is inevitable that we must plan and develop change agents. Given the sheer volume of construction required in the five-year plan, the question we pose is how can this industrialisation take place? What are the new paradigm and process changes that are needed to achieve this? Thus, in this chapter we look at the mechanisms for analysing and designing organisations and the functioning in the new world in which we are moving. Organisational, social, project, individual and cognitive issues all need to be addressed before we can redesign the building process and the organisations that take part in the process.

China and modular construction China is developing rapidly, with a booming economy, an ageing workforce and a growing and demanding middle class. There is still huge demand for social housing in China with its massive population and the relaxation of the one-child policy. Thus, China has developed a five-year plan to build 14 million apartments throughout the nation. This plan demands a paradigm shift in the approach to construction management. Much of the work that takes place on site is the erection and assembly of the ‘parts’ that make up the building. This is akin to building a Lego house where all of the components must be an exact match to the specification so that they fit together seamlessly. This is a very different approach to the traditional cast in situ construction and requires intensive planning and quality control. In order to achieve this the processes of Initial Design, Detailed Design, Procurement of materials, Manufacturing of components, Transportation to site, Erection of the components and Facilities Management of the constructed accommodation have to be tightly controlled and integrated. In order to achieve this a cloud-based inventory system is required to track progress of all components in real time. Such an approach should lead to more efficient and effective production of the accommodation, elimination of much of the rework that takes place on traditionally organized construction sites and higher quality of the finished product. For the workforce it will mean a reduced on-site work force and improved health and safety due to the controlled environment and elimination of many manual tasks. We explore the use of prefabrication, modular construction, volumetric production and the range of off-site manufacturing systems that are now available and being developed worldwide. This chapter specifically asks: where do Design for Manufacture and Assembly (DfMA) and Modular Integrated Construction (MiC) fit into integrated project delivery? This objective is addressed through the discussion of this case study of a 200,000 m² modular construction factory. Specifically, we address the ways in which the manufacturing and information management systems were set up. This is followed by a discussion of the need for process and information management and the 123

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individual role changes that are needed within the organisation in order to achieve effective and efficient production and construction and successful marketing of the products. Specific focus is placed on the role of the manager of the factory and the need for knowledge of logistics as well as project management for the venture to be successful. In order to put the case study in context, the chapter starts with a market analysis and the drivers for the markets and the segmentation of the markets. A major section deals with the digitisation of the whole process that is the fundamental underpinning of the logistics. The chapter concludes with a critical review of the factors that lead to success in a venture such as this.

Market analysis Modular construction industry in China Modular construction is not a new concept; after the Second World War, due to the shortage of labour resources, most European countries began the industrialisation of construction and Europe was the birthplace of modular construction. In the 1970s, the North American market also started to implement modular construction and off-site production; the relevant standard specifications have been used ever since. In the 1990s, Japan adopted modular construction methods for the production and construction of parts for all forms of residential buildings. Legislation was enacted to guarantee the quality of the prefabricated components. The application of modular construction in Hong Kong and Taiwan has also been popularised and adopted but with limited success given the small size of these markets (Jiang, 2010). In the 1970s, Mainland China (hereinafter referred to as China) adopted modular construction with multi-hole concrete slabs. By the end of the 1980s there were tens of thousands of precast concrete component factories in the country, with an annual output of more than 25 million cubic metres. However, during the Tangshan earthquake of 1976, many prefabricated houses were seriously damaged, which caused nationwide concern about the structural performance of prefabricated systems. In addition, there were performance problems in prefabricated multi-hole-slab building, such as leakage of wall joints and poor sound insulation. Eventually, this construction method was replaced by the rapidly emerging cast-in-place concrete system. China has changed dramatically in the past two decades, experiencing rapid economic growth and a steady increase in national income. The construction industry has also created a large number of employment opportunities while supporting GDP growth. According to statistics in the fourth quarter of 2017, there were more than 55.37 million workers in the construction industry, and the industry’s output value reached 21.39 trillion (National Bureau of Statistics of China, 2018). As the economy grows, living standards improve, the number of project-site working labour is decreasing and ageing; there is a research data of the percentage of the construction workers in different age, shown in Table 7.1. China’s demographic youthfulness is expected to completely disappear around 2035. The rural surplus labour has gradually decreased. China’s construction industry is inevitably impacted since it is labour intensive with low productivity. The difficulty of employment and high costs will become an irreversible trend. The inefficient and extensive economic pattern will be eliminated (Fan and Julien, 2017). Currently, the salary of the site workers is increasing year by year due to the shortage of working labour; the average yearly income of Chinese construction labour is shown in Table 7.2. Meanwhile, well-reported environmental problems caused by rapid economic growth are also apparent in China at the moment. Air quality has become a very hot topic for the whole society. 124

Where is IPD coming from and where is it going to? Table 7.1  China’s ageing workforce (adapted from: National Bureau of Statistics of China, www.stats.gov. cn/tjsj/zxfb/201804/t20180427_1596389.html accessed 13/2/2019) Age

2012

2013

2014

2015

2016

18–20

4.9%

4.7%

3.5%

3.7%

3.3%

21–30 31–40 41–50 50–

31.9% 22.5% 25.6% 15.1%

30.8% 22.9% 26.4% 15.2%

30.2% 22.8% 26.4% 17.1%

29.2% 22.3% 26.9% 17.9%

28.5% 22% 27% 19.2%

Comment A marked shift in workforce age from under 40s to older workers. This signals potential problems comparable with Hong Kong, for example (Rowlinson, 2018).

The dust, noise, construction waste and other pollution generated by the traditional construction methods epitomised by on-site concrete pouring has become increasingly serious because of the increase in the volume of buildings being built (Wang and Zhao, 2016). According to research by the Chinese Academy of Science, 2.4 billion tons of construction waste is produced annually; that is 40% of the overall waste volume. Dust is also a major air-quality issue. The capital, Beijing, is a typical example of China’s dust-polluted cities and the source of the PM2.5 pollution is shown in Table 7.3. Many developed countries encountered similar problems in their development process. Modular construction has been touted as an effective way to solve such traditional construction problems because of the short construction period, reduction of on-site labour and the potential to achieve low levels of pollution. Internal and external factors are pushing the transformation and upgrading of traditional buildings in China. The State Council and the Ministry of Housing and Urban-Rural Development (MHURD) have issued relevant policies and commands continuously and frequently since 2016, advocating the application of modular construction. Details of these are listed in Table 7.4.

Table 7.2  Chinese average yearly income of construction labour (adapted from: National Bureau of Statistics of China, www.stats.gov.cn/tjsj/zxfb/201505/t20150527_1110630.html, www.stats. gov.cn/tjsj/zxfb/201605/t20160513_1356091.html, www.stats.gov.cn/tjsj/zxfb/201705/ t20170527_1498372.html, accessed 2/13/19). Year

Private sector RMB/year

State-owned company RMB/year

Comments – (note RMB = renminbi, which may also be used for the Chinese yuan)

2009 2010 2011 2012 2013 2014 2015 2016

19,867 22,228 26,108 30,911 34,882 38,836 41,710 44,808

24,161 27,529 32,103 36,483 42,072 45,804 48,886 52,802

Clearly the trend for income levels is rising steadily over the 2009 to 2016 period; for example the figures indicate a 226% or 25% per year increase for the private sector and 219% or 24.%5 per year increase for the state-owned company sector. While income levels may vary across China, from city to city, the trend is clear. This suggests that productivity would need to increase by 25% per year to be sustainable.

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Leins Wang and Steve Rowlinson Table 7.3  Sources of pollution in Beijing (adapted from Wang & Zhang, 2015) Source

%age

Comment

Car exhaust

42

Coal combustion

28

Industry Construction dust

13 12

Other

 5

Increased prefabrication could lead to reduced road transport and therefore reduced traffic pollution. No significant impact through prefabrication, perhaps a slight increase for demands for power; more efficient application of factory production may lead to reductions in demands for energy for factories producing these products. However, coal is also used for domestic heating and domestic power use. As above, but this relates specifically to industry, not domestic power needs. Significant reduction in concrete-related works by using advanced factory production techniques and processes. No significant impact.

Change is enacted in China through policies developed by the ministries and then implemented on the ground by both state-owned and private enterprises. It is clearly stipulated in policy that by 2020, modular construction system must be adopted in more than 15% of new buildings, and local governments such as Shanghai target up to 30%. Modular construction is not only being pushed at the state level, but also encouraged by the local province and city governments. In order to stimulate this change, preferential policies have been announced by local governments, including issues such as land supply, financial subsidies, loan subsidies, etc. (Chen and Lin, 2018). According to the policies and demands, the scale of the modular construction market will exceed an annual total of RMB 3 trillion (roughly 430 billion US dollars) within three years. Meanwhile, more than 50 modular construction demonstration cities, more than 200 modular construction industry bases, and more than 500 modular construction demonstration projects will be cultivated by 2020 in accordance with the requirements of the Ministry of Housing and Urban-Rural Development (Ministry of Housing and Urban-Rural Development, 2017). Implementation of policy in China is rapid, especially in construction. In 2015, the newly built modular construction area in China was 72.6 million square metres (m2), and the number was increased to 114 million m2, a 57% increase in 2016. In November 2017, the MHURD announced the first batch of modular construction industry bases, numbering 195, which is very close to the target of 200 in 2020. The Ministry is confident that there should be no difficulty in reaching the target of the 13th Five-Year Modular Construction Action Plan. However, due to this short and rapid development phase, the modular construction industry is still in the pilot or exploration stage, and there are still many uncertain factors. According to the research of Youcaiyun.com in 2018, resistance to the development of modular construction mainly includes: supply chain incompetence 60%, poorly drafted or weak standards 56%, demand-driven cost increases 52%, management difficulties due to inexperience 49%, weak safety procedures 15%, and other causes 3%, etc. Overlapping causes naturally mean that the total does not add up to 100%. Prefabricated structural systems are normally one of three types: prefabricated steel structures, precast concrete structures, and prefabricated timber structures. Prefabricated steel structures are normally used in high-rise buildings, industrial factory buildings and some light-steel-structured residential projects. Precast concrete structures are usually used in residential and low-level office buildings, while prefabricated timber structures are used in villas, low-level houses, and the like. For large-scale modular construction projects, two or three of these types are combined 126

Table 7.4  Policies promulgated by the State Council and MHURD since 2016

The State Council

Date of publication

Title of document

Brief

Feb 2016

Several Opinions on Further Strengthening the Management of Urban Planning and Construction Government Work Report

Strive to make assembly buildings account for 30% of new buildings in about 10 years.

Mar 2016

MHURD

Sep 2016

Guiding Opinions on Vigorously Developing Assembly Types

Jan 2017

13th Five-Year: Comprehensive Work Plan for Energy Saving and Emission Reduction

Feb 2017

State Council Executive Meeting Minutes

Feb 2017

Opinions on Promoting the Sustainable and Healthy Development of the Construction Industry Technical Review Points for the Construction Drawing Design Document of the Prefabricated Concrete Structure Technical Standards for Three Major Buildings of Prefabricated Concrete, Steel Structure and Wood Structure The 13th Five-Year Plan for Building Energy Efficiency and Green Buildings The 13th Five-Year’ Modular Construction Action Plan and its Supporting Management Methods

Dec 2016

Jan 2017

Mar 2017

Mar 2017

Apr 2017

Jul 2017

Technical Specification for Assembled Stiffened Column Hybrid Beam Frame Structure Opinions on Sustainable and Healthy Development of Construction Industry

Premier Li Keqiang stressed the importance of vigorously developing steel structures and modular construction. Promote the modular construction to the national level, and the three major urban agglomerations such as Beijing, Tianjin and Hebei are identified as key areas for promotion. Promoting energy-saving green building materials, assembly and steel structure construction. Innovate in construction industry and promote modular construction. Further development of precast concrete (PC) and prefabricated steel (PS) structures. Media release.

Be implemented on June 1, 2017.

Improving the policies, standards and technical systems related to modular construction. Clarify that before 2020 the proportion of newly built buildings should exceed 15%, and the key areas should be more than 20%. Be implemented from October 2017. Cooperate with 18 ministries and commissions to formulate and implement the key-tasks division plan, including seven major parts with 20 items.

Leins Wang and Steve Rowlinson

according to project characteristics and structure types. Regarding the statistics: up to the end of 2016, according to the MHURD, in 2016 119 national sample modular construction projects, which were awarded by the MHURD, were composed of 41 precast concrete projects, 19 prefabricated steel structures, 4 prefabricated timber structures, and 54 partially prefabricated projects. Precast concrete structures comprised 38%, partially prefabricated project structures 46%, prefabricated steel structures 16%, and prefabricated timber structures 3%. Modular construction project life-cycle management follows the pattern of design, shop drawing, procurement, manufacturing, construction, facility management and demolition. However, for many years in Chinese traditional construction, design, construction and production are generally separated. The Design Institute is responsible for the overall design of the building. The constructor is responsible for the construction according to the designed drawings. The producers are usually a subcontractor of the general contractor and the subcontractor produces objects according to the requirements of the general contractor. Thus, most of the modular construction companies have transferred their focus from the traditional business field, and so have little experience as the entire life-cycle provider. There are 195 sample modular construction industry bases that were awarded licences by the Ministry of Housing and UrbanRural Development in 2017 (MHURD, 2017). By their main business (traditional business), they can be classified as five types of companies: prefabricated element supplier 33%, property developer 6%, Design Institute 19%, contractor 40% and academic research institute 2%. As can be seen, there are a range of different companies that have taken the opportunity to move into this new business sector. As the numbers above indicate, most of the modular construction companies have transformed from traditional construction parties or (engineering, procurement, manufactory, construction) EPMC their supporting companies into specialist modular prefabrication organisations. Due to the particular management style of the traditional construction industry, all parties in the industrial chain perform projects through their own roles and perspectives, pursuing the maximisation of self-interest, neglecting others’ and finally damaging the overall interest of the project. This is far from the intended goal of efficient and effective integrated project delivery. Modular construction includes the whole process of design, procurement, production and construction of EPMC. All actions are more closely related, reliant and irreversible compared to traditional construction projects. Procurement activity can be executed only when the design is completed. After the production of the components, the on-site construction can start, so the principles of integrated project delivery are essential and would be beneficial to the modular construction project management process, from design, procurement and manufacture to construction management and, inevitably, facility management and particularly energy-efficiency monitoring. These newly formed modular construction companies can be classified as four types by the ownership: local-government-owned 14%, state-owned 8%, education 2%, and private-owned 76% (MHURD, 2017). Private companies are definitely the pioneers in the transformation from traditional construction to DfMA construction. However, compared with state-owned companies, private companies have inherent weaknesses in enterprise scale, government relationship, and largescale project undertaking capabilities. Traditional construction projects, especially large-scale and super-large-scale construction projects, are normally entrusted to state-owned enterprises. However, with the development of modular construction, many new private enterprises have emerged into the market in recent years. They have more flexible forms, and have the agility to invest continuously in innovation, research and development to strengthen competence and at the same time be fully engaged in market competition. In the development and application of modular construction technology, private companies have made significant breakthroughs 128

Where is IPD coming from and where is it going to?

in terms of the logistics of project management. Indeed, the role of the logistics manager and the information manager are crucial to the success of these enterprises. The role of the traditional construction and project managers is being challenged in the brave new world of DfMA. A number of market leaders are now well established. In the future modular construction market, the competition among private companies will be a competition around technical systems (more integrated components, more sustainable and greener materials and processes) and management abilities in terms of logistics and information management. At this early stage in China’s move into DfMA, technical systems need to be improved by continuous research, development and experiment. In this field, private companies are more willing to cooperate with universities and other scientific research institutions in production, education and research, and apply theoretical research results to practice, and strengthen their technical systems. Management ability needs to be managed vertically in the whole project life-cycle from the design, procurement, production, construction commissioning and facilities management and other, evolving processes such as information management, tracking and exchange processes. Horizontally, the project supply chain, including material suppliers and professional subcontractors, management and collaboration methods, also needs to be improved. In order to be able to perform the management of the entire process of, effectively, an EPMC project from the perspective of integrated project delivery requires different processes that can be found in the logistics industry rather than on the construction site. Besides the improvement of technical systems and management ability, investment in information management must also be strengthened. With the potential inherent in BIM technology, standardised design, precise procurement, smart manufacturing, and informed on-site management can be structured and integrated from the perspective of information. When executed properly this will improve tremendously the productivity and efficiency of an industry currently poor in terms of productivity. This is an essential component in achieving the goals of the Chinese government’s 13th five-year plan on housing production. Adopting these three perspectives is the way forward for private companies to develop niche markets in a rapidly changing and fast-growing industry.

GBS – Green Building Systems The company Green Building Systems (GBS) is a Subsidiary of Jinggong Steel Building Group (Jinggong). Jinggong is a listed company on the Shanghai Stock Exchange, it is the No.1 private company in the steel structure building field in China, with more than 7,000 employees, and the annual steel capacity reaches 650,000 tonnes. Jinggong has built landmarks both domestically and abroad, such as: •• •• •• ••

The State Olympic Stadium (Bird’s Nest) in Beijing; Guangzhou TV Tower in Guangzhou; Kingdom Tower (to be the highest building in the world, 1,007m) in Saudi Arabia; Al Rayyan Stadium (2022 FIFA World Cup) in Qatar, and many more.

Not only the steel, but also cladding, curtain walling, roof systems and new construction materials are covered by its business. Indeed these are the fundamental concepts needed in delivering integrated buildings, and Jinggong is approaching this market for IPD with enthusiasm. 129

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GBS is Jinggong’s new business unit that focuses on modular construction from engineering, procurement, manufacturing to construction and erection and commissioning. By leveraging Jinggong Steel Group’s technology and technical know-how, GBS has developed five integrated building types: school buildings, hospitals, office buildings, hotels and residential buildings. Though the business of GBS only started in 2014, it has already become one of the best modular construction companies in China. Now GBS has 250+ employees doing research and design work in the Shanghai R&D centre; 350+ employees doing manufacturing work in the factory in Shaoxing City, Zhejiang Province; and 100+ employees and workers working in project sites; and the total number will be increased up to 1,000 by the end of 2018. The well-trained workers and the professionals from different departments give GBS the capability to do EPMC projects, which it regards as the ideal way of going about modular construction.

The product As an EPMC project delivery company, GBS not only focuses on the structural objects and the joints, but also the entire building in terms of features, comfort, green characteristics and sustainable designs and components. GBS has participated in the market for several years and has achieved maturity by investing in research and design.

Research and development of the building system Fifty researchers are working in GBS Research Centre, separated into six teams: 1 Architect; 2 Structural; 3 Mechanical, electrical and plumbing (MEP); 4 Curtain wall; 5 Decoration and integration; 6 The Research Centre also collaborates with the top universities in this field such as: Tongji University, Chongqing University and Guizhou University. GBS collects ideas from the requirement of the market, through research, and develops products internally, commissioning targeted research projects with top universities and physically testing the result in the lab and in real projects. After several years of collaboration, much research output has been used in real projects and has performed to expectations. The prefabricated steel and precast concrete (PSC) Integrated Structural System is the result of collaboration between GBS and Tongji University and it has been utilised in numerous projects. The system is combined with PEC (partially encased composite), columns/beams/walls, laminated slabs, PC (precast concrete) composite curtain walling, PC stairs and light-concrete interior walls, as shown in Figure 7.1. PEC column/beam/wall is a combination of steel and concrete; the advantages of each material has been utilised to cover the disadvantages of the other. Compared with a PC structure, the reliability of the vertical structure and the anti-seismic performance have been greatly improved, and the components can be continuously prefabricated and installed without formwork. Compared with a steel structure, the performance in terms of fireproofing, sound insulation, anti-corrosion and the decorative convenience has been improved immensely. The laminated slab embeds the rebar into the first precast layer, and the second layer will be poured concrete on top, on-site, when the component is installed to endure continuity. 130

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Figure 7.1  The prefabricated steel and precast concrete (PSC) integrated structural system

The slabs can be installed continuously without formwork, and service pipes and ducts can be installed as prefabricated units allowing flexibility in site installation and saving much time. The PC composite curtain wall is prefabricated with the integration of insulation, decoration, window, and building structure. No scaffolding is needed during installation and the waterproof and anti-cracking performance is an improvement over conventional construction. Lightweight concrete interior walls can be flexibly removed during the change of living requirements (a two-bedroom house can be divided into a smaller three-bedroom house when family size increases).

Project design The current design team of GBS comprises 150 members working on the design and engineering of projects. Fifty of the team are BIM engineers, and ten of the BIM engineers worked closely with the research centre to create a BIM object database and BIM guidelines based on the results of research. Other BIM engineers produce designs by using the database and following the guidelines. The BIM object database contains thousands of objects (BIM Family). The objects are classified into different disciplines: each object needs to be coded and have sufficient properties and characteristics for life-cycle management. Some of the standard objects have individual ‘wizards’ to suit various projects, such as variable quantities for sizing and this is done automatically based on linking to the structural calculation. The BIM guidelines define the process of the modelling sequence, the checklist for modelling, standard remarks, and other time and labour saving issues that are automated. Designers and their supervisors can work and check the design outcomes in a timely and efficient manner. The BIM model will be used not only in the design phase, but also the following processes. Thus, the accuracy of the BIM model is the fundamental backbone of EPMC projects.

The factory Four-point-six billion RMB (0.6 billion US dollars) has been invested into the factory building. The entire area of the factory base is 0.67 km2 and the first phase of the factory is 0.23 km2. It was built in 2016 and has been in production since. The base was approved in the first batch of the 131

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‘National Sample Construction Industrialization Base’ in 2016. All the buildings inside the factory are of modular construction, which includes one five-storey office building (a four-storey dormitory is under construction), one two-storey canteen building, two six-storey apartment buildings and four modernised plants: precast concrete & prefabricated steel plant, curtain wall plant, metal wall plant and steel truss slab plant, shown in Figure 7.2. The main structural plant (precast concrete and prefabricated steel plant, 488m long × 120m wide) has two steel production lines and two PC production lines. PC production lines mainly produce PC slabs and walls. Each production line has six main steps to produce a component from the original material (rebar and concrete): rebar and formwork, automatic concrete pouring, auto shaking (vibration), finished products, auto curing and auto polishing (smoothing), shown in Figure 7.3. Prefabricated Steel production lines are more automated and mainly produce Steel Columns and Steel Beams. The production processes are: auto loading, auto rock wood loading, auto glue spraying, auto forming, finished product, auto packing, auto compressing, and auto cutting, shown in Figure 7.4. Auto slab cutting, auto splicing and welding, auto robot fine welding, auto correction, finished product, blasting and painting, auto end-milling and auto hole drilling are shown in Figure 7.5.

Figure 7.2  The factory (source: Leins Wang)

Figure 7.3  Production steps (Source: Leins Wang)

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Figure 7.4  Prefabricated Steel production lines (Source: Leins Wang)

Figure 7.5  Stone façade metal walling (Source: Leins Wang)

The project GBS has been practising and iteratively improving the ‘Three Integrations’ in its projects, and has successfully completed many modular projects such as: Shanghai AFC football stadium, the main building of the College of Civil Engineering (Tongji University), student apartments (Wenzhou Kean University), airport apartments (Hangzhou Xiaoshan International Airport) and the administrative centre (Shaoxing Government Building). The Scientific Research Building of Jinggong is one of GBS’s completed projects; it is a three-storey office with a 3,500 m2 building area. The project was finished in 2016 and its prefab-rate (prefabricated objects no./total objects no.) reached 92%, which was one of the highest prefab-rate projects in China in 2016 and is shown in Figure 7.6. It was fully designed, manufactured and built by the GBS team as a sample EPMC project. The structure of this building is steel column + integrated floor system (highly prefabricated, with flooring, structure, MEP and ceiling combined in one element, shown in Figure 7.7). Prefabricated interior wall (AIW), prefabricated exterior wall (AOW), and prefabricated integrated bathroom (ITB) were also used in the project. The entire building (excluding decoration 133

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Figure 7.6  The Scientific Research Building of Jinggong (source: Leins Wang)

elements) was finished in 15 days by 18 site workers, saved 70% of the time and used 70% of the number of site workers compared with a traditional project. This is roughly a reduction from 1,290 man days to 270 man days. Thus, workers are exposed to less risk of accidents by a factor of five times, given their number and duration of stay on-site. This form of construction therefore might be considered five times safer by this crude measure of exposure. The fact that there is little concreting and heavy lifting, as most components are craned in and bolted into position, further reduces the risk of injury and, perhaps, is better suited to an ageing construction workforce. As well as the time-saving, some other value gains are apparent: •• •• ••

90% of the dust reduced; 90% of the wet work reduced; 95% of the scaffolding work reduced.

Though there is a 35% cost increase compared to traditional on-site reinforced, cast in-place concrete projects, the expectation is that as the scale of prefabrication increases and the technology improves, the cost of such projects will reduce substantially.

Figure 7.7  Structural system of the building (source: Leins Wang)

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The management of GBS GBS has nine main departments below the executive board, as shown in Figure 7.8. The highlighted ‘Digitalization Subsidiary’ will be introduced in the third section due to its importance and innovative nature. The Project Management Office’s role is to set up a project team for individual EPMC projects; the project manager will be in charge of the whole project. The other EMPC sub-department is Management Technology, which works on the process, and creates and iterates the management system for EPMC projects. Most of the mid-level employees and engineers are experienced and well educated, having worked in the traditional construction industry for years, and they have outstanding backgrounds. BIM has been adopted since 2015 in GBS and has facilitated the enhancement and standardisation of designs, improved the design quality, reduced the occurrence of clashes and allowed the visualisation of the project before it ‘goes physical’. GBS has focused management and worker attention on the BIM adoption path and emphasises BIM as building information management rather than modelling that focuses attention on 3D and clashes rather than the levels of information available in the BIM model. Since EPMC is an integrated project delivery mode, the outcomes of projects are measured in terms of the target of the overall project, not individual departments. However, in some areas where collaboration was badly needed, the GBS team still had some issues and conflicts in the project management process and these are identified below:

Project and factory conflict. The factory production schedule should follow the project requirements to ensure the components can be delivered to the site in time. This works smoothly when the project and the production teams are in harmony. However, projects are in many ways randomly awarded, thus causing the adjustment of production arrangements and this is a common source of conflict.

Information silos Each department appears to be working hard to get their work done: they exchange documents as input/output with other relevant departments, however, the documents and document process is not well structured. Information or data cannot be traced and may not be accurate or sufficient.

Figure 7.8  Organisational structure of GBS (source: Leins Wang)

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This leads to misunderstandings or consistency errors. If a property design is wrong from the design period then wrong estimation, wrong procurement, wrong manufacturing and impossible installation on the site are inevitable consequences.

Lack of analysis of the business Nine departments, hundreds of projects, thousands of employees and huge amounts of data are generated every day in GBS but information is still lost or missing. Little of the information is clearly translated into data, especially in project management, and is neither classified nor structured. This makes the repetition of similar management problems from project to project possible, if not inevitable. Solving these three issues is seen as the key for GBS to achieve lean management and deliver highly integrated projects. All of these issues centre on information, data and collaboration. With the development of technology and science, big data and information have been well integrated into many industries and proven the value of the data and the technologies to analyse the data. GBS is now approaching the realisation of digitised EPMC management, which is why the highlighted ‘Digitalization Company’ was founded as a strategic subsidiary not a department.

Digitalisation path Overall planning of digitisation As noted above, the digitisation of the whole construction industry is at a low level currently. Most of its core business workflow runs offline, which hinders the rapid development of the industry. The digitisation of modular construction has become an urgent task in China given the volume of production required. A cloud-based system is being developed to meet the urgent requirements of digital technology in the modular construction field. Since there are different participants in a typical modular construction project, including designer, procurement manager, manufacturer, warehouse keeper, logistics manager and on-site installation manager, and orders of prefabricated components need to be given a few weeks ahead to reserve processing cycle time, and variation orders are strictly forbidden when component objects are shipped to the construction site, there is a high demand of coordination work during the whole project life-cycle of modular construction. The tasks include shop design, procurement, off-site manufacturing and on-site installation. The key deliverable of the cloud-based system is provision of a total solution for the prefabricated steel and precast concrete integrated building system to improve coordination and increase efficiency so as to reduce the waste of time and cost during the whole project life-cycle. The cloud system is being independently researched and developed by GBS’s digitisation company. Since GBS had pilot projects with different integrated building types it has targeted demand aspirations. The prototype of the cloud software came from the investigation and research of real business ‘pain points’ and difficulties in GBS’s daily work both on-site and offsite. The software designers worked closely with the GBS team, collected and analysed their requirements, designed and optimised the interfaces, and discussed and collaborated with the team to make sure the features met the real business aspirations. After the software was designed and developed, the implementation team conducted training with the stakeholders, and implemented the software together with the project team; they 136

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collected feedback and iterated the software with the software design team. The process guaranteed the practicability of the software and proved the value of this process by the first ‘go-live’ software’.

Cloud-based IoT introduction A cloud-based IoT (Internet of things) scheduling management module, based on a 3D BIM model, connects the business processes in series through scheduling management. Through this system, the production, storage, transportation and installation process of prefabricated steel structures and PC components are strictly controlled and monitored. The collaborative management, information optimisation and dynamic artificial intelligence services provided by the software can effectively solve the problem of data sharing and exchange in the prefabricated building industry chain. This greatly improves management efficiency and leads to a lean-construction enterprise management. It is proving its worth in solving the collaborative difficulties of different participants involved in the project. This section introduces three typical application scenarios during the implementation of the cloud-based IoT in Hangzhou, Xiaoshan International Airport project. ••

Scenario 1: Optimisation of component requirements (hereinafter referred to as ORP)

In the traditional process, the on-site project scheduler prepared the ORP according to the overall schedule periodically, and sent it to the production scheduler of the factory by email. It is a huge workload of the project scheduler, thus the ORP is usually only detailed to the floor and area level, instead of to the object level (e.g. Jun 1st – Jun 30th, the objects of A area at 1st Floor). Because the design drawings provided by the Design Institute need to be detailed first, the ‘component requirements plan’ during this period usually does not describe the specific arrival date of each certain component. The order of one batch of components can only be refined by the floor on which they will be installed. Receiving the ORP, the scheduler of the factory refers to the detailed drawings that are provided by the detail design team in 3D BIM software (such as TEKLA), and arranges the production of prefabricated components (e.g. column, frame beam, secondary beam, stairs, accessories), taking the particular floor as a batch. After the components are produced by the factory, the inventory is stored randomly instead of according to the on-site construction process. When the objects are shipped out of the warehouse, the situation of rummaging through the components occurs. The actual arrival sequences of the components on-site are random: steel beams come before steel column, secondary beams come before the frame. It was even more difficult to ensure whether the components would arrive in time. This incurred unnecessary queue time of on-site work, increased yard pressure and reduced on-site installation efficiency (components cannot be installed in flow order). The main reasons for this phenomenon are as follows:   i The tasks, tools and focus points between the design team and on-site project management team are inconsistent. The main task of the design team is to provide design drawings that can describe the project. AutoCAD™, Revit™ and TEKLA™ are used in different design phases. Detailed drawings are given to the project management team as a final output by the design team. MS Project™ and enterprise resource planning (ERP) are used. ID, location and time of 137

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the objects are not well linked, so that it takes days to finish the ORP and it really relies on the experience of the project scheduler.  ii Information gap between factory and project. As a connection between the project management team and the design team, the factory management team will receive detail design and the ORP from the design team and site project management team. The production scheduler coordinates the information. However, the warehouse keeper has no information about the schedule and this leads to ‘chaos storage’. iii Insufficient coordination between transportation and installation. The stevedore loads objects by checking the inventory and ORP. Since the ORP is not detailed to each object, the sequence of unloading could not be guaranteed to follow the correct sequence. This will cause rummaging and disordering of the components’ delivery and even a buck-passing situation. After applying the cloud-based IoT Scheduling Management module, the components of the core steel structure are shipped and arrive according to the specific order from the site (three construction flow sections from west to east, in order from column → frame beam → secondary beam → stairs). Since the finished components can be lifted with the crane in sequence on arrival, the on-site installation work efficiency is greatly improved and the yard pressure is greatly reduced. The specific approaches are:   i BIM models are imported into the system, and the object list can be generated automatically in the system.  ii Activity items of the schedule can be linked with the BIM model; this makes the schedule visualisation easy and the ORP can be generated automatically. iii Since the time of producing the ORP is reduced, the project scheduler can make the schedule more detailed and the stevedore can load and unload the objects in a certain sequence that fits the construction flow. iv Since the sequence and the time of object manufacture and delivery can be settled, the stockyard management and erection team can interact fully and this will lead to lean management and just-in-time project delivery. ••

Scenario 2: Project schedule control

In the traditional way, the actual installation progress of the objects on-site is usually recorded manually, and is implemented by means of a hand-drawn progress chart. This approach has the following shortcomings:   i The actual progress is not updated in a timely manner. The actual progress is checked by the on-site engineer instead of being reported by the erector; the site engineer usually checks the project progress every week.  ii Data and statistics are difficult to adduce, errors and omissions are accident prone. The manual progress chart cannot be used for automatic statistics and analysis of the completion rate of the project, so that dynamically reflecting whether the progress of the project is ahead of time or delayed is impossible to update. Because of the manual recording of data, the workload of copying is huge, and errors become inevitable. iii The history of a component cannot be traced.

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The hand-drawn progress chart only reflects the final completion status of the component, and does not show the historical time record of the component in different states (storage, delivery, arrival, lifting), and cannot analyse the initial reason for delay. It is impossible to help improve schedule management with such data. After applying the cloud-based IoT Scheduling Management module, the system automatically generates a component list and QR code from BIM models, and carries out component identity management through QR code tags. After the components are fabricated in the factory, the quality inspector of the factory is responsible for the work of posting the QR code tag. System users, like the warehouse manager, dispatcher of the factory, and on-site personnel can simply scan the QR code with the provided PDA, and the system can automatically record the history status of the component and achieve the following effects:  i Data feedback is timely; there is no need to manually input the completion status of the component afterwards.  ii Replacing the traditional two-dimensional hand-drawn progress chart with the threedimensional component-state diagram to improve readability. iii The software automatically compares and analyses whether the project progress is on time or delayed, and automatically calculates the project lag days by using the critical path method. iv Refined business data for project resumption. The system can dynamically present the following reports: •• •• •• •• ••

The current completion rate of the project; Component details, history state and information of the component; Number of components shipped from the factory, and on-time delivery rate; Logistics information like driver’s name and contact number, vehicle licence, etc.

Scenario 3: Intelligent classification warning

Under the traditional mode, only a few people know about the actual completion of the project on-site. The situation of any project lags cannot be promptly forwarded to the relevant responsible person. The leader of the project management team can only get information on the progress according to the weekly report provided by each project. This approach has the following shortcomings:   i Progress data feedback is not timely. A weekly report is written after the event, and it is inevitable that the update will not be timely and will not be synchronised with the actual progress on the site.  ii Lack of quantitative analysis and data support in progress reporting. The reason for the lag of the project is only described in the weekly report in red font. Work weekly reports are written manually and the data sources are subjective. iii No accurate warning is given to the team members playing other roles. The relevant person may not be able to react to the information related to him in a timely manner (whether the delay is caused by his department or not). After applying the cloud-based IoT Scheduling Management module, the system provides intelligent warnings for different types of delays based on the comparison of the current state

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of each component within the planned schedule. For different types and levels of warning information, users can set the alert recipient, reminder period and trigger threshold. The warning information can be queried on the system page or sent to the relevant person in charge via email. The system can provide the following types of alerts:   i Shipment warning (calculated according to the delivery status of the component compared to the demand plan).  ii Arrival warning (calculated according to the arrival status of the component compared to the demand plan). iii Project delay warning (calculated based on the installation status of the components compared to the project schedule).

Conclusions The construction industry is now at a turning point and is moving from a wasteful, inefficient, polluted one into a lean, efficient, green and sustainable industry and there is no way this trend will be reversed. Modular construction is a good catalyst for this transformation to take place and integration is the key to the gate into the new era of construction management. Modular construction needs integration:   i Integration of all disciplines: Architecture, Structure, MEP, Decoration and Facilities Management.  ii Integration of the supply chain: Engineering, Procurement, Manufacturing Construction and Facilities Management. iii Integration of Technologies: Building technology, Management methods and Information Technology. iv Integration of people’s mindset: targets, attitudes and behaviours. These four ‘integrations’ may not only fit well with modular construction, but also all types of construction as long as we want to deliver a quality project in an integrated, valuable and sustainable manner. So, we are experiencing a new industrial revolution that is based around not only the manufacturing paradigm and the use of robotics and machines displacing labour but which is also controlled by a cloud-based logistics management system. The basic starting point has been to draw on the design expertise of the Design Institutes to produce a modularised and standardised set of prefabricated units that are both transportable and erectable on the construction site. With the volume of production required the design and operation of megafactories has become an essential change in the business model. In order to ensure that these megafactories function efficiently and effectively, a logistics system, rather than a project management system, using newly developed big data and cloud-based data storage and analysis has been essential. Tracking components from initial manufacture through transportation, storage and erection has taken us from a traditional view of the project delivery process into the development of a new and burgeoning industry.

References Chen, Y.-L. and Lin, S.-Z. (2018) Evolutionary Game on Incentive Policy for Prefabrication. Journal of Civil Engineering and Management, March, 155–160. Fan, Y. and (2019) Julien, S. A. H. (2017) Is Demographic Dividend of China Ended? Shandong Social Sciences, 4, 82–89.

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Where is IPD coming from and where is it going to? Jiang, Q.-J. (2010) Summary on Development of Assembled Concrete Building Both Home and Abroad. Architecture Technology, December, 1074–1077. MHURD (2017) Letter from The Office of the Ministry of Housing and Urban-Rural Development for the first batch of the modular construction sample city and sample industrial base. www.mohurd.gov.cn/ wjfb/201711/t20171115_233987.html. Ministry of Housing and Urban-Rural Development 2017. 13th Five-Year Modular Construction Action Plan. Document No. 77. MHURD (2016) Letter from The Office of the Ministry of Housing and Urban-Rural Development for 2016 Science and Technology Project Plan -Sample Project List. www.mohurd.gov.cn/wjfb/201608/ t20160804_228424.html. Accessed 10 February 2019. National Bureau of Statistics Of China (2018) Rowlinson, S. (2018) Worker Engagement on Construction Sites – Time for a New look, in Procedures of EPOC 2018 – (Re)Organizing in an Uncertain Climate, Brijuni, Croatia, 25–27 June 2018. Wang, J. and Zhao, J. 2016. Review and Thinking on Development of Building Industrialization in China. China Civil Engineering Journal, 49, 1–8. Wang, Q. and Zhang, D.W. (2015) Spatial and Temporal Variations of PM2.5 Source Contributions Using Positive Matrix Factorization. China Environmental Science, 35 (10) 2917–2924. youcaiyun.com (2019). URL http://youcaiyun.com/NewsDetail/414.

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8 THE ROLE OF IPD IN FACILITATING DESIGN THINKING AND CREATIVITY Derek H. T. Walker and Steve Rowlinson

Introduction This chapter is most directly and closely linked to Chapter 18, relating to innovation and its diffusion. Its main focus, however, is about how an organisation might be best designed to facilitate and diffuse innovation that improves the value generated through delivering projects. In that respect it also has close links to Chapter 4 that poses the question of what is value and value to whom? It also links to other chapters because design thinking (DT) is based on the integration of diverse groups who collaborate within a culture that promotes a broad perspective on the nature of value rather than simply seeing value in monetary terms. As Carlgren et al. observe: ‘There is increasing interest in design as a strategic resource in managerial debates. The concept of ‘design thinking’ (DT) has emerged as a human-centred approach to innovation based on the ways that designers think and work’ (2016, p38). Their paper, and this chapter, focusses on DT as a managerial or organisational concept rather than purely taking the design aesthetic or functionality perspective. Carlgren et al. analysed 36 open-ended question interviews of between 45 and 120 minutes with participants from a variety of backgrounds such as innovation and R&D managers, DT practitioners and people in the organisational interfaces from six organisations. Their coded themes fell into a suggested five-step process: user focus, problem framing, visualisation, experimentation and diversity. They expand these to comment on mindsets, practices and techniques (2016, p50). We will follow this approach later in this chapter to analyse how an example of an integrated project delivery (IPD) organisation applied DT. To fully appreciate the role of DT on integrated project delivery (IPD), this chapter concentrates on its ability to impact value generation. This may be partially explained through Chapter 9’s links to the first five elements of the Collaboration Framework (Walker and Lloyd-Walker, 2015) discussed in Chapter 2. DT and creativity is a topic that stretches beyond design in terms of the shape and aesthetics of a building or infrastructure facility (or even in product or service development projects) to encompass the way that systems and processes are designed. This chapter focuses on the design of an organisational form and arrangements that most effectively generates value. We argue in this book that the IPD form has been an innovation and evolution from traditional forms of project delivery. IPD forms have been specifically designed, in a creative way, to fit a particular purpose. In that sense, DT has played its part in each chapter in this book. 142

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The specific question addressed in this chapter relates to DT and how it is associated with the formulation of the IPD approach, more specifically: How can IPD as a project procurement approach be envisaged as a designed approach that facilitates creative thinking and problem solving? The chapter is structured as follows. First we place this chapter firmly in context with the aims of this book. Various ways that DT and creativity in general that have been presented in the literature are then defined and explored. This provides the foundation for us to discuss DT in a practical way, drawing upon research undertaken by us to illustrate how IPD may be understood and made sense of. We follow up with an in-depth discussion of how designing a project-delivery approach for highly complicated, complex or chaotic projects requires an IPD DT approach and we also outline the implications of this on DT in designing-in what knowledge, skills, attributes and experience are required of IPD team members. We present and discuss an illustrative case study and finally draw our conclusions.

Design thinking within the context of this book Chapter 1 began with the question: why collaborate? Seven reasons for collaborating within an IPD form were presented in Table 1.1. Most of those motivational reasons and categories pertained to coping with uncertainty. As such, it illustrates a response designed to encourage resilience, ambidexterity and agility in responding to uncertainty and ambiguity. It epitomises a versatile way in which non-routine contexts can be constructively engaged with when tasked with project delivery. The need to integrate fragmented teams responsible for project delivery, and to facilitate an environment where their collective intelligence, experience and problem-identification and solving ability underscore the concept of IPD. In 1993, initial attempts were made to classify projects and the needs of PM with the goals and methods matrix (Turner and Cochrane, 1993). Inevitably, this now seems a naïve construct because much work has followed that attempt at formulating the challenges that faced the project management discipline. Their Figure 1 mapped out a four-square matrix with the ‘Y’ axis showing methods being well defined and on the ‘X’ axis goals being well defined. Turner and Cochrane used this matrix to then map out types of projects, their start-up approach, and how they are managed across the project-delivery cycle. Essentially they identify well-defined goals and methods as typifying engineering project types in which it is possible to use bottom-up planning and replication logic because goals, situations and contexts as well as past methods are well established and known. This was a seminal paper and naturally we have come a long way from there over past decades. Many assumptions were made, such as the nature of what may be known or unknown within a PM context. ‘Greenfield’ or ‘brownfield’ situations were not mentioned as adding any level of complicatedness or complexity. The rate of change was not explicitly stated for these projects as being significant, though they had identified Type 4 projects as research and organisational-change projects where creativity and experimentation is prominent. No specific DT strategies to deliver different project types were offered. The notion of project types, however, moved on significantly from there. For example, Crawford and Pollack (2004) introduced the concept of soft and hard projects. They contrasted these two classifications of projects as being shaped more deeply by the context with a sliding scale falling between two identified anchor point descriptors along seven dimensions: goal clarity; goal tangibility; quantitative and/or qualitative success measures; external influence 143

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permeability; solution option number strategy; stakeholder participation role and level; and stakeholder expectations. This broadened the concept of project types but still offered no DT solution to how projects should be delivered. Later, Walker and Rowlinson (2008) further expanded on the nature of project characteristics/ types to explain how project procurement delivery choices within the context of relationshipbased project procurement are made and how they may be delivered. Figure 8.1 further adapts their model to illustrate project characteristics that influence an IPD design. The degree of interconnectedness of the components form the basis for designing organisational forms, systems and methods and processes can to deliver the project. Figure 8.1 shows project characteristics as influencing the procurement and delivery choice that requires a specific organisational form to be designed that suits the required PM style. Hard elements of the project characteristics, identified by Crawford and Pollack (2004), may be linked to tangible and measurable performance indicators while soft project elements may be linked to intangible outcomes. Chapter 26 of this book discusses performance and key result areas in more depth. The project-internal and project-external environmental context also shapes the nature of the project’s characteristics. Chapter 10 discusses culture from a project-internal perspective and Chapter 28 discusses organisationally challenging external environment circumstances that may radically affect the way disaster recovery IPD projects may be undertaken. We later discuss in this chapter the impact that complexity and chaos may have on shaping project characteristics. Furthermore, the strategic purpose of a project has a significant impact on how the project delivery form may be designed and why the project is being undertaken. Stakeholder goals and perceptions about what value means for the project delivery also influence project

‘Intangible’

‘Tangible’

‘Hard’ elements

Chaos

‘Soft’ elements

Complexity Complicatedness

Environmental Context

Value perceptions Stakeholder goals

Project characteristics

Strategic purpose

Project delivery design – PM Style, Organisational Form Rules + governance

Required skill types

Experience + method known

‘craft’ skills ‘intellect’ skills

Figure 8.1  P  roject context influences upon project-delivery choice (source adapted from: Walker and Rowlinson, 2008, p40)

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characteristics. Chapter 14 deals with stakeholder aspects in depth. Thus, the characteristics of a project may be seen to be influenced by numerous factors. The project-delivery mechanism, form and the PM style need to be designed to cope with the demands imposed upon the project through the way it may be characterised. This results in a set of rules and governance arrangements that demand particular knowledge and skills about how to best deliver the project, as well as team attributes and experience in delivery projects. Relevant links between DT and other chapters in this book include Chapter 24 that discusses how IPD may integrate facilities management (FM) requirements. This aspect illustrates how DT is important to ensure that facility operators, as key stakeholders with a vital link between the utility of a facility and its end users, are considered and that their advice and comments are given sufficient weight to ensure that the project may be successfully used. In terms of required skills for DT, Chapter 12 discusses career development, team-personnel recruitment and skills development, and Chapter 11 provides an extensive discussion of knowledge, skills, attributes and experience (KSAEs) of people engaged in alliances in particular, and how the process of crafting DT may influence their motivation and commitment to a project. Chapter 10 on culture, Chapter 13 on trust and commitment and Chapter 14 on stakeholder engagement relate directly to how the project environmental context may be designed and shaped towards a more conducive designedin situation where integration may bring collaborative behaviours to the foreground. Chapter 19, with its discussion of governance, and Chapter 23 on ethics, prepare the discussion of DT towards how the project delivery form in itself becomes an act of designing a work environment in which effective integration and collaboration may flourish (or perish). Thus Figure 8.1 provides a useful way to visualise DT at the IPD-approach and contractual-form level.

Influence of complexity on design thinking Complexity and pace are also identified in Figure 8.1 as influencing factors in designing a project-delivery system. A number of triggers for uncertainty are unleashed due to the pace of project development from requirements identification through to project realisation together with varying levels of uncertainty or ambiguity that may be encountered. The above discussion of uncertainty and how this impacts decisions surrounding designing a system and approach to cope with that level of the unknown links into thinking about how complexity and even chaos may impact the design of project-delivery systems and how they may impact the way that people respond to their perception of what kind of system they believe that they are operating, and how best to cope with challenges and opportunities that are presented. This has relevance to DT because we need to develop appropriate responses to the environment that we face. Snowden (Kurtz and Snowden, 2003; Snowden and Boone, 2007) developed a highly wellregarded and useful framework, originally in a leadership and knowledge management context, but one that has also been applied in a PM context (Childs and McLeod, 2013; Ahern et al., 2014; Samset et al., 2014; Walker et al., 2017). The Cynefin Framework can be seen as illustrating four distinct situations, domains or operational systems. It follows a Johari Window concept. The Johari Window was an awareness mapping tool originally developed by Luft and Ingham (1955), adopting a two-by-two, four regions, or domain matrix. One region is about knowledge that is known to a person and open to others as ‘public’ knowledge. The second region is about knowledge known by others but not known by the person and is a ‘blind’ area. The third region is about knowledge that the person knows but others do not and this is represented as a hidden or façade-level knowledge domain. Finally there is a totally unknown area which neither the person nor others are aware of. 145

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Snowden’s Cynefin Framework transformed the Johari Window idea to describe situations or systems that people may think or perceive that they presently inhabit. The term Cynefin is Welsh meaning ‘a place or the time when we instinctively belong or feel most connected’. It is useful as it illustrates how people see themselves within a system in terms of what they may or may not know about the situation they find themselves in. The framework describes four situations, domains, states or regions of knowledge about what system a person may believe they are in and how they should respond, given they are in that systemic environment. Snowden has more lately explained the framework as comprising three states (or systems): ordered, unordered and disordered. Readers may wish to watch a very instructive eight minute YouTube introduction to the Cynefin Framework on www.youtube.com/watch?v=N7oz366X0-8 . We explain these states using a systems and DS context. Figure 8.2 illustrates a Cynefin Framework perspective. The ordered region is split into two parts. The ‘Obvious’ or ‘Highly Ordered’ region is represented by a stable system environment characterised by known-knowns. This is a system or situation where information and decision-making is quite simple because there are set rules that generally work when applied, the required data or information is readily available, easy to analyse and follows a well-beaten path in decision-making so there are standard ‘best practices’ that can be applied. Problems being faced tend to be characterised as ‘tame’ problems (Hancock, 2010) as they are straightforward to identify with a single cause and solution. Responding to action in this system requires sensing and categorising data and information and applying standard best-practice routines. There may appear to be one best solution and the system may appear bureaucratic. This is similar to the Turner and Cochrane (1993) Type 1 project. Domain 2 – Somewhat Ordered

Domain 3 – Somewhat Unordered

KNOWABLE Complicated

UNKNOWN UNKNOWNS Complex People perceive themselves to be in a unordered system. They co-create knowledge to understand cause and effect retrospectively by studying patterns. Emerging development of scope and scale helps them understand the situation and how to respond. The main task is to probe, sense signals als and data and respond.

People perceive themselves to be a sufficiently ordered system setting that cause and effect is able to determined. They can use expert opinion to assist them. The main task is to sense, analyse signals and data and respond.

Disordered Which domain are we in?

Domain 4 – Highly Unordered

UNKNOWABLE UNKNOWNS Chaotic

Domain D om 1 – Highly Ordered

People perceive themselves to be in a highly unordered system. They find understanding cause and effect to be incoherent due to dynamic turbulence in the system that seems to mainly involve crisis management.

People perceive themselves to be a highly ordered and predictable system setting. They have trusted tools, templates and best practices to draw upon. Cause and effect is obvious.

The main task is to act, sense signals and data and respond.

The main task is to sense, categorise signals and data and respond.

KNOWN Simple/Obvious KN

Figure 8.2  Cynefin Framework (source: adapted from Kurtz and Snowden, 2003)

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The second ordered situation is classified as ‘Somewhat Ordered’ or complicated. Most traditionally procured standard projects are perceived as Obvious or Complicated. Many office towers, residential blocks of apartments, run-of-the-mill factories and commercial building projects might fall into the ‘simple’ or ‘complicated’ category. No two buildings, IT systems, new product developments or change management roll-outs would be identical and while there may be differences, they may be small and modular so that standard system approaches suffice. With complicated project-system environments there may be unknowns as details to be learned about but they would be knowable. Problems being faced tend to be characterised as ‘messy’ problems (Hancock, 2010) as they have some conflicting elements and it may be somewhat unclear to identify what the real problem is and which of several potential solutions are best to action. Experts or consultants may be called upon to apply their expert knowledge but cause-and-effect chains can be readily analysed and understood by the right experts. Scenario planning may also be employed. Responding to action in this system requires sensing and analysing data and information, using expert advice and following good-practice routines. There may be several viable solutions. The focus is on thinking of challenges in a logical systems-thinking way. The third domain is somewhat unordered and would be considered complex. Unlike the two ordered domains previously discussed, this domain has many dynamic and interrelating elements to it so the ‘system’ is difficult to grasp. There are numerous unknown factors that remain unknown and so this situation resembles putting together a jigsaw puzzle with many pieces missing and even perhaps pieces from an entirely different puzzle. Typically, when faced with this kind of situation, project managers may be searching for patterns through small-scale experimentation with rapid feedback on signals, data and information. However, many patterns can only be seen in retrospect. Realising that there are unknown unknowns compels project managers to look at situations from multiple perspectives and to seek conflicting advice to get many options and possibilities explored so that responding requires emergent strategies rather than applying best- or good-practice templates. This situation may be characterised as being in the ‘wicked’ problem zone. Hancock (2010) follows the discussion of wicked problems from Rittel and Webber (1973) and the generally accepted understanding of wicked problems is that they are very difficult to discern with goals or aims poorly articulated, so the seat of the problem may be entirely unknown or misunderstood. Methods and approaches to cope with them are unclear, ambiguous or at best uncertain. Often the problem re-emerges later after having transformed or evolved into a slightly different problem so there is never a ‘right’ solution or response. The probe, sense and respond action when coping with such situations requires great intuitive rather than analytical thinking. The fourth domain is chaos characterised by unknowable unknowns in a highly unordered situation. It may also be a context of much turbulence and uncertainty with various parts of a ‘system’ seeming unconnected or disconnected, so it is impossible to use logic or intuition to discern cause-and-effect loops. Here, ‘very wicked’ problems are encountered and need to be dealt with. The main task here is act, take some action that seems plausible, sense so that signals and feedback is rapid so that the appropriate response may be to try to pull the system back to one of the other three domains. This domain is the crisis-management situation. Finally, Figure 8.2 illustrates the disordered domain which represents the person trying to perceive the situation (or system) to decide which of the four domains they may be in and how best to respond. We can see from the Cynefin Framework perspective that applying logic and categorising data and information as a response to a complicated situation may be inefficient and/or ineffective and that doing so in either the complex or chaotic domain could be disastrous. Snowden (Kurtz and Snowden, 2003; Snowden and Boone, 2007) provides illustrations of how people 147

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taking a bureaucratic approach when facing a complex and particularly a chaotic situation fall into a dead zone when each action makes things worse and takes too long. Uncertainty and ambiguity challenge well-established order and we can see from Figure 8.2 that often people are left in the stressful situation of either not knowing which domain they are currently in or entering, or else they mistakenly assume they are in a different domain than the one they are actually situated in. Given that many projects are situated in highly volatile, turbulent or difficult-to-make-sense-of environments, deep thought needs to be applied to designing an approach to coping, encouraging and enhancing resilience and ambidexterity to manage in such situations. Lenfle and Loch (2010) trace the origins of PM across many decades and show how PM has traditionally emphasised control as a prime PM virtue and feature, stemming from the 1950s to the latter decades of the 20th century. They highlight the deficiencies of PM being focussed on control rather than early examples of PM that they refer to as ‘the roots’ that included the Manhattan Project to develop the atomic bomb. Those involved in that project had to face total uncertainty on many fronts and had to rely on their ingenuity and ability to think laterally to manoeuvre, rather than move in a set direction; to be highly adaptive rather than adoptive (blindly accepting received PM practices that had been codified and were generally only applicable in Domain 1 of Figure 8.2). Pich et al. (2002) argue that an appropriate response mechanism to deal with Domain 3, and perhaps 4, may be best designed around learning to optimise the response through analysing patterns of hypothesised cause-and-effect loops gained from experienced episodes. However, this is time-consuming and as Snowden (Kurtz and Snowden, 2003; Snowden and Boone, 2007) observes, often the chaotic Domain 4 and complex Domain 3 situations offer little or no time for reflection on how to learn and optimise responses. Thus, taking a reflect-and-learn approach may lead to being overwhelmed or missing important feedback signals due to the pace of rapidly unfolding events. The Cynefin Framework suggests that in Domain 4 (chaos) the most effective response is to take intuitive action, rapidly assess the observed impact and decide to ramp up or down a series of rapid small recalibration actions to manoeuvre the situation towards the complex– complicated boundary where more readily available expertise and knowledge resources may be used to cope with the situation.

Creativity, intuition, improvisation and design thinking Leybourne and Sadler-Smith (2006) argue that in tightly structured situations where much of the context is known, and salient variables are quantifiable and controllable, there may be little need for project managers to use their intuition or to improvise because they use more cognitive approaches that are appropriate in such circumstances. These situations may be what Snowden (Kurtz and Snowden, 2003; Snowden and Boone, 2007) refers to as the ordered domains of simple and complicated. However, in most loosely structured situations where there is ambiguity and uncertainty Leybourne and Sadler-Smith (2006) revealed (based on analysis of 163 survey respondents mainly from the financial services sector) that improvisation and intuitive action are more appropriate. Many of the project situations where IPD is appropriate fall into the category of being highly complicated or complex, where plans often experience severe challenges and need to be adjusted and reconfigured to cope with a dynamic, ambiguous and uncertain changes in circumstances surrounding the project. Thus, applying creativity, intuition and improvisation provides a coping mechanism to deal with necessary changes in plans. This raises the question, what do we actually mean by creativity, intuition and improvisation? 148

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Creativity and the creative process There have been many attempts to develop a standard accepted definition of the term ‘creativity’. Runco and Jaeger begin their reflections on the history of the term and state that ‘The standard definition is bipartite: Creativity requires both originality and effectiveness’ (2012, p92) but conclude their discussion that a third criteria surprise should be added. The term implies novelty or originality and also that any ideas generated need to be useful to be considered of value and worth taking forward to be applied. The criteria surprise is also considered necessary because creativity is accompanied by what is often referred to as an ‘“Aha!” or eureka moment that certifies the surprise’ (Simonton, 2012, p98) and this differentiates a creative from an innovate idea, which may emerge from an extension to an existing idea rather than developing as a new idea. The process of creativity has also attracted a lot of attention and been extensively written about with a significant serious focus on ways of thinking. Sadler-Smith (2015), for example, revisits the seminal work of Wallas (1926) and reminds readers of its ground-breaking idea that the creative process is a staged process that takes creative thinking through a series of conscious states from consciousness through fringe consciousness to non-consciousness in an iterative fashion as illustrated below. Figure 8.3 illustrates the creative process synthesised from Sadler-Smith’s (2015) interpretation of Wallas (1926). The initial stage is preparation which requires expertise, schemas or guides based on past experience, or theories that allow the problem to be addressed to be framed. This will not happen of itself and so there needs to be a stimulus or motivating need to solve an identified problem. To be effective and broad in the perception of what the ‘real’ problem may be a

Diversity, cross-cultural

System thinking

Communities of practice

Expertise, schemas, data/knowledge, stimulation problem framing

Synthesis, hypothesis testing recursive concluding

Expert validation, sense making

Illumination

Verification

Consciousness

Preparation

Fringe Consciousness

Nonconsciousness

Creative intuition insight, judgement

Intimation

Relevance, contextual understanding

Incubation Supportive organisationally

Diversion, unconscious thinking, setting, dis-association Cognitive safety

Processes

Support mechanisms

Figure 8.3  The creative process (Source: Adapted from Sadler-Smith, 2015, p348)

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diverse and cross-cultural support mechanism is preferable (see Chapter 10 on how culture may be perceived in this context). This is a highly conscious phased activity. The second phase, incubation, may take place over a short or long time but it happens during a time when those involved are not conscious of the cognitive and emotional processing that is occurring. This may happen during rest or relaxation time or enforced ‘time-out’ playing time if it forms part of a more formal creative thinking workshop. The key aspect is that those involved are disassociated from the problem and they are placed in a setting that distracts them from consciously thinking about the problem. There needs to be a safe thinking support mechanism for this non-conscious incubation work to take place. Sufficient incubation leads to the intimation phase that takes place at the fringes of consciousness to focus thought on the identified problem. Underlying expert intuition about the problem and insights from similar situations and judgements on those insights triggers cognitive activity. The relevance of the problem and understanding of the context shapes this phase. A supportive organisational support mechanism helps this phase mature. The fourth phase, illumination, takes place at the conscious level. It involves synthesis of insight judgement and pattern-matching insights, theories, contexts and the original hypothesis to shape and re-shape the understanding of the problem and likely solutions. This happens in a recursive fashion and is aided by diversity and cross-cultural appreciation to enrich system thinking so that a more effective conclusion may be reached. This is what Kahneman (2011) refers to as a deliberate thinking slow approach in contrast to thinking fast (using intuition to shoot from the hip). Intuition has its value in thinking fast but thinking slow challenges and tests more assumptions. Systems-thinking mechanisms are needed at this phase. The fifth phase is verification, in which experts in the field concerned acknowledge and accept the value of the creative output and make sense of the new ideas (Csikszentmihalyi, 2006). This is best undertaken within a collegial community of people who have credibility as experts. In the case of creative output derived from commercial operations, the community of validating experts are those people and organisations that may be classed as innovators or early adopters of innovation (Rogers, 2003). This becomes a form of peer review. The supportive mechanism in this phase is the use of communities of practice, a formal or informal group of experts drawn for practice and/or academia who share knowledge and insights (Lave and Wenger, 1991; Wenger et al., 2002).

Intuition and improvisation As noted above, Kahneman (2011) refers to thinking fast in his book as intuition and shooting from the hip. He was inspired by Herbert Simon who had studied chess masters and argued that after thousands of hours of practice they become experts. Simon (1992, p156) observed that: The core of an expert system, in human or computer, is a system of productions that operates like an indexed encyclopedia. Cues in the situation (external or imagined) are recognized by the conditions of productions, triggering the actions associated with these conditions. The case in which the cues are predominantly external is sometimes called situated action. We may describe intuition as thinking fast but, behind this action, a huge amount of analytical thinking and pattern-forming has been undertaken. Dörfler and Ackermann (2012), citing many authors through their literature review, argue that intuition at its higher levels is strongly associated with high-level expertise and can 150

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therefore be considered as reliable. They also discuss at length the way that knowledge may be acquired tacitly, giving an example of being blindfolded and exploring a room by holding a stick and ‘feeling’ around the room to understand its morphology. Polanyi (1958) introduced the term ‘tacit’ knowledge as knowledge that we gain but can’t explain. It is gained experientially rather than through explicit forms such as reading theoretical or empirical literature. They point out that, at first, the end of the stick commands our focus awareness (how we interpret and ‘feel’ the room) and the room is our distal or subsidiary awareness, so that the stick is the subject and the room the object. However, as we become used to the sensation of feeling through the stick, the room becomes our focus and the stick becomes a distal subsidiary-awareness object. Intuition plays a part in building tacit knowledge about a situation or environment through our integration of particular explicit and previously acquired tacit knowledge with sensed understanding of our distal or subsidiary awareness. Improvisation also makes use of these concepts. When improvising, we drift into unknown and often unplanned-for situations. However, we use all forms of knowledge, what we explicitly know as well as that which we tacitly know, and then we follow a process of pattern matching and sense-making to move from one position to another in an intuitive and playfully creative way. This has been explained as following improvisation in the way that musicians play jazz (Crossan et al., 2005, p131). Improvisation has also been discussed in terms of agile project management (APM) that features core component elements of creativity, intuition, bricolage, adaption and innovation and that generates compression and learning as outputs (Leybourne, 2009). Most of these terms have already been discussed and explained. Bricolage is an Old French word that derives from crafting work where anything useful or potentially useful, such as materials, tools and techniques that come to hand are adapted or adopted. Compression refers to ‘shortening and simplifying steps in order to reduce tasks or the total process’ (Leybourne, 2009, p528). The above illustrates how creativity, intuition and improvisation create a nimble and ambidextrous organisation or project team. Ambidexterity is the ability to apply nimble and reflexive practices of knowledge and skill exploration together with exploitation. Ambidexterity has emerged as a growing theme in the PM discourse (Turner et al., 2015). When these ideas and concepts are applied to the needs of coping and managing in complex and chaotic situations, as discussed and illustrated in Figure 8.2, we see that these KSAEs form the intellectual capital required to deal with the management and leadership styles identified in the Cynefin Framework (Snowden and Boone, 2007).

Resilience and design thinking A recent analysis of the resilience repertoires in exploratory projects opens up an interesting way to look at how resilient practitioners respond to complex situations in developing new products and services (2019) that also has relevance to this chapter. Wied and Oehmen’s research investigated resilience in 14 Danish firms by interviewing 19 senior executives about how they coped with uncertainty and how they changed plans and actions and acted with resilience. Their basis for analysis was that the project ends become a function of the means that were applied and the circumstances encountered. What is most relevant about that idea is that it provides a useful framework of possible responses that may be considered in uncertain situations. What this study brings to our attention that is particularly valuable is that there are many ways in which a strategy to undertake a project can be designed. DT needs to help us consider both how the actual product or end outcome is aesthetically or functionally designed, and also how the processes by which the ends are realised are designed. DT is as much about the process as the end product. 151

Derek Walker and Steve Rowlinson Table 8.1  DT responses to uncertainty in means, ends and circumstances (Source: adapted from Wied and Oehmen, 2019) Response mediator Response specific category Relevance to DT Means (a)

Adjustable means

Means (b)

Means (c) Means (d)

Means (e) Means (f) Ends (a)

Ends (b)

Ends (c) Circumstances (a) Circumstances (b)

Maintaining the project vision and key results areas but adjusting the resources applied. This requires designing a system for flexibility in developing the budgeted resources and how and when they may be applied. Redundant means Designing and creating parallel paths with competing (or collaborating) options being pursued to be able to, at a critical point, cull the options that appear least likely to succeed. Sequential means Fashioning an ability to try several options one after another using an act–reflect–learn action, learning, recalibrating approach. Incremental means Designing an approach taking small, experimental, exploratory steps to learn and reflect and take further appropriate action. Reversible means Designing an approach that allows action that can be reversed or revised at low-cost impact. Buffered means Providing extra capacity and resources to handle unforeseen events that necessitate deviation from plans. Fluid ends Being open to what the project can deliver, for example for obsolete targets, changes in the market or within the organisation in terms of strategic direction. Multiple ends DT for an approach for segregating the expected outcome so that partial outcomes may be pruned where the project has sound viable prospects that could be pursued. Understated ends Designing messages to deliberately communicate conservative expected achievement goals in response to uncertainty. Influenced Seeking to find and apply ways to influence uncertainty by circumstances design, being pro-active e.g. with stakeholder engagement. Clarifying and seeking Timing action, as well as the extent of resource and effort an opportune time commitment, through peripety by timing effort to naturally coincide with the significant entrance of an event (Engwall and Westling, 2004).

Plans often, if not almost always, go astray. This lesson is emphasised by Hällgren (Hällgren and Maaninen-Olsson, 2005;2009). What is important to consider when designing systems and processes, routines and procedures, is to allow for mitigating against problems causing plans to drift. Resilience, agility and nimbleness are critical attributes needed for being responsive to complex and chaotic situations. Key relevant questions that relate to being resilient and responsive include: ••

How immovable are the planned ends? {{ {{

••

Are they ‘set in stone’? Are they open to serendipity? To what extent can opportunity be extracted from unplanned deviations from plans?

How volatile or dynamic are the circumstances? {{

Is the internal-project context or external environment one that can be reasonably anticipated and controlled for? Is it one that needs an approach that ‘goes with the flow’ and needs the response design to be flexible, nimble and agile? 152

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••

How determinable are the means? {{

The (a) to (f) in Table 8.1 items suggest that multiple responses to designing plans are highly dependent on the nature of the expected outcomes and context.

Given the observed and actual circumstances impacting upon any specific project, we argue that the system designed to plan and then take action should be cognisant of how certain or uncertain these circumstances are. This could result in those engaged in managing the project having appropriate leeway to manoeuvre with those tasked with oversight of the project, considering the balance of control and trust to apply initiative and innovation in responding to unexpected deviations from plans.

Designing a project-delivery approach to cope with complex projects Key factors to be considered when designing a project-delivery system that can cope well with complicated, complex or chaotic situations is to design them for project-delivery teams and team leaders who are flexible, adaptive, resilient, ambidextrous and able to learn and absorb insights.

Human capital requirements to cope with complexity and chaos Chapter 11 discusses in great depth the knowledge, skills, attributes and experience (KSAEs) with Table 11.2 detailing and explaining ten KSAEs for an alliance manager and others participating in alliance IPD approaches. KSAEs relevant to dealing with complexity or chaos are discussed in Table 8.2. IPD projects move through phases where the situation is more akin to the traditional ordered, simple, or complicated project situation where a strategy of exploiting existing knowledge, techniques and processes is appropriate because precedence and consequence patterns are discernible to guide planning and action. These same projects, however, also frequently experience complex or chaotic phases where these patterns become disjointed through disruptive and often dynamic internal or external influences. Precedence and consequence patterns become difficult to understand and therefore there is great uncertainty about how to react. During these phases there is a need for people to experiment, be creative in thinking through scenarios and potential plans and outcomes, and to be nimble, agile and versatile. They also need to be open to re-framing problems encountered and perceiving them from multiple perspectives. This is where the resilience repertoires ((Wied and Oehmen, 2019) discussed above become vital in addressing chaos or high levels of complexity to dampen the impact so that situations may be steered and shaped towards being merely highly complicated, where more traditional PM skills and knowledge can be more confidently applied. This is a process of switching between exploitation, where the situation is predictable, and so existing knowledge can be applied, to exploration strategies where unpredictable situations require a more adventurous approach of experimentation (March, 1991) in which people engage within a no-blame cultural workplace environment (Lloyd-Walker et al., 2014). Some situations lead to a project resembling a vanguard project (Brady and Davies, 2004) where totally new approaches are tested and applied. Table 8.2 highlights the critical KSAEs required of team members and leaders of projects in which there is a need for IPD due to the inevitable complexity of its delivery. This requires designing a system and IPD form that makes best use of the above KSAEs. 153

As the Cynefin Framework in Figure 8.2 indicates, the team and its leaders need the requisite skills and experience to make sense of: complicated situations where patterns of cause and effect are discernible; complex situations to enable them to intelligently probe, sense and respond; and in chaotic situations to be able to act, sense signals and rapidly respond appropriately. Teams need advanced skills in how to switch between managing projects using an exploitative or exploration approach. Traditional or more stable routine conditions may require ‘hard’ PM knowledge processes and skills for planning and control. More fluid and dynamic complex or chaotic situations may call for ‘soft’ PM processes and skills where an emergent strategy is needed (Mintzberg, 1979;1987; Mintzberg et al., 1998) that may even include muddling through (Lindblom, 1959;1979; Hällgren and Wilson, 2007). Understanding the fundamental purpose of the project is essential, otherwise the team may be distracted into following the agenda of producing the most aesthetically pleasing, technically clever or most beneficial solution to peripheral rather than identified core stakeholders. These skills help answer the question ‘why are we doing this project?’ Understanding the project purpose through a clear appreciation of value and its generation and how that relates to stakeholders lies at the heart of design thinking (Brown, 2008; Carlgren et al., 2016). Reflectiveness is central to project work in complicated or complex situations where there is uncertainty about how systems and dynamic elements interrelate. What may work perfectly in one situation may be disastrous in another. Reflecting is also about mentally exploring and modelling plans and actions to anticipate what may turn out as an unexpected consequence. Being adept at rapid reflection is also needed in complex or chaotic situations. Those who are highly reflective are also often virtuosos (Dreyfus, 2004) where having deep experience and reflection allows knowledge to be hard-wired into a body almost as an automatic reaction. High-quality reflection on multiple similar experiences builds this powerful ability.

  1 – Technical skill and experience. Possessing requisite qualifications and experience is central to the professional field that forms the core of the project.

  4 – Reflectiveness. Being a systems thinker, strategic in think–aim–act versus act–think–aim. Reflectiveness is about people understanding the context and knowing the context is the key when self-analysing situations in terms of outputs, outcomes and likely consequences.

  3 – Business skills and experience. Understanding the strategic purpose for the project’s expected output and outcome. Projects exist for a purpose; that purpose may be described as the ‘business’ and not be limited to commercially oriented ‘business’ but include other forms.

  2 – PM skills and experience. Having the expected general skills and competencies is required of any project manager/leader.

Relevance to managing complicated, complex of chaotic projects

KSAE and description

Table 8.2  KSAEs for IPD team participants in complex/chaotic situations

  7 – Resilience. Demonstrating adaptability, versatility, flexibility and persistence. It also means being able to effectively learn from experience.

  6 – Appreciation. Understanding the motivations and value proposition of stakeholders. This attribute includes empathy, having the ability to appreciate and accept another’s perspective as being valid for them in the way that they may interpret the context. This attribute also suggests high levels of emotional intelligence.

  5 – Pragmatism. Being able to get on with the job, being politically astute to make appropriate and defendable compromises, and working within known constraints. Pragmatism is also about balancing the understanding of signals from a cognitive as well as emotional perspective.

(continued)

Interpreting and re-framing rules to suit the context and way in which action is justified is central to being pragmatic. The IPD-alliancing form encourages ‘blue-sky thinking’ and challenging the status quo. It may be pragmatic to spend additional time to rethink and revisit a design idea or delivery plan if there is justifiable doubt about its suitability for a given context, rather than press ahead while feeling uncomfortable about the potential risk of doing so. Complex and chaotic situations require probing and acting in a pragmatic way, understanding that their purpose is to learn and understand more about a situation. IPD-alliancing requires leaders and team participants have the ability to plan and take action while judging the most effective response to colleagues and other stakeholders. It is about their recognising that value is the key in influencing others and being influenced. Being appreciative means respecting diversity of views and valuing differences in preferred approaches. It is also an essential attribute for undertaking a constructive dialogue with others rather than either forcing a viewpoint or advocating a position blindly to ‘win’ an argument. Cross-discipline and cross-generational appreciation abilities become more critical with digitally disruptive technologies becoming more commonplace. The ability to be appreciated has also been demonstrated to be essential for what has been termed empathic design (Leonard and Rayport, 1997). Empathic design uses a customer-focus approach to critically analyse the target stakeholder’s value proposition when developing a design. An IPD-alliancing approach is often taken because of uncertainty and riskiness surrounding the project. Coping with complicated or complex projects requires experimentation and a trial-and-error approach. This means that plans are seen as targets and that they should be used as beacons to steer towards even if that means side-tracking. Thus resilience is a vital attribute for AMs and team participants.

Often the wise path is the ethical path. IPD-alliancing in construction infrastructure delivery, as is discussed in great depth in Chapter 23 in this book, is about delivering value to both a targeted stakeholder group as well as society at large. Wisdom in teams helps them make sustainable choices with minimal chances of adverse unforeseen complications and problems. IPD-alliancing for complex projects requires bravery and courage to engage in ‘bluesky thinking’ and trying new approaches that may be innovative and improve efficiency. Being courageous also means sticking to one’s values when a dangerous compromise is contemplated. IPD-alliance projects tend to be highly accountable to society. This attribute helps to guard against ill-advised convenient shortcuts being taken. The foundation upon which IPD-alliance teams collaborate and reach agreement is based on trust. It is therefore vital that the AM and team participants maintain their integrity and live by the values they espouse. One important selection criterion for being in an alliance team is demonstrating integrity.

  8 – Wisdom. By being the person with opinions and advice who is valued, consistent and reliable and that others instinctively refer to. Wisdom links to thinking through implications from a variety of perspectives, weighing and balancing often conflicting evidence and advice.   9 – Being spirited. The attribute of spirit or courage is an important attribute that suggests a willingness to challenge prevailing assumptions when a niggling doubt may exist. Challenging the status quo is also valuable in developing creativity.

10 – Being authentic, approachable and trustworthy and being seen as open to ideas, collaboration, discussion and new ways of thinking. Authenticity is being consistent through acting in accordance with espoused values.

Relevance to managing complicated, complex of chaotic projects

KSAE and description

Table 8.2  (continued)

The role of IPD in facilitating design

Design thinking applied to framing an alliance approach Means, ends and circumstances provide a useful way to start using DT to develop an appropriate contractual approach for IPD projects. It begins with thinking about what form the IPD arrangement should take to allow the establishment of means and ends that are flexible and responsive to stakeholder expectations and demands as well as shaping or being shaped by the project’s evolving circumstances. The objective would be to design and create a resilient and adaptive organisation. Figure 8.4 illustrates the main two dimensions that design of the delivery ‘system’ should follow. That is, the degree of integration of the team and the collaboration between key team participants, particularly with IPD-alliance arrangements. Integration of the alliance owner representative participant (OP) and the design entity, delivery contractor and often the facility operator non-owner participants (NOPs) can be designed for a tight fit or a loose fit, or anything in between. A tight fit pushes the OP and NOPs towards greater commonality of shared systems. For example, a united one-team comprising the OP and NOPs in an alliance (such as that adopted in Australia, New Zealand and Finland) will use a shared project-accounting system with the OP paying all direct and indirect project-related expenses with the agreed profit margins forming the ‘at risk’ component of the gain- and pain-sharing arrangements. A target outturn cost (TOC) is developed from the project briefing documents through a process that is rigorously monitored for probity to ensure that the OP and NOPs do not engage in any behaviour during the tender period that is contrary to the project-alliance guidelines (Department of Infrastructure and Transport, 2011b;2011c) and that an independent cost consultant provides a cost-checking mechanism to ensure that the TOC is reasonable and neither inflated nor too low to be achieved. The TOC process is discussed in detail in Chapter 27. The TOC becomes

Innovation strategy

Organisational structure

Governance arrangements

Integration

HRM strategy

Collaboration Co-location and co-identification

Project culture

Leadership style

Team/individual’s behaviours

Figure 8.4  Designing the IPD form

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the fixed target that the united team steers towards achieving. The gain- and pain-sharing part of the alliance agreement is determined by the performance delivery of the project as a whole. If the actual outturn (AOC) costs are less that the TOC then a profit ‘gain’ in addition to their agreed profit margin is distributed to the alliance participants. If the AOT is greater than the TOC then participants share the ‘pain’ by eating into their profits. Another example of a ‘tight fit’ between the OP and NOPs is a common design system. For example, within the UK IPD context, Tee et al. (2019, p55) identify a number of key elements for managing complexity and interdependence in the Heathrow Terminal Five (T5) project that was managed as an IPD project. Among these were: a risk and incentive alignment between parties; co-location and co-identification of the united team; and a single design-model arrangement that all participants used. They quote an interviewed participant who was very firm in support of the single-model approach. Commonality of shared design and information processing systems and the common cost monitoring and control system obviates many interface problems that often occur in non-IPD projects, such as problems associated with design clashes, re-work and reconciliation of cost-accounting systems because the one system is used by both the OP and NOPs. Most IPD projects also have substantial co-location where teams from the OP and NOPs share office space so that they constantly rub shoulders and discuss issues in a collaborative manner. In many projects, and in the United States of America’s (USA) form of IPD in particular, the united team is substantially housed in a ‘big room’ environment where design issues can be dealt with in an integrated and collaborative way, often using sophisticated groupware. Fischer et al. (2017, p46) provide a photograph of team members collaborating in a big room on a USA project and another example is illustrated by Dave et al. (2015, p558), as well as a detailed description of the practicality of the big room on an alliance in Finland (Alhava et al., 2015). By co-locating and acting as a single united team, these IPD-alliance forms also co-identify. They often do so by adopting a specially designed project logo, distributing a project newsletter, and by all participants using a project-identity email domain address rather than their ‘home’ organisation’s one. They also use other stakeholder communications designed to reinforce a united team image that is presented to the world. Further collaboration may be designed-in through an effective human resource management (HRM) strategy. Chapter 12 discusses this aspect in more detail. The DT aspect may relate to the way that teams of people are recruited and the design of on-boarding systems to ensure that they understand the IPD culture and expected behaviours. The HRM strategy may also include DT in the way that participants are encouraged to shape their careers. The IPD agreement locks in the extent to which integration will occur between teams as well as influencing the extent of collaboration. Most IPD projects in Australia and New Zealand are delivered through project or program alliances. Chapter 21 in this book provides details of how the processes, means and PM-enacted practice elements of the Collaboration Framework discussed in Chapter 2 are configured. Specific elements of this component of the Collaboration Framework are designed to enhance both team integration as well as collaboration. More specifically these comprise: consensus decision-making; a focus on learning and continuous improvement; the incentive arrangements; the requirements of pragmatic learning-in-action agreement provisions; transparency and an open-book accounting process; and mutual-dependency and accountability-alliance agreement provisions. The design of the alliance-governance agreement provides a foundational platform for these processes, means, and how PM-enacted practice elements are performed. For example, the governance arrangement includes the alliance agreement as well as specifying key result areas and the organisational structure for the project. In alliancing there are two levels of team coordination mechanisms. The alliance management team (AMT) 158

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comprises the day-to-day operational management oversight and is similar to many project integration group mechanisms seen on traditional projects, except that the way the teams work is specifically on a best-for-project basis. Alliances also have an alliance leadership team (ALT) as a kind of board-level type coordinating and oversight mechanism, Chapter 19 specifically discusses and explains alliance AMT and ALT mechanisms. The main point is that these are designed into the alliance agreement and form of delivery. Figure 8.4 also illustrates three boxes: project culture; leadership style; and team/individual behaviours. In the case of alliancing, and also with other advanced IPD forms such as the T5-type arrangements, we see a DT approach to each of these boxed aspects. The Australian and New Zealand alliance agreements, for example, have specific contract clauses that are designed to promote and reinforce collaborative cultural behaviour with terms used such as ‘we will . . .’ rather than ‘you will . . .’ that designs-in a culture of joint responsibility for the project (Department of Infrastructure and Transport, 2011a). A study of alliance-manager professional excellence (Walker and Lloyd-Walker, 2011) found that an authentic leadership style, as indicated in item 10 in Table 8.2, was central in differentiating excellence in allianceteam leadership. Alliance-team behaviours are specified and designed to be collaborative, with requirements for behaviours and characteristics such as respect for others in the alliance (Ross, 2003; Ross et al., 2014) and alliance elements such as consensus decision-making by AMT and ALT members (see Walker and Lloyd-Walker, 2015, Table A17, pp203–205 for details). The no-blame and no-litigation clause in Australian alliances is designed to minimise opportunistic and defensive time-wasting routines (Lloyd-Walker et al., 2014) as Ross et al. (2014, p11) argue ‘This meant there was no longer any incentive to argue over which party bore a particular risk or blame each other – instead the commercially sensible thing to do was to work together as one team in all circumstances – exactly the kind of behaviours required to succeed in high risk environments’. A successful alliance culture has been shown to lead to creating an ambience in which commitment and trust flourishes that is designed-in by the nature of the alliance agreement (Walker and Lloyd-Walker, 2014). In summary, we argue that the alliance agreement and the manner in which many alliances in Australia have been conducted demonstrate that the way that teams are integrated and encouraged to collaborate has been designed into the approach. Many features of the alliance agreement clearly encourage high levels of integration and collaboration. These include the no-litigation clause, the ‘we . . .’ rather than ‘you . . .’ language, and the behavioural contractual conditions having been carefully drafted and designed to achieve the intended IPD outcome. The flexibility that this creates means that effort can be directed to seeking innovative approaches to solve problems or to improve performance rather than teams engaging in defensive routines to shift blame should a dispute arise. The fixed TOC with its collaborative process of development (see Chapter 27 for details) and gain- and pain-sharing arrangements (see Chapter 26 for discussion about the impact of this on project-delivery performance) means that the alliance team’s response to challenges is one of steering a path towards achieving the TOC and not simply claiming contract extras. The alliance contract is designed to obviate any problems of contractors and designers seeking additional funds or time – the TOC is not a costplus arrangement but a fixed target that participants must reach through innovation and being creative in finding alternative paths to meet the TOC objective.

Case study of an alliance to demonstrate design thinking This chapter so far has been largely conceptual in its discussion of DT in IPD projects. In this section we refer to a case study (highlighted in Chapter 17) that has its focus on the Level Crossing 159

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Removal Program (LXRP) program of 11 project alliances. We refer readers to Chapter 17 for details of the case including, its research approach, the number and characteristics of interviewed senior alliance practitioners involved in the alliance, and the way that data was gathered and analysed. We summarise below its scope and scale to introduce the study. The LXRP is a major infrastructure investment undertaken by the Government of Victoria through the purposefully established Level Crossing Removal Authority (LXRA). The program comprises 11 alliance work packages that in turn deliver an AUS$8.3 billion integrated program of projects as of July 2017 and the case study related to the first alliance package (Walker et al., 2018). From an innovation perspective, the client of a program alliance expects that continuous improvement and breakthrough innovation will deliver benefits across the program. Key performance indicators (KPIs) are designed to ‘tighten up’ performance expectations from one project to another to reflect innovation improvements and lessons learned being effectively diffused across the program. This has been the typical experience according to research undertaken on Australian program alliances (Walker and Harley, 2014; Love et al., 2016). Five innovations were observed to emerge from the case study findings. First, the LXRA decided to design-in continuous improvement and innovation diffusion into subsequent alliance packages after gaining experience with Alliance Package 1. This was done by creating two key result areas (KRA). First, continuous improvement innovation demonstrated within an alliance package and second, innovation diffusion across the alliance packages. The first KRA was measured by a key performance indicator (KPI) that measured demonstrated efficiency improvements due to innovations. The second KRA was diffusion of that innovation to demonstrate improvements on other alliance packages in the LXRP that were measured by a second KPI. This clearly showed how, in this alliance, innovation and innovation diffusion were designed into the alliance agreement. Second, and linked to the first innovation, was the establishment by the LXRA of a community of practice that they called the joint coordination committee (JCC). A community of practice is an entity formed officially or unofficially to bring people together to share ideas and interests and where information about the innovation and how it works can be shared (Lave and Wenger, 1991). The JCC role was explained by LXRP-2 in the following terms: So there’s the joint coordination committee, which LXRA operate, which started (I think) on the regional railing alliance, and it’s been used on the major agencies packages. I sit on alliance managers’ sub-committee. The JCC – the joint coordination thing – is all very senior people from all other programs and projects, and then underneath there there’s subject matter expert groups, there’s an alliance-manager group, there’s a sustainability group, a design group, a construction group, and all of these equivalent positions from the different projects meet. But up until now – until this last program has been awarded – we’ve all been in competition with each other to win projects, so now is the opportunity; now that all the projects are awarded we’re not competing anymore – at least not to win projects, but competing to be better than each other, which is healthy – we can now turn up and we can share ideas and we can talk to each other and we can say ‘well how is your project. . .?’ This approach to sharing innovation ideas and how they are implemented is clearly designed into the system and institutionalised. The fourth innovation relates to the LXRA-identified KRA of social-value delivery through the concept of the program leaving a positive legacy. This KRA consumed considerable attention at the front-end planning and design for alliance packages. The means to achieve a positive legacy 160

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was designed-in through a consultation process that included local community representation from the project locations as well, including an Urban Design Advisory Panel. Interviewee LXRP-3 in the Walker et al. (2018, p27) report is quoted as saying: So that was caught quite early, but what we managed to do with VicRoads was to capture a series of key result areas into the alliance documentation, particularly around urban design outcomes, and VicRoads established a group called the Urban Design Advisory Panel. LXRA’s now got a formal Urban Design Advisory Panel as well. It’s chaired by the Office of Victorian Government Architect, and it’s seen to be a bit of an independent, sort of, check and balance on the quality of the product that’s being delivered. So not just removing the level crossing, but what are we actually leaving as a legacy for the generations to come? This innovation was clearly a DT response to developing a legacy KRA. The fifth innovation we discuss in the DT context was the ‘37-day blitz’. This provides an example that illustrates collective action through an integrated team to respond to a critical challenge and it also illustrates how the response was possible because of DT and the way that DT shaped the response. The background details of the 37-day blitz may be found in Chapter 17’s Case Study 1, so we will not repeat the background storyline. The diagram below summarises the complexity and scope of the 37-day blitz. This is sourced from a presentation made to the Project Management Institute in Melbourne on March 28th 2017 by the Alliance Package 1 alliance manager, Mr Stephen Litterick. The scope and complexity of the work was considerable. The project-alliance contract had been delayed in being finalised beyond the expected time in the TOC developed by the alliance syndicate. There was a fixed target end date and so the planning work method assumptions had to be totally revisited. This resulted in an ambitious plan to close down a section of the rail line. The works involved excavation, setting the new rail foundations and rails, as well as installation of prefabricated station platforms. Over 1,000 workers worked around the clock

Figure 8.5  Summary of LXRP Alliance Package ’37-day blitz’ event1

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in shifts along a three-kilometre corridor, and the AMT and ALT had to respond to the tight schedule and be available to cope with any problems as they might arise. The original plan for bridge construction over the rail at the three rail crossings was changed along with the sheetpiling approach to enable the works to be completed on a 24/7 basis of two 12-hour work shifts for the 37 days. Passengers were transported between the end points of the works by bus for that 37-day period and the rail network was adjusted to allow trains to be stopped at the construction work boundary points. The way that the team went about this challenge illustrates how the alliance collaborated at technical and interpersonal levels. In response to the challenge of starting later than planned, the alliance team revisited the TOC plan assumptions and radically challenged these assumptions and, through its risk-management exercise, identified opportunities to revise the plan and improve upon it. These may be summarised and illustrated in Table 8.3. Four assumption changes are illustrated above but there were very many more. The point we make is that the alliance was able to adopt radical innovations and totally rethink their original TOC plan. The ability to do so was a result of DT about the project-delivery system and approach and how it could enable and facilitate this example of dexterity and resilience. Table 8.3  Assumption-challenging examples and revised plan and action #

Original assumption

Revised plan

Comments

1

Retaining-wall construction and 3-track removal and repositioning sequence.

2

Retaining-wall construction piling technique to use a rail track-based rig.

Re-sequence the works to allow for full access 24/7 by managing the train scheduling and bus-replacement service. Retaining-wall construction piling technique to use a Giken piling rig positioned at the corridor boundary.

3

Shut down of rail for work undertaken during summer January/ February holiday period.

Shut down in June/July winter months, less wind, greater disruption for shorter period.

4

Excavate trench, build road bridge.

Build road bridge first at grade level then excavate beneath it.

By working with the train operator within the alliance a workable solution was found through designing-in a strategic works method plan. Changing to a different sheetpiling system operating differently to that original planned – through innovative work methods. Designing-in flexibility in approaches to amend plans with appropriate governance through the AMT and ALT. Making the single shutdown phasing intensive one-off and 24/7 work pace. End–means flexibility was designed-in through integration of the operators’ full team within the alliance team. Allowing re-sequencing so that excavation corridor work could ‘flow’ more effectively. End–means flexibility was designed-in through integration of the operators’ full team within the alliance team.

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Assumption 1 above was revised because the alliance included the rail operator. This designing-in of this expertise availability for the rail and road operator to contribute to a dialogue that effectively worked through a series of ‘what if’ scenarios, provided more clarity about what was acceptable to the rail operator and its legal obligations to service the train passengers and maintain safety for all its employees as well as the construction crews. Assumption 2 was similarly facilitated by access to the in-depth expertise of the rail operator to work with the designer and contractor alliance participants to think through how the Giken piling system could be used safely to reduce access congestion along the rail corridor works. Prior to the rethink it was considered feasible to use a traditional rail-track-mounted sheet-piling rig system. Assumption 3 was also facilitated by the inclusion of both rail and road operators in the alliance team and also by having a receptive OP. The impact of the changed closedown periods could be better modelled for rail passenger impact as well as traffic modelled for road users. This permitted a 24/7 dig approach and VicRoads as an NOP also helped because their on-site team members were able to work with the contractor and material (soil and concrete rubble, etc.) removal sub-contractors to optimise haulage routes and advise on what permits were needed. This intense, deep and effective collaboration between the alliance participants permitted and indeed encouraged innovative ideas to emerge and be tested, approved and acted upon. Assumption 4 demonstrates innovative thinking in terms of design and delivery of the road bridge works because of the integrated nature of the alliance team and shared goals for performance. By undertaking the bridge works at ground level it was possible to re-sequence the works with less disruption to traffic and to enable the ambitious excavation and retaining-wall works to proceed smoothly and on a 24/7 schedule. These are just four decisions of many that demonstrate how agility, resilience and innovation was enabled through designing the project-delivery system as an alliance so that IPD was achieved and its benefits realised. That cluster of innovation practices at the process (governance and contract conditions), behavioural (rewarding collaboration and knowledge and perspective sharing across disparate teams within the alliance as a united team) and technical level was only possible because of the DT that shaped the alliance contract.

Discussion This chapter posed the research question: How can IPD as a project procurement approach be envisaged as a designed approach that facilitates creative thinking and problem solving? As noted in our introduction, Carlgren et al. developed theme codes to identify characteristics of DT that fitted into a five-step process (user focus, problem framing, visualisation, experimentation and diversity) that they expand their description about these to comment on mindsets, practices and techniques (2016, p50). Following their methodology we present a summary of this chapter to answer the research question. Table 8.4 provides a summary of how DT was demonstrated in the case study example. The Carlgren et al. themes and mindsets (2016, p50) are used to illustrate the way that DT was undertaken on the LXRP with comments on how they link to the Collaboration Framework elements. The above discussion explains how DT was enacted through team integration and close team collaboration. 163

•• Unconstrained thinking •• Comfortable with complexity and ambiguity •• Open to the unexpected

•• Thinking through doing •• Bias towards action

Problem framing

Visualisation

Experimentation •• Curious and creative and •• Playful and modelling humorous •• Optimistic and energetic •• Learning-oriented •• Eager to share Diversity •• Integrative thinking •• Open to differences in personality type and background •• Democratic spirit

DT is demonstrated through the united team having a common and shared vision of the project’s aims. Being located together with a common communication platform and design (BIM or other) model helps. Alliances have innovation as an explicit KRA. Collaboration Framework elements 5, 8 and 14 highlight an ethos of demanding innovation and continuous improvement. The joint communication tools facilitate collaboration through being able to experiment and model the impact of the project design-in a blame-free and respectful workplace.

Framework elements highlight the pro-active nature of the OP in an alliance. By leading and adopting an integrated and collaborative approach the OP is in a strong position to design the alliance agreement to meet KRAs that extend beyond the iron triangle traditional ones. It also allows behaviours to be designed-in as well as clear responsibilities and accountabilities. Relationships and accountabilities are re-framed and the problem focus shifted from compliance to commitment.

The continual search for value through continuous improvement, focus on best value and transparency in delivering fairness and commitment. The best-for-project mindset supports an empathic and authentic user focus. Incentives based on project outcomes focuses on a unified integrated team working for a common and shared positive stakeholder project outcome.

Comments and discussion on transformational DT outcomes

  6 – Authentic leadership The integration of the OP, design and delivery NOPs, together with   7 – Trust–control balance the operator(s)’ input provides a rich cross-discipline and cross10 – No-blame culture organisational perspective. Authentic leadership and consensus 11 – Consensus decision-making decision-making endorse that DT approach. 16 – Mutual dependence and accountability

  2 – Joint governance structure   6 – Authentic leadership   9 - Best-for-project 12 – Continuous improvement 13 - Incentivisation 15 – Transparency and open book   1 – Motivational context   2 – Joint governance structure   3 – Integrated risk mitigation   6 – Authentic leadership   7 – Trust–control balance 10 – No-blame culture 11 – Consensus decision-making 13 – Incentivisation 15 – Transparency and open-book accounting 16 – Mutual dependence and accountability   4 – Joint communication   5 – Substantial co-location   6 – Authentic leadership   8 – Commitment to innovation   9 - Best-for-project   4 – Joint communication   5 – Substantial co-location   8 – commitment to innovation 10 – No-blame culture 11 – Consensus decision-making 14 – Pragmatic learning-in-action

•• •• •• ••

User focus, operator and project owner stakeholders

Empathic Curious Non-judgemental Social

Collaboration Framework elements

Principles/Mindsets

Themes

Table 8.4  DT as IPD Strategy

The role of IPD in facilitating design

Conclusions This chapter illustrates how integration and collaboration would occur on IPD projects both in theory and in practice. Throughout the chapter we drew links to illustrate how DT forms a base assumption across many chapters in this book. We also explained how DT may be used to better understand the why and how questions relating to the way that the Collaborative Framework, introduced in Chapter 2 (with supporting chapters that explain the foundational elements of the framework in Chapter 9, the behavioural elements in Chapter 15 and processes and means elements in Chapter 21) works in practice. We began the chapter by explaining DT and showing how it was particularly relevant for complex and chaotic projects. We introduced and explained fundamental concepts that need to be understood in order that DT in an IPD context is relevant. More specifically we focussed on creativity, intuition, and improvisational aspects of a DT outcome. We also highlighted the knowledge, skills, attributes and experience of IPD team members that are relevant to DT in delivering highly complicated, complex and chaotic project situations. Finally, we then discussed an alliance project case study to illustrate key aspects to this chapter and the case study is referred to in numerous other chapters in this book so that readers may be familiar with its details to better understand the different contexts and perspectives discussed in the various chapters.

Note 1 PMI presentation online at: www.melbourne.pmi.org.au/Documents/Managing%20Projects%20 PMI%2028March%202017.pdf.

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9 FOUNDATIONAL ELEMENTS OF THE IPD COLLABORATION FRAMEWORK Derek H. T. Walker and Beverley Lloyd-Walker

Introduction Chapter 2 presented an overview of the Collaboration Framework in broad terms. Three components of the Collaboration Framework were illustrated in Figure 2.2, comprising platform facilities, behaviours and processes, routines and means together with the 16 elements of the framework (Walker and Lloyd-Walker, 2015). This chapter is focussed on the first component of the framework and is composed of five elements, each with several sub-elements. The framework was developed from a rigorous study that analysed data from 50 interviews with integrated project delivery (IPD) subject-matter experts. Over 600 pages of transcripts were analysed using a grounded theory technique to identify themes and sub-themes to explain the phenomenon and characteristics of alliancing and IPD. A broad picture emerged of three components or overarching themes and each of these was further analysed to reveal further sub-themes that we classified as elements. Deeper analysis revealed sub-elements. Walker and Lloyd-Walker (2015) provide details on the research approach and its validation. A key finding and outcome of the research was the development of the relationship-based project-procurement taxonomy. That term, when workshopped and presented to numerous industry practitioners, led to confusion, with people being unsure whether the term was best understood as a taxonomy, model or framework. We later decided that it would be more comprehensible if described as a framework and we have been referring to it since 2017 as the Collaboration Framework. In essence, we argued from our analysis of the study’s data that effective collaboration in IPD projects is dependent on the complementary interaction of three components. Figure 9.1 illustrates this concept together with the focus for this chapter. The first component is termed Platform Foundational Facilities. This is referred to as ‘platform’ and ‘foundational’ because this component forms a set of ‘facilities’ as a basis for collaboration. We categorised these as the things that you must have to begin to contemplate effective collaboration and then facilitate it. Without this component it would be very difficult to assemble the mechanisms and means to effectively work together and collaborate as a united team. However, this component requires additional supporting mechanisms to allow collaboration to occur. The second ingredient required for collaboration is the set of behavioural factors that are supported by the foundational support facility mechanisms. People must behave in a particular manner that encourages reciprocity to enable collaboration. It requires a specific style of 168

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The project outcome achieving KRAs through IPD collaboration

The focus of this chapter

Processes, routines and means – drivers as PM enacted practice

Behavioural factors – drivers as normative practices

Platform foundational facilities [email protected]

2

Figure 9.1  The Collaboration Framework concept

leadership and followership and a mindset that perceives value in collaboration. Good intentions and supportive behaviour towards collaboration are unlikely to flourish and be sustainable without the requisite foundational platform facilities being in place. Behavioural practices set norms and a particular culture that may be supportive of, or inhibit, collaboration. A good analogy of this situation is the intention to participate in a partnering arrangement. People may have good intentions but they need certain basic requirements to facilitate partnering. However, effective deep collaboration requires more that good intentions supported by technology or convenient co-location. The third component is vital for intense collaboration and desirable for more loose intensions to partner. This component is described as the processes, routines and means for collaboration. These provide a binding mechanism to support collaborative behaviours by the way collaboration is operationalised. These processes, routines and means also are dependent on a supporting facilities platform to underpin intent and translate it into action. Chapter 2 discusses the theoretical basis for Figure 9.1 in more depth. Briefly, the Collaboration Framework is theoretically based on ideas put forward by Nyström (2005) when he was developing a framework to understand partnering and how it is encouraged or inhibited. He argues that the Wittgenstein family-resemblance concept could be adapted for this purpose. Wittgenstein was a philosopher and developed a way of classifying similar things (objects, themes of ideas, etc.) by their apparent resemblance into family groups, essentially creating a taxonomy. This idea was adopted by Yeung, Chan and Chan for example (2007) in identifying alliancing characteristics. The idea of the three components of platform derives from Jacobsson and Roth (2014). They propose a foundations, factors and means perspective in a study on construction-industry partnering and how it may be understood to function. They argued that there needs to be some foundation for partnering, that various factors influenced how well it may be implemented and that there were specific means and routines that facilitated partnering. This concept of three interlocking components led us to view the 16 elements illustrated in Figure 9.1 from that perspective. 169

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In Chapter 2 of this book we refer to institutional theory and its ‘three pillar’ concept proposed by Scott (2014). He considered institutions in a broader sense, such as the institution of government, the legal system, health system or a university. We argue that this institutional concept may apply to any organisation and so a project or program of project work may be considered as an institution. Scott (2014) identifies a regulative framework pillar that sets foundational rules and a basis for decision-making and action. There are also various norms or normative acceptable behaviours that are generally adhered to within an organisational group. These may be independent of the regulative framework and act as a second ‘pillar’ to support an institution. People interpret the rules, based on their norms, and Scott refers to this as the cultural-cognitive ‘pillar’. The interaction of these three pillars explains how institutions are formed, maintained, modified or disbanded. Figure 9.1 may be viewed from this institutional-theory perspective where the Platform Foundational Facilities provide a regulative platform that shapes what is possible in terms of decisions and actions. The normative pillar could be seen as the culture and mindset that shapes behaviours and this shaping in turn is influenced and directed through the processes, routines and means that comprise this third component. The institutional-theory perspective supports our analysis of the themes and sub-themes as does the Jacobsson and Roth (2014) perspective. The purpose of this chapter is to provide more detailed discussion and explanation of the five elements comprising the first component, the foundational component, together with subelements that were identified from that research work. Chapter 15 provides details of componenttwo elements and sub-elements and Chapter 21 does so for component three. We will now explain each of the elements and sub-elements and how they fit with theory and we also provide empirical evidence in quotes from those we have interviewed to illuminate our argument. The elements and sub-elements are illustrated in Figure 9.2. At the end of each section we provide a rating for a particular research project underway at the time of writing this chapter, based on recorded and transcribed interviews with five senior alliance-team managers who were members of the alliance management team (AMT) or alliance leadership team (ALT).

Best value Emergency recovery Experimental Competitive resource availability environment Relational rationale Known risks Unknown risks

1 – Motivation and context Defining the collaborative circumstances

Platform Foundational Facilities

2 – Joint Governance structure

Governance process Governance structure Governance best value strategy through KRAs and KPIs

3 – Integrated risk mitigation strategy

Risk sharing conversations Risk sharing mitigation actions System integration

4 – Joint communication strategy

Common processes and systems Integrated communication platform

5 – Substantial co-location

Hierarchal integration mechanisms Physical co-location

Figure 9.2  Platform foundational facilities

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Element 1 – motivation and context Table 1.1 in Chapter 1 of this book outlines the reason why alliancing would be an appropriate project-delivery form. The context of a project may have significant impact on the motivation to choose an alliancing form. When we undertook a number of alliancing research projects over past years we observed that alliance motivation may be triggered by one very strong reason or by a combination of reasons, either due to collectively strong reasons or because of one dominant reason. This element is foundational because there must be a defining rationale for alliancing. The process has considerable overhead attached to it, for example probity measures. These entail a suitably qualified client-external organisation being commissioned to ensure that: IPD-alliance work processes comply with all legal and statutory requirements; all parties conduct themselves in a fair and just manner; confidentiality is maintained; and the project is delivered on a best-value basis. The alliance process also entails commissioning independent cost advisers who provide credible and expert cost-checking estimates to ensure that the target outturn cost (TOC) is reasonable and defensible. However, the decision to deliver a project through alliancing is not purely cost-driven. The criterion for rating this element (1 to 5), according to Walker and Lloyd-Walker (2015, p158) is:

Low levels would be related to a hostile environment for collaboration. This may be due to lack of conviction of project participants in the value of collaboration within this project’s context. High levels would relate to the procurement-choice solution being driven by the acceptance of project participants in the logic of a clear advantage being gained by adopting a focus on a supportive and collaborative approach to delivering benefits that align with the values of participants.

This element comprises seven sub-elements: best value; emergency recovery; experimental; competitive resource-availability environment; relational rationale; known risks; and unknown risks.

Best value Walker and Lloyd-Walker (2015, p167) identify examples of best-value thinking as: understanding that traditionally, bid price/time/quality often creeps into quite a different final cost/ time/quality outcome; understanding that output and outcome are also often loosely linked; and understanding that defining the meaning of value within a context of multiple valid stakeholder interests requires considerable sophistication and wisdom from all alliance-team members collaborating in a constructive dialogue to explore what each party values and what drives their value proposition. We deliberately use the term best value (BV) rather than value for money (VfM). VfM has the disadvantage of appearing to assume that money is the common (and often only) denominator and most important outcome whereas value and not lowest cost is the key concept. Socially oriented project-owner organisations tend to see value, and hence BV, in terms of a balance of tangible amenity or facilities that have an active purpose combined with an intangible form of value. There is a program of work being undertaken in Melbourne at the time of writing for the removal of 50 level crossings, the Level Crossing Removal Program (LXRP). This program of work is expected to deliver multiple layers of value. Firstly, and more tangibly, it is 171

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aimed to provide grade separation, between trains and traffic (pedestrian as well as vehicular), in a cost-effective manner. Rail lines may be relocated to remove the level crossing in a belowroad-grade-level trench with a bridge over the track or as a ‘sky-train’ stretch of rail line elevated above the former track. Secondly, the LXRP is expected to deliver value in terms of safety (deaths and accidents); travel amenity (quicker drive journeys due to freeing up a current bottleneck at the rail crossing as well as improving the rail network efficiency by trains not needing to slow when approaching a rail crossing); community amenity (freeing up space for recreational and parkland-use by replacing surface-laid rail tracks to be built as an elevated sky-rail system); and a range of other intangible benefits (Victorian State Government, 2017a). The Victorian State Government’s business case identifies its coordinated program-management delivery approach (as opposed to single projects) for the works as delivering best value (2017a, p88). The business case stresses the need for best-value delivery through a coordinated and integrated holistic approach to project delivery. The identification of potential value, both an easily quantified tangible output and more difficult-to-measure intangible outputs and outcomes, adds a layer of complexity to the question of what exactly does best value mean in practice. Clearly for the Level Crossing Removal Authority (LXRA), based on the business case (Victorian State Government, 2017a) and a subsequent government audit part-way into the program (Victorian Auditor-General’s Office, 2017), the IPD-alliancing approach was believed to deliver best value and this was one part of the rationale for choosing an alliance delivery approach.

Emergency recovery Walker and Lloyd-Walker (2015, p167) identify examples of emergency-recovery thinking as: understanding the scope, scale and resource implications for the project recovery team; understanding the contextual risk, ambiguity and uncertainty in disaster recovery; and coping with political, social and stakeholder issues that will impact the way that the project should proceed. In situations where an emergency has arisen and repairs and restitution need to be instituted as soon as possible, an integrated team needs to be put in place to respond to the emergency without delay (Waugh and Streib, 2006; Wearne and White-Hunt, 2014). In this situation for infrastructure or building recovery projects, an alliance of project owner, design team and delivery team is considered to be an effective approach. There is no time to prepare a design, tender the project for bidding and then mobilising a project-delivery contractor. The project owner most likely has the best knowledge of the recovery requirements to be able to cope with the emergency. The design team would need to take an emergent design approach because the emergency situation most likely leads to a lot of unknowns about what needs to be done and how to prioritise recovery actions. The delivery team needs to have the flexibility of action to avoid being constrained with a detailed contract scope of work and have the resilience and responsiveness to rapidly cope with complexity and chaos. Snowden (Kurtz and Snowden, 2003; Snowden and Boone, 2007) takes a systems-thinking perspective and characterises domains or contexts as being ordered or unordered. Ordered domains are predictable and follow patterns and rules; therefore, the situation presents known knowns for simple or obvious situations and known unknowns for more complex situations. Ordered domain-system problems are best responded to using traditional science and engineeringbased theory and practice. Unordered domain-system problems present a different appropriate response because they do not follow any set knowable patterns. Complex situations present unknown unknowns and any pattern of symptoms and likely causes that may be detected

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emerge and need to be interpreted to determine an appropriate response. Often the appropriate action for this class of problem is to probe, sense and respond. Probing is accomplished through a controlled experiment of action based on a hypothesised best-guess basis, monitored closely for emerging patterns and taking action based on incomplete information to steer towards a solution by amplifying the intervention, dampening it, or trying a different probing action. In chaotic situations where there are no emerging patterns to make a best-guess hypothesis, taking an action that seems to feasibly address the problem is appropriate, followed by rapidly sensing the outcome and then responding to that outcome and trying to steer the situation out of the chaotic zone. Emergency-recovery situations are frequently chaotic or complex and rarely simple, obvious or merely complicated. The only feasible way to rapidly deploy a team to address an emergency-recovery situation is to form an IPD team. This may be done as suggested by Wearne and White-Hunt (2014) by having already procured such an IPD team, pre-emergency, through a framework agreement, perhaps. The ideal is to have an emergency-recovery team ready to rapidly respond. They would have been selected and commissioned prior to the emergency situation; perhaps they have had intensive training as an integrated team in responding to various potential emergency situations and would have an up-front agreed contract with conditions framed in general terms. These conditions may include: cost-reimbursable rates; exclusions and administration approaches and methods; action authority levels; means of coordination; levels of collaboration that allow flexibility and good faith in reconciling costs; and post-recovery dispute-resolution principles. They are ready to tackle the situation faced as a united team with a best-for-project-outcome mindset when freed from concerns about contractual conditions. This allows them to be resilient and instantly responsive to dynamic changes.

Experimental Walker and Lloyd-Walker (2015, p168) identify examples of experimental thinking as: understanding the intellectual and resource demands placed upon the project team in developing a project-delivery strategy; understanding and managing risk, ambiguity and uncertainty inherent with a novel venture; and effectively harvesting knowledge gained from stakeholder feedback to ensure successful completion or, if necessary, abandonment of the experiment. Projects are sometimes triggered by the need for experimentation and undertaking demonstration projects or pilot studies. Brady and Davies (2004) refer to these as ‘vanguard’ projects. Their main purpose is co-learning and exploration. These may develop completely new products, assemblies, systems or procedures delivered as stand-alone outcomes or as part of a learning curve to trial a production-line approach for new standard-type projects. The level of unknowns and unknowables means that an IPD team is needed, with high levels of trust in each other, the ability to effectively collaborate and a project-procurement approach that is highly flexible in how it may be delivered. An alliance or other IPD form may be ideal for this type of project because of the need for high levels of flexibility, the high level of project-owner involvement, as well as the importance of the ‘chemistry’ needed between team members. The Heathrow Terminal 5 project featured many examples of experimenting with off-site fabrication and simulations (Doherty, 2008) and the book by Fischer et al. (2017) also presents examples of similar experiments being enabled by IPD. Experimental projects, by their very nature, are almost impossible to scope. This poses a compelling case to adopt IPD for this type of project.

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Competitive resource-availability environment Walker and Lloyd-Walker (2015, p168) identify examples of competitive resource-impact thinking as understanding that the project purpose and context fits within the current and project delivery period’s economic and resource-availability context. By understanding and managing opportunities within the realities of the marketplace, IPD team members avoid behaving as either a victim or predator.. Public sector agencies and many large bureaucratic organisations often find themselves in a challenging situation in retaining staff during times of buoyant economic and business conditions, particularly in the construction and infrastructure delivery sector. This is mainly a result of their staff feeling that: they are missing out on the excitement of working on interesting, complex or cutting-edge projects in the private sector; their career may be becoming confined or constrained by a regimented bureaucratic organisation; or perhaps they may feel that they are being underpaid. This challenging situation may threaten to ‘hollow out’ organisational capabilities by talent: core skills with organisational knowledge being lost or significantly degraded by people leaving the organisation. This situation faces many government utility instrumentalities. One approach to strategically addressing this threat is to engage with the private sector in alliance projects. Several representatives of this type of organisation interviewed in a recent programalliance study (Walker and Harley, 2014) commented that competitive resource considerations motivated their organisations to engage in program alliances. OP (owner participants) and nonowner participants (NOP) respondents from across the team disciplines and roles interviewed from these organisation reported benefits from learning more about the nature of project work from integrated cross-discipline and cross-role perspectives. We observed that many organisations particularly valued the retention of key staff to maintain their current capabilities as an alliance outcome by embedding their staff in alliances where they were able to broaden their knowledge and skills through being part of an integrated collaborative team. Skill and knowledge acquisition also prepared staff to take on more responsible roles in their home-base organisation at a later date. It also had the benefit of exposing staff to practical on-site experiences where they learned to better understand the perspective of others. Project-owner staff who were previously acting as contract managers gained deeper insights into what designers and project-delivery participants actually do and how action, or lack of action, by the project-owner representative staff impacted teams and the project outcomes. There was significant cross-learning on program alliances both within projects and between projects in a program of work. In this situation the cost of organisational capabilities attrition from adopting a traditional project-delivery approach, and potential gains to be made by program alliancing, was seen as both significant and strategically important enough to tip the balance towards deciding on adopting an alliance form of project delivery. This was particularly relevant to program alliances because they were generally in excess of five years’ duration. A program-alliance approach can lock-in high performing teams across boom and bust cycles. Additionally, learning and development of staff knowledge, experience and general capability were seen as a significant alliance outcome.

Relational rationale Walker and Lloyd-Walker (2015, p169) identify examples of relational rational thinking as: understanding the causes for past positive or negative experience based on institutional drivers driven by the forms of project contract delivery; understanding and appreciating how trust 174

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and commitment can be shaped by the form of project-delivery procurement and behavioural requirements or habits based on specific project procurement forms; and understanding the big picture and how a more holistic approach to project delivery may improve the value delivered. The relational rationale for alliancing was found in the research data from our study (Walker and Lloyd-Walker, 2015) to be somewhat allied to the previous sub-element in terms of learning and professional development potential, but having distinctly different motivation bases. There was perceived the need to create, nurture and maintain a relationship between the client, design and project-delivery team members. We found that some choices may have been based upon negative past experiences and the need to overcome problems caused or at least exacerbated by a chosen project-procurement form. Several interviewees identified examples of a project-owner organisation having sensed a declining number, or quality, of responses to tenders by design and/or delivery organisations. This was attributed to market reluctance to deal with what may have been perceived as a ‘difficult’ client. This relational motivation to form an alliance was based on the project owner strategically deciding to use alliancing to build better-quality knowledge about the market and what its value proposition was and how the client organisation may better address that for future projects. Other choices were based on positive past experience with using alliancing and the value of maintaining and retaining positive and high-value project outcomes through IPD-alliancing relationships. On at least one program alliance, the advantage of upskilling local subcontractor practices through being engaged in alliance projects was seen as a sound justification for alliancing in ensuring more effective and efficient local employment in rural and regional areas (Walker and Harley, 2014). This was seen as delivering value from a social perspective as well as ensuring that productivity enhancement took place through continuous-improvement key result areas (KRAs) being an alliance objective.

Known risks Walker and Lloyd-Walker (2015, p169) identify examples of known-risk thinking as: understanding which party is best able to manage known known risks and who can identify known unknown risks with the expertise to successfully investigate and then manage these risks; understanding how to best compensate parties for taking responsibility and accountability for those risks; understanding how to frame effective risk-management processes through contractual arrangements and having the capacity to retain critical expertise within an organisation, or ensuring having access to that corporate and individual expertise. Snowden (Kurtz and Snowden, 2003; Snowden and Boone, 2007) developed the Cynefin Framework, describing situations in which inherent varying levels of knowledge about risks and uncertainty lead to the situational classification described in the emergency recovery sub-section above. Simple or obvious projects may generally have risks being managed through conventional business-as-usual (BAU) means. In construction-project-delivery terms, this means that the client can engage with a design organisation and develop a brief that leads to a design that may be effectively procured through traditional means, i.e. design-bid-build (DBB) or a design and construct (D&C) process. Complicated projects require more expert design input because a client and design organisation may have limited in-house expertise to understand knowable risks associated with complicated situations. They are aware of these risks but they are unable to identify or deal with them. External expert advice is required for this purpose, perhaps through specialised consulting or early contractor involvement (ECI) through providing constructability advice (Mosey, 2009; Scheepbouwer and Adam, 2011; Rahmani, 2016). 175

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Unknown unknown risk relates to project situations that may be considered complex. These may be discerned through understanding patterns, but the complexity means that cause-andeffect patterns constantly shift because of the many variable inputs. The unreliable nature of known patterns emerging from situations with limited knowledge of their context and likely causation calls for an experimental approach to managing these situations. This is where the IPD-alliancing approach becomes increasingly relevant because an alliance brings together the triad contextual perspective of owner, design team and delivery team. A chaotic situation related more unknown risks, which are discussed next. Alliances are therefore appropriate for situations to address complex risk situations where the IPD form provides multiple perspectives and insights, and expertise is directed at developing a best-forproject outcome. The LXRP was inherently a high-risk complex program of works because it related to works being undertaken on an operating rail line. The risk of injury to workers because of their proximity to electrified power lines and both train and road traffic hazards were intense, as interviewee LXRP-4 commented: if you remove the fact that we’re building something on the rail corridor which is a Rail Safety Act overlaid on it. If it was 30 metres away off the rail reservation they’d be D&Cs because the complexity and the risk profile of building it on or beside the railway is what tips the risk profile into an alliance, favours a procurement. That’s the reality.

Unknown risks Walker and Lloyd-Walker (2015, p169) identify examples of unknown-risk thinking as: understanding the value of collaboration to identify those who best contribute to managing unknown risks with the requisite expertise to successfully investigate and manage these kinds of risks; understanding how to best compensate parties for taking responsibility and accountability for these risks; understanding how to frame effective risk management through contractual arrangements; and having the capacity to retain critical expertise within an organisation, or ensuring having access to that corporate and individual expertise. Following the logic of the Cynefin Framework, the chaotic situation relates to unknowable unknowns. Unknowable risks may include possible unknown legacy issues, such as working on a ‘brownfield’ site in which there has been poorly documented past development over numerous decades. The interaction between highly dynamic systems may result in instability that can trigger chaotic outcomes or severe complexity where patterns of interaction may be unclear. These are situations in which the act > sense > respond process is recommended (Kurtz and Snowden, 2003, p468). This requires a sophisticated project leadership team in which the sensemaking component brings multiple and expert knowledge and experience to contribute to making sound decisions about how to respond. Alliance approaches to managing projects are relevant to complex and chaotic situations. The Victorian State Government Business Case Procurement Strategy Supporting Information Appendix I (2017b, 16) identifies alliancing as appropriate when: ‘Project options such as rail under road that are complex and not well defined, requiring innovative design solutions and flexibility during the design and delivery phases to vary the scope and requirements.’ This situation suggests many risks as being needed to be dealt with that involve unknown unknowns and unknowable unknowns. The evidence suggests that alliancing-type IPD projects are the only currently available forms of project organisation that facilitate an effective mechanism to response to unknown risks. 176

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Motivation and context sub-element summary The above seven sub-elements were developed from empirical data from 50 interviews and over 600 pages of transcript analysis. They illustrate a range of motivations to engage in IPD alliancing. One may take a rule-based approach and argue that alliancing is relevant to complex or chaotic situations to be managed; however, that would ignore other valid rationalisations. Best value appears logical but value is a contestable concept, so a lot depends on how value is perceived. It can be accepted that the ideal BAU approach to project-procurement efficient optimisation may be suspended for emergency-recovery situations because emergencies are dire situations that must be rapidly addressed by whatever means are ethically available. The competitive resourceavailability environment, especially the strategic need to retain core competence within organisations, leads to a logic for alliancing. The relational rationale also has merit because it is based on a long-term performance objective and how project-owner organisations need to not only initiate profitable and effective relationships with their supply chain but need to maintain and develop those relationships. IPD alliancing provides a useful vehicle for that purpose. In some respects, the LXRP is in part an experimental program. Each crossing is different, with different local contexts and stakeholder pressures, but the main experimental aspect is that the LXRA are very keen to learn and include innovation and diffusion outcomes as part of the project-delivery result. Finally, risk considerations, dealing with known unknown or unknowable risks, suggest that an alliancing-project delivery approach for complex or chaotic situations is appropriate. The previous quote from the interviewee LXRP-4 and from The Victorian State Government Business Case Procurement Strategy reinforces this view.

Rating the motivation and context element for projects The Collaboration Framework may be used as both a benchmarking and a health-check tool, as conceptually demonstrated in Chapter 2 of this book. Each of the 16 elements can be rated in terms of their position on a coarse-grained five-point (1 = low; 5 = high) scale that provides a useful visualisation of how collaborative a project has been. A fine-grained sub-element level rating may be feasible but may also prove more confusing than assessing it at a more coarse-grained level. It is for this reason that we decided to suggest heath-check analysis and benchmarking at the element- and not the sub-element level. To do so would have introduced complications around weighting sub-elements and the problems associated with comparing non-similar projects. This may be achievable in the future but we believe that this contribution is adequate to start a process of future possible refinement. The rating for the indicative alliance program is for the LXRP Package 1 alliance, comprising four level crossing removals that were all completed within the TOC time and cost. Using a scale of 1 = low to 5 = high for this alliance we considered the following project contextual issues. 1

2

The program sought a high best-value outcome that meets a competitive cost/time outcome but also scores highly on community-value generation and environmental value. There was also an outcome measure relating to effectiveness of improving the road traffic and rail network flow as well as stringent safety outcomes to eliminate road/rail collisions. This required heavy community involvement and stakeholder engagement between the project owner, design and delivery teams, as well as the rail operator, that was undertaken through the IPDalliance mechanism as the only feasible option. The first program-alliance work package was seen somewhat as an experiment to refine the approach for the removal of another 46 level crossings across ten more alliance work packages. 177

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3

4

The incentive to collaborate and share knowledge was very high. One key results area (KRA) was innovation diffusion between crossing-removal projects within the package and for lessons learned to be shared on subsequent crossing-removal alliance packages. There was a strong desire to establish and refine the relationships through this first package to enable the alliance syndicate to bid on others of the ten subsequent alliance packages (see Victorian State Government, 2017a, p15 for the list of alliance packages). The program of projects was considered to have very high risk associated with it, being a highly complex project undertaken in brownfield-site conditions with system-integration issues for road and rail traffic flow, critical safety issues at the project and general public interfaces both for road works but also for rail passengers.

Given the above, we rate this element at the maximum 5 points as being logical to rate the need and motivation for collaboration as very high.

Joint-governance structures This element measures the extent of each project-delivery participant team having a unified way to legitimise its actions through rules, standards and norms, values and coordination of organisationalroutine mechanisms, and the way that committees liaise and how hierarchy represents a unified or complimentary way of interacting. The key term in this element is joint, the way that the projectowner participant (OP) and the NOPs, such as the design team and the delivery team and the operator in an IPD-alliance arrangement share a common governance system. The criterion for rating this element, according to Walker and Lloyd-Walker (2015, p159) is:

Low levels would be related to a laissez-faire approach where each participating project team has established its own individual stand-alone project-governance standards. Little coherence in alignment of the whole project-delivery organisational processes and structure is evident, with few explicit expectations about what success looks like and how to define and measure it. High relates to an effectively structured, uniform, integrated and consistent set of performance standards that apply across and within the project-delivery teams. All participant organisations share a common understanding of how to organise for success and what constitutes valuable project output and outcome success

This element comprises three sub-elements: governance processes; governance structures; and the governance best-value strategy through KRAs and key performance indicators (KPIs).

Joint-governance processes Walker and Lloyd-Walker (2015, p171) identify examples of joint-governance process thinking as: understanding that formal rules set boundaries that influence how informal rules are implemented either to reinforce intended protocols or subvert them by avoiding perceived needless interference to efficiency or effectiveness; understanding that output and rules/processes are often closely linked through the culture that they invoke; understanding that processes and rules can impose unknown risks when used to address known risks through, e.g. communication and escalation protocols. 178

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Joint-governance processes comprise common assumptions and ways of working that are influenced by project-governance processes and rules embedded in the IPD-project alliance agreement (PAA). These will vary according to the project-procurement delivery form but help align project strategy, objectives and aims. Governance process rules inform the degree of integration and help to define expected behaviours. Joint adoption of common process rules and routines clarifies how people agree to relate and work with each other. Formal and informal governance arrangements lay down the bedrock for trust and integration of the OP and NOPs into sharing a united single-team mentality. This has a major impact on the resulting workplace culture because it sets the tone and expectations of the relationships between teams and individuals. The PAA provides a core joint and shared regulative framework ‘pillar’ as discussed earlier in relation to viewing the project/program as a temporary institution (Scott, 2014). The IPD form, and this is clearly evident in alliancing, uses the contractual agreement (PAA for alliancing) to help build common and shared norms such as a ‘best-for-project’ mindset and this shapes the second ‘normative pillar’. Sharing common governance arrangements that link the OP and NOPs helps people adapt and align their ‘cultural-cognitive pillar’ to the institution, thus developing and maintaining joint and common responses to challenges. For example, when differences in opinion about the best way of moving forward on any particular issue arise, common governance arrangements help them find a way to engage in dialogue to resolve any potential disputes. Similarly, common governance helps the united team to respond to unforeseen events, the unknown unknowns of complexity issues, because the OP and NOPs have a common means to adopt shared and common response strategies and tactics.

Joint-governance structure Walker and Lloyd-Walker (2015, p171) identify examples of joint-governance-structure thinking as: understanding that governance structure can be designed to provide communication, knowledge and authority links across project teams as well as across development phases; understanding that a structured way of integrating governance oversight committees defining accountability across project phases is a vital ingredient of deriving a coherent governance structure; and establishing and maintaining a common understanding of how the governance structure engages people across project teams to effectively communicate what is expected of them, who they are accountable to, and how each level of accountability should behave. The organisational structure and the way that authority and accountability is managed define the way people agree to interact and work with each other. Structures can be designed to be flexible, rigid or something in-between these end points. Of key relevance to this element is that structures are integrated into a joint approach. Thus, there is little doubt about what should be done and can be done in response to emerging risks and uncertainties. There is also clarity about dealing with more routine situations such as engaging in a dispute-resolution process or developing a coordinated and integrated work plan. Chapter 19 and Chapter 26 in this book discuss IPD-governance aspects in more detail. Two structural governance arrangements are briefly described below. The alliance management team (AMT) is a particular governance arrangement adapted from a common arrangement for most BAU projects. Most BAU projects have a liaison coordination mechanism that draws together the main contractor and its sub-contracted and supplier partner supply chain. This is known in the construction-industry sector under a range of names, e.g. project integration group or simply site coordination meeting group. The aim is to have a forum in which activities can be discussed by the separate contractor and supply chain teams, including design team representatives. Project plans and progress are reviewed to resolve any coordination 179

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issues affecting several or many of this group who may need to take part in discussions and decisions to resolve any emerging or existing problems. There is a distinct difference between this kind of BAU governance arrangement, in which all members of that group represent their separate organisational interests and concerns, and the AMT which has a best-for-project unified position. The AMT provides a vehicle to align objectives and action, discuss impact and to communicate a unified resolution to challenges and problems. There is also another major difference between an AMT and a project coordination and management group working on traditional projects. This is the composition and role played by participants. First the AMT comprises the OP and representatives of all NOPs that include the design team, the delivery team and also the operator team. Discussion is centred on KRA and KPI-delivery progress. Various AMT members take ownership of a KPI to discuss coordinated joint alliance-team performance using the KPI as a reference point rather that each separate NOP being responsible for ‘their part’ of the KPI. This makes the AMT a strong governance structure from a unification and integration perspective because its tone and practice is all about joint and coordinated performance and how that may be enabled and facilitated. The integration of the project’s operator is also significant in that it helps to ensure that the project outcome is sustainable and viable in delivering the service and benefit that the project was intended to deliver. By sharing responsibility and accountability for KPIs, the aim of the AMT is to steer the project direction towards its stated goal rather than to control individual contributors’ performance. Thus coordinated joint decision-making and action is possible. The alliance leadership team (ALT) provides a second alliances-governance structure that facilitates joint and coordinated decision-making and action at senior executive level. The ALT comprises a senior executive from each of the NOPs and the OP. These people link their individual organisation to the project and link all the wisdom, resources and relationship assets that these organisations possess to the project to help achieve a best-for-project outcome. They are specifically not on an ALT to protect their own interests but to ensure collaboration of NOPs and the OP in maintaining responsibility, responsiveness and project-outcome accountability. The ALT review progresses with the AMT representative who usually presents on KRAs’ progress based on the KPIs. Any issues that require high-level approval beyond the remit of the AMT is usually undertaken by the ALT. The ALT is also able to report back to their home-base organisations with added credibility when proposing plan changes or issues that may impact upon that home organisation. An effective ALT also mobilises its own professional and personal network links to not only the project OP and NOPs but other important external stakeholders. For example, in one alliancing study (Walker, 2016) interviewee S-16 explained how he had formed a localgovernment CEO group that represented municipalities along the route of a regional rail network major upgrade and extension. This group met regularly and on several occasions he was informed about planned municipal work, or planning approvals for work by others that might affect planned project progress. Alternative plans could then be made well before any ‘unforeseen’ events of this kind could impact the project. In explaining the ALT role of influencing stakeholders that might otherwise be ignored he said: my predecessor understood and led the approach, to ensure that we’re all aligned. We just had a strategy that you have to have partners all the way through the organisation from the project engineers, to the project managers, to the construction managers, to the ALT, or to the CEOs. You need to be lined up and you need to commit the time. And it might be, you know, early days, just a few visits to update them on the project

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and see what you can do for them and what they can do for you and then the journey begins. And the more they come on the journey with you and understand what you’re about and you build that trust in the relationship, the easier and quicker it is then to cut through when there’s an issue. To be able to get on the phone and talk from a position of common understanding, you can get a very quick, efficient response because they know the project, they know what you’re trying to do, and they trust that you are actually wanting to do the right thing because you have been communicating with them. Then you really do get that buy-in. The quote illustrates the depth of contact and linkage that the project may have through its ALT in particular, externally, but also with the AMT internally, with stakeholders.

Governance best-value strategy through KRAs and KPIs Walker and Lloyd-Walker (2015, p172) identify examples of governance best-value-delivery strategy thinking as: understanding the link between being clear about what success looks like and how it can be defined and measured; understanding how to effectively use performance standards to achieve expectations, including how they may be used in any incentivisation strategy; and establishing and maintaining common understanding of how KRAs guide development of KPIs that promote and facilitate common understanding across project teams of what benefits the project should achieve The above discussion of governance structure mentioned KRAs and KPIs. Chapter 19 and Chapter 26 discuss the role of KRAs and KPIs in depth and so we do not propose to repeat that discussion here. We do briefly explain, however, what a KRAs and KPIs are and how they are developed. This brief discussion is framed to illustrate how this is done in an integrated and collaborative manner. A KRA communicates the key result area that links to a specific project deliverable and strategic aim. For example, the LXRP business case specifically states that it has a [rail] corridorbased approach to facilitate ‘The ability to apply innovation to the design and construction across the broader corridor’ (Victorian State Government, 2017a, p253). Thus, innovation is strategically diffused across projects within and between alliance packages. A KRA was designed to reinforce this strategic aim, defining innovation diffusion within the alliance agreement. It was developed to measure performance in innovation diffusion to incentivise not only demonstrated Package 1 alliance innovation-diffusion gains (through the KPI) performance from one project within its program of work to another project but also to benefit from evidence that other packages in the LXRP were adopting and adapting the innovation. This provides an example of how KRAs and KPIs may be used in alliances. KPIs are shaped and improved upon by the AMT and subsequently approved by the ALT to ensure that the ‘bar is set progressively higher’ rather than being lowered to make incentive rewards easier to achieve. The OP is part of these governance arrangements and is an active participant to ensure that KRAs are addressed and that KPIs are meaningful measures to provide effective, and not just convenient, means to incentivise performance.

Rating the joint-governance structure element for projects The indicative rating for the LXRP Package 1 alliance for this element is rated at 5: very high. The evidence that leads us to this rating assessment follows.

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1 The PAA has clearly outlined high levels of joint-governance arrangements so that our interviews and investigation support rating it at level 5. 2 The governance structure of AMT and ALT also appeared to operate effectively at that high level. There was positive and healthy supportive interaction between the AMT and ALT to allow effective alliance-internal joint governance. 3 The KRAs and KPIs were considered effective and appropriate and were used to monitor and communicate progress and the achieved performance level.

Integrated risk-mitigation strategy This element defines how common assumptions will be incorporated into the projectprocurement form and how parties will deal with risk. Three sub-elements were identified and are described in more detail here. The criterion for rating this element, according to Walker and Lloyd-Walker (2015, p159) is:

Low levels would be characterised by an immature and confused individual firm-specific riskmanagement approach and poorly defined systemic approaches to deal with uncertainty and ambiguity. High levels would be represented by consistent and integrated risk-assessment processes being identified, assessed and mitigated against a project-wide and broader systems-wide impact for the project or network in the case of programmes of projects.

This element comprises three sub-elements: risk-sharing conversation; risk-sharing mitigation actions; and system integration.

Risk-sharing conversation Walker and Lloyd-Walker (2015, p173) identify examples of risk-sharing conversation thinking: understanding each party’s risk-taking appetite and ability, including the OP; understanding the perspective of various project parties’ appetite for, and position on, risk and uncertainty accountability and their strengths and limitations in articulating their position and engaging in conversation and negotiation risk-mitigation strategies; and understanding how to discuss and develop systemic processes and protocols that can be used to address known and unknown risks. Responsibility and accountability protocols have to be decided upon for any project. The nature and quality of the conversation in terms of understanding each party’s perspective and respecting each party’s obligations provides a defining basis for a specific project-procurement form. A conversation and the level of understanding of each party’s perspective and risk appetite are reflected by the assumptions made. Information and power asymmetry have considerable impact on the validity, and acceptance, of assumptions and conclusions in any conversation. Risks may be known and openly discussed but uncertainty and ambiguity require high-quality collaboration for sense-making to be able to tease out nuances of meaning and potential impact in complex situations where patterns of action may be opaque. A broad conversation about both known and unknown risk needs to be undertaken to plan for their mitigation. In alliancing, risk mitigation is shared and so there needs to be consensus on identifying the nature and scale of the risk, the mitigation strategy and also on the means and resources required 182

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to take appropriate action. Each alliance participant needs to openly discuss their concerns and, through dialogue, agree on a course of action that each participant is comfortable with and willing to accept and support. This is because all parties share the consequences of their joint actions. As one of our interviewees expressed this (LXRA-4): The challenge that [operator X] has . . . with the Rail Safety Act caught up in a court of law when we’ve hurt someone or even killed someone. Under the Rail Safety Act the powers are very strong. And while there’s a tier one principle contracting model, the rail operator will always end up in front of the guy with the curly wig. Fact. That’s just a fact. This blunt and very clear statement illustrates that for the operator in this alliance there was no question about the boundary of their risk appetite. This is a very useful quote because it illustrates how all parties in that alliance knew that all plans and actions had to meet the interpretation of safety as laid out in the Rail Safety Act. This did not impose a negative barrier to the project-risk strategy but provided a clear and well-understood boundary condition that would help shape risk identification, mitigation and construction planning to take mitigation action.

Risk-sharing mitigation actions Walker and Lloyd-Walker (2015, p174) identify examples of risk-mitigation thinking: understanding the contextual opportunities and threats posed by the governance system; ability to anticipate and prepare for necessary negotiations including understanding the value proposition of all affected parties; and being able to visualise and conceptualise innovative solutions to systemic and administrative barriers that may impede optimal risk-mitigation solutions that have been identified and agreed upon to implement. Taking action to mitigate known and unknown risk involves a process of moving from conversation to action after having taken all necessary preparation steps to obtain political and procedural permission to take the action that was decided upon. A good example of this is illustrated by an operator NOP representative interviewed in a recent research study (Walker et al., 2018). Interviewee LXR-4 explained how after considerable discussion between the OP and NOPs that an alternative approach to undertaking support piling works could allow the project to be completed substantially more quickly. It did have safety implications to the travelling public but the alliance team had thoroughly investigated how the work could proceed with no foreseeable significant danger or safety issues. As discussed in the previous sub-section quote, the rail operator is governed by the Rail Safety Act and this places a firm boundary on that organisation’s risk appetite. However, both the rail operator’s AMT member and their ALT member were embedded within the alliance team and fully understood the risk and its mitigation context and having been positively engaged in the risk-sharing conversation were convinced that the proposed innovation was safe, more efficient and effective and that it should be supported. They were able to convince the rail operator’s senior management board that the proposal and the risk acceptance were indeed justified. This was approved by the rail operator’s board and the proposal adopted. It proved successful and now is common practice on other alliance packages. The deep engagement of the operator’s staff in the AMT and ALT provided credibility and assurance that all aspects of the operator’s legal obligation to uphold legislation protecting the public and bestowing responsibility and accountability for safety with the rail operator. Deep engagement of these AMT and ALT members in the project allowed them to fully understand cross-disciplinary issues and other technical aspects so that they were able to 183

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present a cogent, compelling and highly considered proposal that was accepted. This example of a joint-governance AMT and ALT structure illustrates how it facilitated discussing risk and uncertainty about the proposed innovation. The result was adoption of an innovation outcome that most likely would not have otherwise occurred.

Risk-mitigation strategy and system integration Walker and Lloyd-Walker (2015, p175) identify examples of risk strategy and system thinking: understanding the contextual participant project-internal interaction within a projectexternal world; ability to source the necessary resources to explore and map the systems terrain; being able to understand how to influence, facilitate and improve integration of systems that pose risk and uncertainty challenges through providing a common platform of project-system risk interaction. Projects are subject to risk associated with the environment, economic or political events and many other systemic factors. The OP and all NOP participants operate within their own organisational risk-management systems. Risk, uncertainty and ambiguity present challenges in understanding the dynamic manner in which systems interact. The level of system-integration knowledge and coping mechanisms can be highly influenced by the project-procurement form. For example, having the OP and NOP teams operate as a united team facilitates greater understanding of the risks and how they may be mitigated. This facilitation is due to the platform of a united team structure, in which all participants can exchange views of what may appear as a risk and their ability to place the risk and any proposed mitigation strategy within the context of the greater united team, and resources it can reach out to from overlapping parts of its system. The capacity for alliance members’ collective system thinking about risks and how they may be mitigated, and even how they may prompt an unforeseen opportunity, is a powerful attribute of alliancing. This often prompts innovation that opens up opportunities for radical rethinking. The power of marshalling multiple perspectives to help understand and deal with complex situations was discussed earlier but it is worth thinking of this sub-element in Cynefin Framework terms. Traditional project-delivery forms may have a design consultant and project owner discussing what the owner wants and needs and what risks and uncertainties they can identify and seek advice about. This works well for simple and complicated projects because, as Snowden explains using the Cynefin Framework (Kurtz and Snowden, 2003; Snowden and Boone, 2007), these risks relate mainly to known knowns and known unknowns and knowable unknowns. What becomes challenging in terms of complex and chaotic project situations is that these projects have many unknown and unknowable unknowns that often unexpectedly emerge. This is where it is useful to access systems thinking from a broad range of perspectives with parties who have knowledge of their overlapping systems with the wider environment. This enables a clearer view of interacting and dynamic systems. Examples discussed above illustrate how useful it is to have the operator’s perspective on risk aspects. Similarly, the OP and designer NOP do not have easy access to the overlapping systems of the delivery NOP with their supply chain and what issues may arise and how they may be managed, unless they are engaged in a wellfunctioning effective alliance. To illustrate this we refer to an interview with LXRP-1 on a recent research project (Walker et al., 2018). This illustration highlights how the risk-management system is integrated into the stakeholder-engagement system. It thus shows how multiple project-management system components are integrated, as well as multiple team participant groups. 184

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We’re going to start planning our future occupations in here, so when we go and talk to a stakeholder we say, ‘Okay, let’s push the button and we’ll see what happens on day one and day two’. That’s already paying dividends, particularly with talking to stakeholders, so you can go and show stakeholders where this service is in the ground, ‘Here’s where the piles are going to be, here’s where we set up our piling rig, here’s where the concrete is going to arrive’, and it gives them a bit of comfort that their service is going to be protected. As we see from this quote, various team members have their own competencies and overlapping systems knowledge and so it requires a systems-integration perspective to draw all this knowledge together to examine risks and opportunities and to identify what may be done. This is a collaborative process and, for complex projects in particular, best undertaken by an integrated team with high levels of understanding of as many dynamic overlapping systems as possible to ensure that there are as few unknown unknowns as possible because the system integration IPDunited team can turn many of these unknown unknowns into knowable unknowns.

Rating the integrated risk-mitigation strategy element The indicative rating for the LXRP Package 1 alliance for this element is rated at 4.5: between high and very high. The evidence that demonstrates this rating’s assessment follows. 1 2

3

We see clear evidence of all OP and NOPs engaged in dialogue about risk and risk boundaries, particularly from the operator NOP. Turning risk-sharing conversations into risk-mitigation action has been demonstrated on that program in a number of ways. One example we cite provides evidence of the innovation that saved considerable time and money and how that was achieved through facilitation by the rail operator being embedded in the governance structure. This meant they were able to credibly report back to the rail operator’s home base about a new piling technique that may have been considered too risky without having the AMT participant so involved in the alliance that he was able to fully comprehend the impact and riskiness of using that technology. This illustrates a high level of effectiveness of the governance structure and how it operated. It was clear from the LXRP interviews for Package 1 that there was considerable stakeholder engagement (see also Chapter 14 on stakeholder engagement), both from the internal supply chain as well as external stakeholders, to systematically explore their issues, and how this may raise risks and opportunities, and to try to transform as many of the unknown unknowns into knowable unknowns. This grew from a medium level for Alliance Package 1 to very high levels in later alliance packages.

Joint-communication strategy The purpose of communication is to be able to exchange world views at the macro level to develop strategies, and at the micro level to better understand the details of an issue for discussion and to work out how to implement plans into effective action. In a USA study of 564 chief project officers, Henderson (2008) concluded that a critical competency of project managers was the ability to decode and encode messages contained in communications to effectively understand and communicate concepts and potentially contentious issues: in other words, joint communication. Early research into communication effectiveness highlights the ability to make sense from data and information and transform that into meaningful knowledge-in-action. Messages are coded by 185

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a sender into words, gestures, images and other sensory mechanisms and these are decoded by the receiver (Argyris and Schön, 1978). While there has been much research and investigation into vital aspect of the behavioural side of communication for many decades, the focus for this jointcommunication element is on supportive technology and processes for seamless communication. The platform for sending and receiving messages may be seen from a hardware perspective: the equipment and facilities for communication, as well as from the software perspective. The software perspective may include systems and processes, culture and behaviours. There needs to be a joint-communication strategy with, platforms to support it, for teams to be truly integrated. The word joint is critical here. These platforms include ICT-groupwareapplication forms of communication and a common design software tool, such as building information modelling (BIM). We discuss BIM and other digital technologies in Chapter 16. A joint-communication strategy also needs integrated processes and ways of working and leading within a unified team. Other joint-communication platforms are realised through governance arrangements, such as coordination committees and collaborative group meeting structures. The criterion for rating this element, according to Walker and Lloyd-Walker (2015, p159) is:

Low levels of joint communication would be characterised by poor quality staff interaction, use of firm-specific rather than project-wide processes and ICT systems and weak cross-team mechanisms for gaining mutual understanding. High levels would be characterised by well-integrated processes that are well understood by all participants and advanced communication technologies being used that seamlessly connect all project parties within a particular procurement arrangement.

This element comprises two sub-elements: common processes and systems and integrated communication platform.

Common processes and systems Walker and Lloyd-Walker (2015, p176) identify examples of common communication process and systems thinking: understanding the advantages and disadvantages of using common processes and systems; ability to map system interoperability gaps and adapt internal systems or negotiate any justifiable and necessary compromises to share system facilities; understand national, regional and local legislative requirements that may impose a dilemma about how to conduct project business where the OP processes and system may conflict with project team participants’ legal, business or ethical obligations. People communicate more freely and effectively when they ‘speak the same language’ and see the world in similar and complementary ways. Project participants need to share a common way of working and a common language and communication approach to avoid misunderstandings that can undermine trust and commitment and consequently undermine effective decision-making and action. Bridges and interoperability between systems to cope with a lack of a ‘one system’ are also essential. The IPD-alliance agreement contains a number of behavioural and governance provisions and mechanisms to enhance collaboration and these are discussed in other elements in this chapter. The purpose of common maps and visualisations of the journey ahead, and common approaches to the work through common processes and operating procedures, is to

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coordinate unified action in order not to waste effort and energy. Interoperability is central to a common approach. Matinheikki et al. (2017) refer to institutional logics and report on a case study alliancing construction project in Finland. They conclude that participants within an alliance reshape and reconfigure their home-base logic to suit the united team’s agreed (usually through a PAA) protocol. By adapting the institutional logic in this way the government OP, operators and commercial NOPs, and the design and delivery team, were able to adapt and transform their usual operating systems to integrate with the project communication platforms.

Common communication platform Walker and Lloyd-Walker (2015, p177) identify examples of common communication platform thinking: understanding the advantages and disadvantages of common communication platforms and their system development and support demands; ability to map system interoperability gaps and being able to adapt internal communication systems or negotiate justifiable and necessary compromises in using the OP’s or leading NOPs’ common platform; understanding how to access system support to ensure the risk of system downtime is minimised; and comprehending and taking action on the necessary requirements for archiving information and data and operability issues associated with legacy data and systems. The LXRA, similar to most if not all alliances in Australia, has an alliance-wide communication protocol. The way that participants link into this is through interfaces, so that, for example, financial systems may be able to ‘talk to each other’. A common office communication system is established so that all emails, etc. bear the alliance-specific domain name. Everyone engaged in the alliance from participating organisations use the alliance portal access, emails, calendar and other office communication systems. The planning, design and monitoring and control processes all use the alliance common system. BIM is generally used with the exchange of drawings, often in PDF format for common document exchange with the BIM files being controlled by the alliance, often under the administration of the OP. This ensures consistency and an open and transparent communication system that the OP and NOPs can be assured is secure. This common communication approach also assists in developing and maintaining trust from the perspective of traceability of communications and communication paths, so that if there is any question about reliability, or when a particular communication event took place (such as sending an email or transferring a file), this can be tracked by the common system. We provide an example given by interviewee XLRP-1 from recent research into program alliancing (Walker et al., 2018) to illustrate how a design BIM model is being developed for an integrated approach to communicating planning, risk identification and rail operations management: ‘at [X] we’ve done point cloud surveys of the whole area, we’ve got a proper 3D model and we’re using that to plan our works now’. It is also being used to simulate the project ‘look and feel’ to operators of the finished project. XLRP-1 later explained another use of the 3D simulation model: The reason we’ve done this video, that’s a signal there, so we want to show the train drivers, ‘This is what it will look like just before this closure, can you still see the signal there? Are you happy with that?’ So, we’re building this all in 3D, fully offline, so you know how far your clearances are to all the power lines here.

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This illustrates how technologies that were mainly developed for one purpose (planning and risk management) can also be used for another group in the alliance (the operational NOP). In this example the software and dataset for the simulation application could be incorporated later into the rail operator’s training program and for a variety of their other training needs. In the LXRA alliance situation, a common joint-communication platform system application could then be passed onto the operator post-handover. This delivers an additional benefit outcome impact not fully appreciated at the business case stage of the project.

Rating the joint-communication strategy projects element The indicative rating for the LXRP Package 1 alliance for this element is rated at 4: high. The evidence that leads us to this rating assessment follows. 1 The PAA and its application for this project led to a consistent common communication strategy across the alliance participants. This resulted in dialogue taking place to better understand how each participating organisation could adapt their normal way of communicating on the program to suit the OP’s system that was developed for the project. The communication system was well integrated because the program team were pro-active and they considered themselves to be a united team. 2 There was evidence that the common communication system, hosted and paid for by the OP, enabled the united team to communicate as one team. For example the OP and NOPs shared an email domain name. Use of scanning technology on later projects within the Alliance Program Package 1 created a BIM that allowed 3D modelling and was available for the whole integrated team. 3 The use of technology was being used on an experimental basis and so it would be inaccurate to rate this element at 5 (the highest level) until the use of these communication devices and other devices could be considered as embedded and totally routine.

Substantial co-location Co-location is considered to be spatially sharing a physical facility or being virtually linked together and cognitively sharing the same level of power and information needed to make decisions and take effective action. Close proximity facilitates ad hoc and chance encounters to improve building relationships and facilitate common understanding. Substantial co-location supports integrated ways of working and leading within a unified team. The criterion for rating this element, according to Walker and Lloyd-Walker (2015, p160) is:

Low levels would be characterised by firm-specific policy determining that disparate teams are physically located in dispersed locations. There may also be a large visibility gap between project leaders and those at the ‘coal face’. High levels would be characterised by a project-wide policy that attempts to maximise participant co-location on-site where feasible, including the POR. There would also be high interaction between project leadership groups and the project management and physical delivery team members so that engagement enhances communication and mutual perspective taking

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Hierarchical co-location Walker and Lloyd-Walker (2015, p178) identify examples of hierarchical co-location thinking: understanding the need for publicising a common vision, aim and objectives for the project and taking action to ensure that all project participants experience ‘rhetoric’ that matches ‘reality’; openness of the project leadership team to accept the perspectives of others from lower levels in the hierarchy when visiting the worksite or meeting them in other venues; and understanding the advantages and disadvantages of encouraging an open and low-power-distance, lowinformation-asymmetry workplace culture to enhance hierarchical integration opportunities. One significant barrier to communication is access to information and knowledge due to high power imbalances. Power and information asymmetry between project organisational participants tends to be a consequence of a highly competitive workplace situation because each organisation tries to maintain their intellectual property and competitive edge by maintaining confidential information that may benefit others. This may be seen by many project workers as their fiduciary duty under contract law to first look after the interests of their organisation and its shareholders (Cullen and Hickman, 2012). Many individuals may also choose to maintain their own competitive edge through power and knowledge asymmetries. A fiduciary obligation or rationalisation of behaviours of legitimate concealment to maintain advantage is understandable within the context of highly competitive business transactions. However, as Lydenberg (2014) argues, taking action for mutual benefit above fiduciary selfinterest considerations, particularly when this involves ethical choices, is not only acceptable but rational. Other legal experts have supported the concepts of relational contracts for decades (Macneil, 1985). Under that contract form, best practice is assumed to foster collaboration rather than competition with lower power and information asymmetry between workers. Thus, benefits from dialogue and sharing information, knowledge and perspectives are critical to best understand complex situations. It is for this reason that a PAA is framed in such a way as to stress ‘we’ words rather than ‘you’ words as obligations. A foundational mindset of IPD alliancing is that knowledge and information is openly and freely shared to arrive at a best-for-project outcome. In Chapter 11 of this book on the knowledge, skills, attributes and experience (KSAEs) of alliance-team participants we explain concepts of shared leadership where those with the most suitable KSAEs relevant to a task take on a temporary leadership role to help steer the team towards its goal. Leadership is shared and transferred as and when required, with a team leader moving back from exercising positional power to allow others to exercise knowledge power (Lloyd-Walker and Walker, 2011). This results in what Müller et al. (2017) refer to as shared leadership. This requires the form of hierarchical co-location where power and information is located at the task level. An example of this shared leadership was given by participant LXRP-4 when discussing the rail operator’s role in the Alliance Package 1 research (Walker et al., 2018) and how it is involved with knowledge exchange in other alliance packages for that program. This demonstrates flat power and information cognitive co-location properties. The operator team and other NOP team members collaborated as an effective single-team entity: we’re getting really experienced for example site supervisors with great rail knowledge and risks around running big piling rigs beside the railway and we’re just injecting it into someone like say [Package X] who are fairly new to rail in Victoria. So we’re strategically with the client bolstering up with our capability resource tier ones that might require that bit of extra help or capability. 189

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Physical co-location Walker and Lloyd-Walker (2015, p178) identify examples of physical co-location thinking: teams from across the supply chain being located within a common campus that is comfortable, inviting and a suitable venue for collaboration; effective virtual locations in which people can assemble to discuss issues, problems and solutions using social media platforms to encourage hybrid means of co-location, enabling essential people not able to physically meet to join a virtual meeting. Physical location refers to the actual co-location of the OP and NOPs at or near the project worksite. The IPD projects in the United States of America (USA) refer to the ‘big room’ as the location where the entire team meet and are co-located. They are often in a rented space that is literally a big room with common use of communication technologies and pin-up spaces for photographs, images, communications and other joint facilities. The concept is explained by Fischer et al. (2017, p44) as an open office area where the design OP and entire delivery team, including sub-contractors, are engaged with planning and visualisations of the project, using BIM and other software. However, mostly the value from co-location is gained from face-to-face contact with high-level collaboration solving both longer-term strategy-planning problems with micro-process task issues and also building prototyping. They also provide a clear account of co-location and how intense integration of the teams leads to superior levels of task and strategy understanding. The account of the Heathrow Terminal 5 project that also had high levels of co-location of workers provided an example of IPD for that project and explained how this led to greater effectiveness of communication and integration (Doherty, 2008). Accounts of the application of the big room and Integrated Concurrent Engineering (ICE) approaches are not limited to large projects. For example, a medium-sized Finnish construction company, Fira, has been using these techniques for smaller-scale projects with one paper providing a case study of the co-creation of value through a big room approach (Alhava et al., 2015). Other examples from Finland have also been reported upon (Aaltonen and Turkulainen, 2018). LXRP also features co-location. However, as a very long site, being the linear stretch of rail line works each side of the removed rail crossing together with building railway stations, this means that the ‘big room’ is close to the site works but exists as a series of site sheds and offices. The effect and impact is similar to that described by Fischer et al. (2017, p44) for USA big rooms. LXRP-1 on Package 1 described their toolbox ‘big room’ meeting: I might have some pictures of it, but it’s just all the supervisors for the package, the planner, the rail safety people, the safety team, all in a room and it’s short and sharp, it usually goes for about half an hour or so, ‘What are you planning on doing tomorrow?’ Then, the following day it’s, ‘Did you achieve what you wanted to yesterday? If not, why not?’ and you start to get that loop of capturing the data. So, we had a little onepager that has, ‘This is what we plan to do today. Did we achieve it? If not, why not?’ and there are some categories, and they had started to categorise those things, and as I said, I think the execution of that has been a bit patchy, just because of the speed of what we’ve had to do it’s just dropped a little bit by the wayside. Co-location clearly has an impact upon the project morale, as discussed later in Chapter 15 (Behavioural elements of the IPD Collaboration Framework). Having co-location means that people naturally engage in conversation and through that enhance collaboration and trust building. Thus, co-location is an important platform foundational facility. 190

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Rating the substantial co-location element The indicative rating for the LXRP Package 1 alliance for this element is rated at 4: high. The evidence that leads us to this rating assessment follows. 1

2

3

Hierarchical co-location in the sense of both power and information symmetry (as opposed to asymmetry) was evident from the senior managers interviewed. The PAA was adhered to in terms of teams of people clearly seeing their responsibility and duty to speak up if they had something relevant to say about an issue under discussion, without concerning themselves that it might be considered improper in any way to voice an informed opinion, and to support that with evidence. All levels of worker from the on-site workforce and ATM and ALT members engaged in active listening. The quote from LXRP-4 indicated that the operations team were active participants and were able to offer practical operator-oriented advice about what may enhance or inhibit their task at project handover. The physical co-location was also intensive and highly effective. There was no big room as described by Fischer et al. (2017, p44) but the account of theirs was for a hospital site which was more compact than the long linear site of the railway-related works. The quote from LXRP-1 supported the concept of co-location as being a highly effective mechanism for all project participants to be clear and to contribute to the day-to-day operations of constructing the facility. The big room and toolbox meeting were extensive and effective but they were less extensive and fully engaging as that described by Fischer et al. (2017, p44) for IPD in the USA, so the rating has been set at 4 rather than 5.

Conclusion The aim of this chapter was to explain in more detail what each of the platform foundation component elements and sub-elements comprised. Each of these was described and reference Mutual dependence and accountability Transparency & open-book

Motivation and context 5 4.5 4 3.5

Joint governance structure Integrated risk mitigation & insurance

3 2.5 Pragmatic learning-in-action

2

Joint communication BIM etc

1.5 1 0.5

Focus on learning & continuous improvement

0

Incentivisation

Substantial co-location

Authentic leadership

Consensus decision making

Trust-control balance

No blame culture

Commitment to innovate Common best-for-project mindset/culture

Figure 9.3  Platform foundational facilities radar diagram

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was made to other chapters where readers may find more detail concerning specific theoretical background support for their identification as elements and sub-elements. The chapter also cited quotes from alliance studies and used the LXRP research study for Package 1 as a way to indicate how collaboration may be assessed and mapped. The results for the five elements are as follows: We present in Figure 9.3 a summary of the rating of the LXRA as an example of a visualisation showing only the first five elements because this chapter focusses on the Platform Foundational Facilities component of the Collaboration Framework. It may be useful for health-check and benchmarking purposes. This chapter offers LXRP as a useful example to illustrate the Platform Foundational Facilities elements and their sub-elements and to provide quotes from expert practitioners about their projects. The presence of these elements is critical to support the other two components.

References Aaltonen, K. and Turkulainen, V. (2018). The use of collaborative space and emerging socialization tensions in inter-organizational projects. 2018 IRNOP – A Skilled Hand and a Cultivated Mind. Walker D. Melbourne, RMIT: 23pp. Alhava, O., Laine, E. and Kiviniemi, A. (2015). “Intensive big room process for co-creating value in legacy construction projects.” Journal of Information Technology in Construction (ITcon). 20 (11): 146–158. Argyris, C. and Schön, D. (1978). Organizational Learning: A Theory in Action Perspective, Reading, MA, Addison-Wesley. Brady, T. and Davies, A. (2004). “Building project capabilities: from exploratory to exploitative learning.” Organization Studies. 25 (9): 1601–1621. Cullen, P.-A. and Hickman, R. (2012). “Conflicts between contract law and relational contracting.” Lean Construction Journal. 8 (1): 49–60. Doherty, S. (2008). Heathrow’s T5 History in the Making, Chichester, John Wiley & Sons. Fischer, M., Khanzode, A., Reed, D. and Ashcraft, H. W. (2017). Integrating Project Delivery, Hoboken, NJ, John Wiley & Sons. Henderson, L. S. (2008). “The impact of project managers’ communication competencies: validation and extension of a research model for virtuality, satisfaction, and productivity on project teams.” Project Management Journal. 39 (2): 48–59. Jacobsson, M. and Roth, P. (2014). “Towards a shift in mindset: partnering projects as engagement platforms.” Construction Management and Economics. 32 (5): 419–432. Kurtz, C. F. and Snowden, D. J. (2003). “The new dynamics of strategy: sense-making in a complex and complicated world.” IBM Systems Journal. 42 (3): 462–483. Lloyd-Walker, B. and Walker, D. (2011). “Authentic leadership for 21st century project delivery.” International Journal of Project Management. 29 (4): 383–395. Lydenberg, S. (2014). “Reason, rationality, and fiduciary duty.” Journal of Business Ethics. 119 (3): 365–380. Macneil, I. R. (1985). “Relational contract: what we do and do not know.” Wisconsin Law Review: 483–525. Matinheikki, J., Aaltonen, K. and Walker, D. H. T. (2017). Searching for a common tone – Institutional complexity in project alliancing. IRNOP 2017. Leybourne S. A. Boston, MA: 20pp. Mosey, D. (2009). Early Contractor Involvement in Building Procurement: Contracts, Partnering and Project Management, Oxford, Wiley-Blackwell. Müller, R., Packendorff, J. and Sankaran, S. (2017). Chapter 13, Balanced Leadership. Cambridge Handbook of Organizational Project Management. Sankaran S., R. Müller and N. Drouin. Cambridge, UK, Cambridge University Press: 186–199. Nyström, J. (2005). “The definition of partnering as a Wittgenstein family-resemblance concept.” Construction Management and Economics. 23 (5): 473 – 481. Rahmani, F. (2016). Conceptual models for selecting and managing Early Contractor Involvement (ECI) delivery system by clients. PhD theseis, School of Property, Construction and Project Management, Melbourne, RMIT University. Scheepbouwer, E. and Adam, H. (2011). “Transition in adopting project delivery method with early contractor involvement.” Transportation Research Recordgott. 2228 (1): 44–50.

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Foundational elements of the IPD Framework Scott, W. R. (2014). Institutions and Organizations, Thousand Oaks, CA; London, SAGE Publications Inc. Snowden, D. J. and Boone, M. E. (2007). “A leader’s framework for decision making.” Harvard Business Review. 85 (11): 69–76. Victorian Auditor-General’s Office (2017). Managing the Level Crossing Removal Program, Melbourne, ISBN 978 1 925226 58 4 101. Victorian State Government (2017a). Level Crossing Removal Project – Program Business Case, Business Case. Melbourne, Victorian Government: 287pp. Victorian State Government (2017b). Level Crossing Removal Project – Program Business Case - Procurement Strategy Supporting Information, Business Case. Melbourne, Victorian Government: 17pp. Walker, D. H. T. (2016). Understanding the Alliance Target Outturn Cost Process and its Implications, Melbourne, Australia, Centre for Integrated Project Solutions, School of Property, Construction and Project Management, RMIT University: 77pp. Walker, D. H. T. and Harley, J. (2014). Program Alliances in Large Australian Public Sector Infrastructure Projects, Melbourne, Australia, Centre for Integrated Project Solutions, RMIT University: 86. Walker, D. H. T. and Lloyd-Walker, B. M. (2015). Collaborative Project Procurement Arrangements, Newtown Square, PA, Project Management Institute. Walker, D. H. T., Matinheikki , J. and Maqsood, T. (2018). Level Crossing Removal Authority Package 1 Case Study, Melbourne, Australia, BIM+ Research Group, School of Property, Construction and Project Management, RMIT University: 77pp. Waugh, W. L. and Streib, G. (2006). “Collaboration and leadership for effective emergency management.” Public Administration Review. 66 (Special Issue): 131–140. Wearne, S. and White-Hunt, K. (2014). Managing the Urgent and Unexpected: Twelve Project Cases and a Commentary, Farnham, UK, Gower. Yeung, J. F., Chan, A. P. C. and Chan, D. W. M. (2007). “The definition of alliancing in construction as a Wittgenstein family-resemblance concept.” International Journal of Project Management. 25 (3): 219–231.

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SECTION 3

Section 3 concentrates on people, culture and collaboration as key ingredients to successful and effective integrated project delivery (IPD). ••

••

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••

Chapter 10 – IPD from a culture perspective: Chapter 10, by Walker and Rowlinson, explores and explains the culture of collaborative behaviours and more specifically delves into culture from a national as well as organisational perspective. The formation and maintenance of identity and motivation to form strong cultural bonds is a critical factor in shaping aligned and integrated joint goals and behaviours and helps to explain how no-blame workplace cultures develop. Chapter 11 – Knowledge, skills, attributes and experience (KSAE) for IPD-alliancing task motivation: Walker and Lloyd-Walker discuss in Chapter 11 recent research that identifies the knowledge, skills, attributes and experience (KSAEs) that shapes collaborative behaviours and links to strategies to develop these KSAEs to theory explaining how IPD encourages people on IPD projects to be motivated. These KSAEs provide human capital drivers that feed and sustain collaboration. Chapter 12 – People, careers and IPD human resource management: This chapter links closely to Chapter 2 to address a deficiency that is a poorly discussed aspect of project management. Lloyd-Walker, Crawford, French and Walker discuss career development in the new projectified workplace for IPD project participants in particular, and how they craft and shape their careers and how IPD organisations can enhance their project participation. Human resource management (HRM) implications have received scant attention at the operational and strategic levels of IPD projects. This chapter fills a gap in current literature in highlighting the requirements for new perspectives on HRM in integrated organisations that needs to attract and retain people with advanced collaboration skills and experience. Chapter 13 – IPD from a participant trust and commitment perspective: Davis and Walker in Chapter 13 position the influence and impact of trust, commitment and motivation into the context of an IPD framework and help to distinguish how characteristics of these aspects influence IPD effectiveness. It also discusses the psychological contract and how that affects collaborative behaviours and provides a focus on: how conflict is caused and resolved, resolution mechanisms, and creating a no-blame environment.

Routledge Handbook of Integrated Project Delivery

••

••

Chapter 14 – IPD from a stakeholder perspective: In Chapter 14, Aaltonen, Huemann, Kier, Eskerod and Walker explore and explain the concept of stakeholder engagement through applying an IPD perspective. Stakeholders include both project-internal as well as project-external people. Stakeholder engagement theory and discussion of its practice was nascent at the time of writing the 2008 book on procurement systems that this handbook updates (Walker and Rowlinson, 2008b) and there have been a number of important advances since that time, including the addition of stakeholder management as a project management body of knowledge (PMBOK) ‘knowledge area’ (PMI, 2013). This chapter draws upon case study material illustrating this emerging field in project management from Finland, Australia and Belgium to draw out IPD perspectives on working with stakeholders. Chapter 15 – Behavioural elements of the IPD Collaboration Framework: Walker and LloydWalker explore and discuss in Chapter 15 the behavioural factor component of the Collaboration Framework in more detail than was briefly outlined in Chapter 2.

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10 IPD FROM A CULTURE PERSPECTIVE Derek H. T. Walker and Steve Rowlinson

Introduction Throughout this book, particularly with respect to chapters relating to IPD-alliance behaviour factors, there is an underlying assumption that effective people integration and collaboration in project teams requires organisational support for a collective collaborative ‘culture’. Several chapters, for example Chapter 2, have explained collaborative action in terms of institutional theory, where the second of the three pillars supporting institutional theory relates to the ‘norms’ and values held by individuals and groups of people. Thus, an understanding of culture from an individual, group (or team) and organisational level is necessary to make sense of what may be meant by ‘norms’ and ‘values’ that underpin how people perceive the world they inhabit and work within. This chapter links in particular to Chapter 13 on trust and commitment, Chapter 14 on stakeholder engagement and Chapter 11 on alliance teams’ knowledge, skills, attributes and experience (KSAEs). The main issue handled in this chapter relates to the influence and impact that workplace culture has upon IPD-project performance and is answered through addressing these questions: 1

How do IPD (processes and norms) influence the creation and maintenance of a collaborative workplace culture to enable it to become institutionalised? 2 What mechanisms and processes ensure that an institutionalised IPD project culture supports collaboration? This chapter is structured as follows. We begin by defining and explaining the meaning of the concept of culture from the national perspective to explain possible differences in IPD approaches in different home-base settings. We also explore culture from an organisational perspective to explain different professional discipline biases and preferences and in a multi-discipline and crosscultural team workplace context. This is because most IPD projects engage people from multinational and cross-disciplinary backgrounds. This provides a basis to answer research questions 1 and 2. We then conclude by summarising the chapter.

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What is culture and how can we visualise it? In our earlier book on project-management procurement systems we developed an illustration of a systems view of culture (Rowlinson et al., 2008, p279). We adapt that to represent and introduce the IPD/alliance culture. Figure 10.1 indicates culture extended from the seminal view offered by Schein (1985) of culture being observed and explained at three levels: the superficial observable level of artefacts such as uniforms, badging or hierarchy status symbols; a deeper and more intense level of identification with a group that shares specific values; and at the deepest taproot level, a set of common assumptions of world views that support the shared values. The figure also illustrates this as being applicable to a world of cultures. Each individual would be shaped to some extent by their exposure to the national or regional culture to which they affiliate and have a sense of belonging to. This may be a deeply seated and ingrained default national culture but, as so many of us these days have transitioned and migrated across national/ regional boundaries, our national culture may be modified and somewhat hybrid. Professionalcultural influence may also be strong. We often talk in somewhat stereotypical terms about the cultural norms of various professions: an accountant as a ‘bean-counter’; a typical engineer or technology as a ‘nerd’; or others having a ‘soft social-science’ type mindset. These express the norms and expectations of the affiliated professional or occupational stereotypes. Organisations are often seen to exhibit cultural norms. Similarly, small groups of people in teams are also observed to develop a particular culture that may be shaped by a melange of the world of cultures, often with sub-cultures within groups. Finally, we may observe an individual culture or received set of values and common assumptions that are observable through artefacts. People’s individual assumptions, values and preferred identifiable symbolic artefacts change over time and through experience with other cultures of one kind or another. We also see in Figure 10.1 an alliance culture that is moulded and shaped by the interactions of cross-disciplinary members of a number of teams within an IPD-alliance. An alliance or other IPD contract form, as we have discussed in Chapter 21, facilitates the development of a single alliance culture. We shall explore more fully how this may happen shortly. The workplace culture is influenced by the owner participant (OP) and non-owner participant (NOP)

Depth of understanding

A world culture: world of cultures National culture

Individual culture Organisational culture

Alliance IPD culture

Professional culture

Low

Observable artefacts

Shared culture level of intensity Shared Values

Group/team culture

Assumptions

Sub-cultures X, Y …Z

Deeper

Taproot

Workplace culture

Figure 10.1  A systems view of culture (Source adapted from: Rowlinson et al., 2008, p279)

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teams’ organisational cultures that provide their ‘home base’ default corporate values and culture, and this is further influenced by the evolving culture of the group/team that in turn is influenced by the individuals within the workplace. The workplace culture then becomes the main culture that determines values, norms and ways that the regulatory framework is interpreted and how action is influenced.

National/regional culture Hofstede (1991) provides one of several seminal works on the study of national-cultural traits based on perceived shared values and beliefs of people and interpretations of their underlying assumptions. He was tasked by IBM between 1967 and 1973 with undertaking a worldwide survey of employee values and, using factor analysis, developed his original model that identified four dimensions of cultural values. Other seminal authors such as Trompenaars (1993) also described culture in terms of layers that reveal more and more about a member of that culture’s patterns of behaviour and underlying beliefs and world view. Hofstede’s (1991) original cultural dimensions comprise: ••

••

••

••

Individualism–collectivism, the extent to which people value action in terms of ‘I, we, they’. This may affect perceptions about initiatives and/or being pro-active or seemingly passive. Legitimacy, for example, may be perceived through the lens of social approval of the level of respect for individuals to either ‘get on with the job’ or their need to defer to what the collective may view as appropriate. Uncertainty avoidance, society’s tolerance for ambiguity and uncertainty. This is linked in part to taking the initiative. It can be explained by the extent to which people become anxious when faced with a dilemma and whether a rule or tradition should be accepted as ‘gospel’ or merely a ‘guiding principle’. Power distance relates to the strength of social hierarchy and the legitimacy of a person within the hierarchy to exercise power to take action. Some cultures accept and expect that ‘some people are more equal than others’; this impacts their view of the validity of entitlement and a prerogative to exercise power. Masculinity-femininity has been explained in terms of having a task orientation (being assertive) versus a person orientation (consultative). Some cultures value gaining consensus prior to action while others legitimise a more heroic approach to action.

Hofsede later re-analysed his data in light of new independent research from Hong Kong, resulting in his adding a fifth dimension, long-term orientation, and in his more recent update of his 1991 book he added indulgence versus self-constraint as a sixth dimension (Hofstede et al., 2010). ••

••

Long-term versus short-term orientation is explained through consideration of the consequences of action. Short-term orientation recognises immediate gratification as being important and more relevant than long-term gratification. Some cultures are willing to invest more time and resources while apparently gaining a lesser outcome if they believe that in the long term they will achieve greater leveraged outcomes. Indulgence versus constraint relates to a cultural view of what ‘success’ may look like and mean. In part this is seen as being linked to the individualism–collectivism dimension in that it is about the meaning of satisfaction and who should be satisfied (the individual or the group?). It suggests views about the lightness or looseness of society and levels of optimism or pessimism. 199

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Hofstede (1991: p7–10) argues that cultural values are embedded in a person’s psyche through being immersed within a culture and engaging in that culture’s practices. At the artefact level, language and gestures carry specific meanings that are recognised and coded by other people within that culture. Heroes and champions who represent an idealised synthesis of that culture are revered and represent the values of that culture. Collectively, people within that culture are shaped by rituals that bind them, and often outsiders to that culture may recognise these peculiar practices as markers that identify the culture. Another extensive study of global culture was undertaken across 62 nations under the ‘Global Leadership and Organizational Behavior Effectiveness (GLOBE)’ research program founded by Robert House in 1991 and culminated in a series of journal papers and two voluminous books (House et al., 2004; Chhokar et al., 2008). The GLOBE study in some ways parallels and complements the work of Hofestede (Hofstede, 1991; Hofstede et al., 2010). However, there were important methodological differences between the two studies. According to Hofstede (2006), the GLOBE survey involved a large collective team of researchers gathering data from almost 1,000 local organisations in 62 societies, while the Hofstede research was undertaken within a single multi-national organisation (IBM) by Hofstede himself (although later data was gathered with a small team of co-researchers). There was a seven-year time difference between the data gathering studies with the GLOBE being more recent than the original 1967–1973 Hofstede study, with a later update and expansion study published in (2001). The GLOBE study was undertaken during the early 1990s with the 62-country study being mainly carried out between 1994 and 1997. The GLOBE study survey respondents were managers, while Hofstede had gathered responses from a balanced cluster of employees and managers. The Hofstede study used a grounded theory approach that allowed the data to determine the output model whereas the GLOBE study used a theory-based analysis of data approach adapting the Hofstede dimensions and also drawing upon other literature on national culture. In Hofsetde’s comparison of the two studies, he observed that most of the GLOBE research team had US PhDs and he suggested that the study had a US-centric bias whereas the Hofstede study used local informants and participants and he argued his study was less fixated on a US corporate analysis lens. Finally, Hofstede focussed purely on societal cultures as differences between IBM respondents from different countries whereas the GLOBE study sought separate perceptions of the societal and the organisational context. The GLOBE study asked respondents questions about the ‘as is’ as well as ‘should be’ values. While there has been some controversy with several papers by Hofstede (for example Hofstede, 2006;2010) and from the GLOBE team perspective (Smith, 2006; Tung and Verbeke, 2010), both studies’ findings paint a similar picture. The GLOBE study introduced 18 dimensions, as opposed to Hofstede’s six. This may be seen as refinement or higher levels of analytical differentiation with both practices and values. The GLOBE dimensions are given as: uncertainty-avoidance practices; future orientation practices; power distance practices; institutional collectivism practices; human orientation practices; performance orientation practices; in-group collectivism practices; gender egalitarian practices; assertive practices; uncertainty avoidance values; future orientation values; power distance values; institutional collective values; human orientation values; performance orientation values; in-group collectivism values, gender egalitarian values; and assertiveness values. As these comprise values and practices it is not surprising that there are more than the Hofstede dimensions, which did not ask questions of respondents about their view of ‘what should be’ – rather they reported on the ‘as is’ situation as they saw it.

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What does all this mean with respect to IPD and collaboration? The main points that can be made in that regard are identified by Hofstede et al. (2010, p6) in a figure that they present on three levels of uniqueness in mental programming. They present the figure as a three-layered triangle. The base layer comprises ‘human nature’ that is stated as universal and inherited. ‘Culture’ sits upon that level and is described as being specific to a group, and is learned. At the apex level of the triangle is ‘personality’, described as specific to an individual and as both inherited and learned. In many ways this is key to IPD-alliancing culture. We saw in Chapter 2’s presentation of the Collaboration Framework, elaborated upon in Chapter 9 with an explanation of the foundational elements, Chapter 15 with behaviour elements, and in Chapter 21 with the processes and means that support and reinforce behaviours based on foundational collaborative infrastructures. The baseline cultural assumptions and personality of IPD-alliance participants are critical to the behaviours, supported by alliance-participant recruitment processes discussed in Chapter 12, that seek to enlist, source and develop people with the requisite skills, knowledge, attributes and experience (see Chapter 11) to fully participate within an alliance or other IPDtype form. While the IPD-alliance profile of cultural propensity does not suggest or exclude any national-cultural group we can see that some ingrained or culturally ‘learned’ traits need to be supressed while other traits need to be encouraged and developed. IPD alliancing, as argued throughout this book, produces the most effective and superior outcome where there is a culture of low power distance, low information and knowledge asymmetries, a supportive no-blame workplace environment and a best-for-project mindset where people recognise their interdependency. This set of antecedents for successful collaboration is intended to trigger initiative, shared authentic leadership (Avolio and Gardner, 2005; Toor and Ofori, 2008; Lloyd-Walker and Walker, 2011), balanced leadership (Müller et al., 2017) and innovation: both incremental and involving breakthrough thinking (Department of Infrastructure and Transport, 2011b;2011a). When we closely investigate both the work of Hofstede and the GLOBE research team we see that there is no single country or region that has an exact matching culture. IPD-alliancing needs in cultural terms are illustrated in more detail in Table 10.1. We would argue that participants in IPD alliances need to re-examine their inherent national-cultural influences in light of what IPD collaboration aims to achieve. Because their cultural traits are learned through their lived experience within various cultural groups, IPD participants can re-frame that learning to re-fit natural traits to amend their baseline assumptions to align with IPD-alliance values and principles. This requires re-framing their world view. Kaplan (2008) describes how framing contexts play out in practice. Through dialogue with others and self-investigation, the rationale for a particular world view may be challenged and refined in light of new evidence, experience and insights. In this case the re-framing involves a narrative about the advantages and disadvantages of competition and isolated team achievement in projects as compared to an integrated approach with a shared and co-responsible view of how best to achieve project success. In this way it could be argued that people take their nationalcultural traits and use a bricolage approach (Baker and Nelson, 2005) – where useful traits for IPD alliancing are maintained and destructive or negative traits are modified – and change to align with the required norms for the project. Matinheikki et al. (2017) undertook a study of an alliance in Finland in which participants from a similar national culture but different professional and workplace cultures came together in an alliance. They showed in their study that what they refer to as ‘institutional logics’ (essentially workplace and cultural cultures) were changed and transformed to suit the project’s alliance-culture needs.

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Derek Walker and Steve Rowlinson Table 10.1  Desirable cultural underpinning traits Trait

Trait explanation

Comment

Low power distance

Enabling teams to encourage questioning of assumptions and challenging of ideas.

Low information and knowledge asymmetries

Collaboration requires that all good ideas, knowledge and insights from experience should be available to the whole team for decision-making.

No-blame and no-guilt workplace environment

Psychological and physical safety to experiment and try new approaches without being penalised for failure.

Best-for-project mindset

The whole project team, owner participant, design team, delivery team and operator need to act as a single team with the top priority being a best-project outcome.

The paradox here is that while position power is not considered to ‘trump’ discussion or dissent, respect of other people’s knowledge and experience is high. Power in this instance relates to expertise, reasoning and communication. This workplace cultural situation requires both leadership support to encourage this trait but also needs supportive governance arrangements to encourage, reward and celebrate sharing knowledge and information. Lloyd-Walker et al. (2014) explain in detail what this entails. This trait requires both cultural-behavioural as well as supporting processes and governance for a no-blame and no-guilt workplace. It also clearly requires a tolerance for ambiguity and uncertainty. This trait links closely to cultural dimensions of collectivism, feminine orientation (collective consultative outcome rather than individual task achievement) and both a long-term view and avoiding immediate gratification of small wins rather than the end result.

Professional culture We use the term ‘professional’ to imply a mindset that values the quality of output or outcome over the level of remuneration for providing that product or service. One characteristic of a profession is that its members have specialised knowledge, expertise and experience in a certain field. A second is that the professions have an agreed and enforceable code of standards and ethics, usually with directly or indirectly developed and administered expulsion sanctions (Gouldner, 1957; Brien, 1998). Thus, people are partially self-accountable to adhere to a clear set of values and standards of conduct and they are expected to be, and expect of themselves, to maintain their level of expertise. Professionalisation has been institutionalised, first through the ancient system of guilds in ancient civilisations dating back to the first millennium, and more recently with the establishment of professional bodies to standardise various occupations such as doctors, accountants, engineers and architects, etc. (Lucassen et al., 2008). However, trades and craftspersons may also consider themselves professionals based upon a mindset of excellent craftsmanship and innovative thinking as well as producing the best product that their skills and ingenuity may produce, even if this incurs unexpected expense and other resources. Wolek (1999) provides an interesting account of the emergence and history of craft guilds and the political struggles they encountered, and relates the values of craftspersons as being 202

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consistent with a Calvinistic view of serving God through what may be described as excellence. This follows a long history of the craft guilds and political power struggles during the Industrial Revolution when commercial ideals were in conflict with aesthetic value of craftspersons who could aspire to what they saw as close to perfection while industrialisation sought standardisation and quality at the minimal acceptable level rather than the highest level that reflected ethereal standards, particularly for religious artefacts. However as Wolek (1999) points out, the guilds were highly hierarchical and observance of guild rules constrained craftspeople as much as it liberated their desire to produce an excellent product. There are many books on the history of guilds. Rigid social-structural constraining elements of behaviour through the political and economic systems of guilds suggest that there was a lack of encouragement to ‘challenge the system’. The model of trade guilds suggests values of achieving excellence and highlighting aesthetics over success by extracting commercial advantage through regulating their competitive advantage of having a rare skill to match demand. Hodgson and Paton (2015) argue that engineers and managers in construction and other complex areas of project management (PM) are increasingly seen, and see themselves, as professionals. These project workers identify themselves with the work they do and the value that they contribute. They tend to construct their identity related to a sense of professional excellence by their knowledge of best practice and their ability to deliver a project result that fits the project owner’s requirements. Best practice follows templates and methods adopted by professional peers based on both theoretical and experiential foundations of knowledge. The project owner’s requirements are expressed in the project brief, contract documents and other regulatory sources. Balancing this identification of best practice with the practicalities of delivering on a project owner’s requirements may result in a struggle to reconcile conflicting values. The conflict experienced by mature and experienced professionals is compounded by project situation characteristics in terms of being simple, complicated, complex or chaotic. Snowden identifies these four situational domains in his Cynefin Framework (Kurtz and Snowden, 2003; Snowden and Boone, 2007). Simple situational domains are associated with a well-known and easily recognised single-problem solution where best practice can be applied because cause and effect can be easily understood. Complicated situational domains are associated with less certainty about the problem’s cause and effect but with expert advice the situation can be understood and there may be several equally valid solutions and approaches available. Snowden refers to ‘better practice’ as appropriate for this domain, and professionalism is exhibited by knowledge of a number of solution options and a repertoire of better-practice approaches. Complex problem situational domains are highly challenging because there is a great deal of uncertainty, turbulence and flux in the situation, and so the expertise required for this is about pattern matching and undertaking a series of experimental moves that can be rapidly evaluated and assessed to determine if they should be amplified or dampened. Often this requires novel practices to be introduced. Finally, for chaotic problem situational domains there are extremes of turbulence, uncertainty and flux and so there is no point in looking for answers. Immediate action is called for with immediate evaluation and action similar to that of the complex domain but with concerted efforts to shift the context from chaotic to complex. Complexity can also arise from ambiguity and uncertainty surrounding conflicting approaches to work by various team members (Remington, 2011). For example, Remington (2017) notes that complexity arises from various project participants not understanding that their goals, methods and professional values may not align and may be in conflict as they assume that the whole team is working towards the same goal so that perceptions of accountability may be ambiguous. This source of ambiguity and the need for various teams with differing institutional logics that need to be recognised and aligned has been studied in an alliance context in Finland. This demonstrated that conflicting demands 203

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of multiple team logics can be mitigated but that this requires both firm governance processes to help that hybridisation of logics towards a common accepted one, as well as significant cognitive and cultural work (Matinheikki et al., 2018). Hodgson and Paton describe PM professionals as cosmopolitans and locals (2015). These terms draw upon seminal early literature on social theory and social structure, specifically that of Gouldner (1957, p290) who argues that cosmopolitans are loyal to the values and standards espoused by the professional entity that they belong to and are likely to use for their outer reference-group orientation, while locals maintain loyalty to the organisation that is employing them. Gouldner (1958) further delineates these two categories through a study of 124 academic and administrative support staff at a US university. Cosmopolitans were seen to comprise: ‘outsiders’ exhibiting relatively low integration levels in either the formal or informal organisational structure; and ‘empire builders’ who believe that their employment opportunity outside of their current employment organisation is good and, thus, they are alert to career possibilities elsewhere and use their current role as a stepping stone. Cosmopolitans may be seen to prioritise their professional standards over their client/employer’s influence. Locals fell into three categories: ‘the dedicated’ that identify with and live by the distinctive organisational values and ideology; the ‘true bureaucrat’ that rigidly holds to and defends the prevailing organisational values and rules; and the ‘home guard’ with the least occupational specialisation and commitment to any ‘professional body’ but who may be considered as foot soldiers for the organisational values and standards. The nature of a person’s affiliation and where their main loyalty positions itself is important because it affects the extent to which they identify themselves as focussing on values of achieving a high-quality rather than merely a profitable output or outcome. This provides an interesting insight into the way that norms are shaped by these two professional categories. Hodgson and Paton’s re-examination and observation of cosmopolitans and locals within a project-management context (2015) reveals several interesting paradoxes. First, PM professionals, unlike other professionals such as medical doctors or accountants, have an agnostic attitude towards some of the espoused assumptions of the nature of PM as represented by the two main project management bodies of knowledge (BoKs) published by the Project Management Institute and the International Project Management Association. There is a distinctive tension as PM professionals seem to be more pragmatic and experience ‘difficulty finding a fit between the formalised, prescriptive knowledge contained in the BoKs and the other, more grounded and contextual forms of knowledge required, such as skill (techne) and wisdom (phronesis)’ (Hodgson and Paton, 2015, p362). Further, they add that ‘many project managers prioritise their local knowledge, including ‘technical expertise’ of the product or service combined with domain knowledge of company and industry over their mastery of the professional body of knowledge’ (Hodgson and Paton, 2015, p362). This suggests that the identification of many PM professionals with their professional association’s knowledge base (BoKs) may be weaker than their identification with their broader ethical stance, for instance. It also suggests that a hybrid cosmopolitan-and-local culture of ‘doing a high-quality job’, expressed in alliancing-IPD terms as best-for-project, fits with a cosmopolitan sense of professional achievement. In complex projects such as the major infrastructure projects undertaken recently and discussed in this book (T5, Crossrail, and alliance project and program studies undertaken in Australia, New Zealand and Finland, for example), the majority of the project managing team, such as the owner representatives, the design and delivery professionals and facility operator professionals, are likely to first consider themselves as professionals with specialised skills and expertise in their field. The professional culture values and instinctive rules and regulations they work within are strong. However, as noted in the previous section, with the example of alliance studies undertaken in Finland by Matinheikki et al. (2018), institutional logics held by 204

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the diverse professional groups engaged in such projects are capable of, and do, adjust to one that is focussed upon a best-for-project outcome. This adjustment also includes the move from separate groups jealously guarding their power, knowledge and information to a low asymmetry of these resources to allow greater collaboration and integration of teams to explore and develop innovation and continuous improvement. Thus far we have not mentioned the project workers at the sub-contractor level who may be skilled workers but, while they may belong to a recognised trade group, do not belong to any formal professional group. While we are unaware of any studies into this group of project workers about their world view of collaboration and how that may affect their workplace environment, there are some anecdotal observations worth making. First, we see a general increase in the term ‘artisan’ or ‘craftsperson’ being used in a number of trades-based contexts. For example, the food and catering industry uses these terms to differentiate products and services to imply a superior level of quality. For many years, fine furnishings as well as artistic productions have stressed skills, expertise and dedication to excellence in high-end quality products. In the many research interviews that we have undertaken on IPD-alliance-type projects we see the PM teams commenting about the dedication and skills of their workforce and how their collaboration at the practical level has made a difference in the development of innovation and its diffusion. Chapter 18 provides some examples of this. One example we can provide of a culture of innovation and knowledge sharing at the tradesperson and supplier/sub-contractor level follows from a study of the Level Crossing Removal Program (LXRP) discussed in several of this book’s chapters. Interviewee LXRP-1 commented upon a recently developed technical innovation: it’s called a rail springer. . . . This has been developed with one of our superintendents and a supplier. . . . there are different types of rail track that are in the network: one of them is called Dog Spike Track, which is, literally, spikes that are driven in to hold down the foot of the rail, and they’re very labour intensive to get out. You have a lot of people with machines that pull them out one by one, a very slow manual task, lots of safety issues and injuries as a result of the manual task. . . .we’ve spoken to a boiler maker who has developed this with our superintendent and this is just a video that – what this thing is, it’s just a way of springing out those Dog Spikes with an attachment on a high rail excavator that’s heaps quicker, costs less because there’s less people, and it’s safer. This example illustrates how collaboration and integration between the alliance team and its field workers, and suppliers, operates in practice. It demonstrates that people share knowledge and expertise and use their practice to inform a co-creation of a new innovation. This may also be explained in terms of how these workers perceive their contribution to the project’s outcome. In Chapter 11 we discuss KSAEs with reference to the widely and currently accepted (Hackman and Oldham, 1976) job-characteristics model (JCM) that helps explain worker motivation through their perceptions and experiences of work. Six work-task characteristics contribute to three psychological states that impact the cultural norms that in turn affect their motivation for cosmopolitan and local values and standards. Task variety, identity and perceived significance shape the worker’s perceived meaningfulness of work. Task autonomy impacts how they interpret their level of responsibility. Task feedback, and how salient the workers feel the feedback is, shapes their potential and impacts their interpretation of the feedback quality they receive. The level of support provided by the workplace environment and the workplace processes that are enacted mediate and contribute to how workers perceive their level of professional responsibility should be. This is illustrated in Figure 10.2. 205

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Supportive workplace environment

worker’s task motivational cultural context

Supportive workplace processes

Work/task contextual influence on the cultural norms that impact worker’s motivation Interpreted work responsibility

Interpreted work meaningfulness

Skill variety

Task identity

These impact perceptions on how the work may potentially facilitate and shape meaningful work contribution

Task significance

Task autonomy

Interpreted feedback quality

Task feedback

Feedback salience

These impact potential professional cultural support for active learning, experimentation, high quality-relevant feedback and collegial support

Figure 10.2  Illustration of IPD workplace motivation to collaborate

Drawing on the above discussion we can see how workers may be motivated and how their norms may be shaped. The perceived professional culture for those that many may see as professionals (project managers, engineers or design specialists, for example) as well as workers who may identify with being a craftsperson or artisan and therefore adopting professional attitudes towards their commitment to a best-for-project high-quality outcome. Interviewee LXRP-1’s quote also suggests a high regard for the professionalism shown by those workers and how the alliance culture encourages and engenders that culture.

Workplace culture An alliance and other similar IPD arrangements share a workplace culture exemplified by the values illustrated in Table 10.1. The research undertaken by Matinheikki (Matinheikki et al., 2016; Matinheikki et al., 2017; Matinheikki et al., 2018) is of particular salience in understanding how a clash of cultures resolves itself through co-creation of a hybrid culture. This emerges through the context of contested frames as argued by Kaplan (2008) and discussed above. After some time, often quite quickly, the alliance or other IPD-form single united project team ends up identifying with the project and the explicit or implicit charter of values and behaviours accepted by this team. Artefacts that help bind people include the badging of the alliance or other IPD-project form so that they identify with that project and its objectives. Badging occurs through clothing motifs (often literal badges on safety vests, etc.), letterhead and email domain addresses and various publications and news releases to stakeholders and the public. Varying intensity of co-location of the participant teams into a single location or through virtual spaces aids solidarity of identification with the project (or program). This socially constructed adhesion is supported by structural-regulative measures. The alliance agreement, for example, that we have used throughout this book to illustrate how collaboration is encouraged contractually, has a behaviour set of measures with values that are not only espoused but used as part of an alliance 206

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team selection (Department of Infrastructure and Transport, 2011c) and recruitment process for its members. The regulative framework further supports collaboration levels that define an alliance uses language that underlines shared responsibility and accountability and interdependence through terms such as ‘we. . .’ Rather than ‘you . . .’ (Department of Infrastructure and Transport, 2011a) with a risk–reward system that reinforces gain or pain based on key result areas (KRAs) that are based on project – and not individual or sub-group – performance (Ross, 2003; Department of Infrastructure and Transport, 2011b; Ross et al., 2014). All these influences that are specific to alliancing and similar IPD forms create a different workplace culture than naturally occurs in traditional project delivery forms. One manifestation of the workplace culture of alliancing, for example, is the no-blame principal. This principle, as explained by Lloyd-Walker et al. (2014), highlights the businessas-usual (BAU) traditional approach to resolving issues compared to the alliance approach. In that paper, the alliance manager of a case study alliance project contrasts the BAU approach with the alliance approach illustrated by Figures 3 and 4 in the paper. It becomes clear that there is a shifting of position away from a blame to a non-blame workplace culture in alliances. Figure 3 (Lloyd-Walker et al., 2014, p9) illustrates how in a BAU blame-culture situation when a potential problem requiring cross-team action is identified it is generally associated with initial thoughts about where blame may be apportioned, resulting in non-disclosure, hiding the evidence or cover-up activity. They contrast that in Figure 4 with the alliancing example where there is open disclosure and collaborative effort in overcoming the problem or challenge (2014, p9). Thus, early warning signs are flagged and not concealed, mistakes/ unintended consequences of previous action/inaction are openly discussed as opportunities for learning, and collective action is undertaken on the basis that all parties are tightly interconnected and interdependent and that the KRAs are measured on project results and not individual results. Attending to early warning signs has been empirically found to significantly impact project output performance (Giegerich, 2002; Nikander, 2002; Williams et al., 2012; Haji-Kazemi and Andersen, 2013) by averting risks faced by a creeping crisis (Loosemore, 2000) and taking advantage of an emerging risk by re-framing a problem into an opportunity (Klakegg et al., 2010). How can a no-blame workplace atmosphere and culture be created? Chapter 13, on trust, shows that integrity and ability are key elements that determine trust. While taking responsibility for a fault, error or unintended consequence by admitting making a mistake may seem to reduce credibility about one’s ability, it may enhance perception of one’s integrity, particularly when the circumstances are explained and the context is better understood. This type of action highlights the benevolence aspect of trust because it flags action taken to rectify a harmful or potentially harmful situation. A values-focus on trust can help foster a no-blame culture, provided that the exercise is treated as a learning exercise and that the discussion is genuinely about how a context or set of assumptions were made in error. This is not an easy culture to develop, particularly where participants have a high power distance or uncertainty-avoidance national-cultural preference default. Further governance measures can assist so that important decisions, such as those agreed upon in an alliance management or leadership meeting, are unanimously agreed upon after the various interdisciplinary members of those committees explore the context and assumptions surrounding the issue to promote widespread awareness and appreciation of the issue. The logic applies that if the decision is unanimously made then parties to those decisions cannot fairly shift blame after being party to the decision. This feature is also designed-into alliancing and other similar IPD forms and is not found in other forms of delivery as a matter of course. Implied in the above discussion, and referring to the quote by Interviewee LXRP-1 in the previous sub-section, is a workplace culture of learning through action and doing, 207

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experimentation and trial-and-error approaches that rely upon an open no-blame workplace culture. Also, for IPD alliancing there is an acceptance and welcoming of groups with different default professional or national-cultural traits. Different ways of learning are favoured by different cultural preference backgrounds. Figure 10.3 illustrates how various cultural traits (national, professional or workplace) can impact upon the way that people in a team may see problems and solutions and how they may use challenges to trigger innovation. Yamazaki (2005) investigated the relationship between learning and cultural styles, drawing upon a large body of literature in anthropology, crosscultural management, and cross-cultural psychology. He adapted Kolb’s (1984) experiential learning model based upon concrete experience (CE), abstract conceptualisation (AC), reflective observation (RO), and active experimentation (AE) and integrated the concept of several cultural dimensions discussed earlier in this chapter. For example, Yamazaki considered highand low-context cultures where high context refers to cultures that are open to, and perceive as legitimate, cues and communication from a wide range of sources whereas a low-context culture may be comfortable with a narrow set of cues such as ‘what is authoritatively written’. This is somewhat akin to the Hofstede (1991;2001) uncertainty-avoidance dimension. The shame culture relates somewhat to power distance and the concept of ‘face’ in many Asian cultures that dominates the way that negotiation and communication takes place based on notions of selfand other-respect and a reluctance to embarrass or be embarrassed (Ting-Toomey et al., 1991). Shame is connected to the emotional reaction to being criticised, while guilt is more personal and perhaps hidden from view or masked in some way. Yamazaki also refers to O-type and M-type organisations where O-types have few job-description constraints and boundaries and

Concrete Experience (CE) ‘Feeling’

Converging (acting on plans)

AE – practice and experimentation – e.g. I try out new things

Diverging (reflecting on experience) High context Shame culture O-type organisation Interdependent-self Field-dependent Strong uncertaintyWeak uncertaintyavoidance Cultural avoidance Interdependent-self Typology Independent-self Guilt culture Low context M-type organisation Independent-self Field-independent

Assimilating (analysing and concluding formulating plans of action) Abstract Conceptualisation (AC) ‘Thinking’

RO – observation – e.g. I watch and observe

AC – rational theories – e.g. I set priorities

Figure 10.3  Learning styles and culture (Source: adapted from Yamazaki, 2005)

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Reflective Observation (RO) ‘Reflecting’

Active Experimentation (AE) ‘Acting’

Accommodating (acting on intuition)

CE – personal relationships – e.g I rely on my feelings to guide me

IPD from a culture perspective

are more people-to-people communication-oriented while M-types are more task-oriented, formal and less people-oriented in their preferred communication. Interdependent self and independent self compare somewhat with Hofstede’s individualism–collectivism dimension. Field-dependent and field-independent refers to the extent to which people rely on empirical evidence from the situation at hand as opposed to relying more on theory for abstracting and gaining understanding of a problem or situation. Figure 10.3 also illustrates learning styles’ cultural preferences, for example, a concrete experience ‘feeling’ approach is associated with a high-context, shame culture, O-type organisation, interdependent self and field-dependent cultural influences led by a diverging (reflecting on experience) learning-style approach combined with and accommodating a learning style (acting on intuition) where personal relationships are important. The other three styles similarly outline the basis of learning-style preferences and space does not permit us to further explain these in detail. The main point is that it is clear from Figure 10.3 that cultural background influences the way people learn and that this leads them to adopt different learning styles: these styles are equally valid for them and work best for them. What becomes evident from this figure is that it provides a diversity of learning approaches and so any issue, challenge or problem may be investigated from a range of perspectives if the cultural preferences of team members are respected and the focus is on a competition of framing (Kaplan, 2008) genuinely undertaken through respectful dialogue. We may even see how this figure suggests dealing with complex projects, as described in the Cynefin Framework (Kurtz and Snowden, 2003; Snowden and Boone, 2007), where often a number of perspectives on a complex situation are needed for effective sense-making. Accommodating a wide diversity of cultural backgrounds (based on national, professional or organisational default positions) may seem like a recipe for chaos and disputes but when it is combined with a workplace culture of mutual respect for ideas and expertise, and a pragmatic approach to recognising that most problematic and challenging situations require a wide pool of opinion, then it makes sense to encourage diversity. Consensus decision-making takes on a different form with people from a wide cultural genetic pool (through the cross-disciplinary and integrated role of OP and NOPs) especially when competition of framing (Kaplan, 2008) is undertaken to agree on what appears to be the preferred best option. Couple this with a no-blame culture and we can appreciate that any position that has been accepted is contestable, subject to revision of assumptions based on concrete experiences. A team that conducts its business this way may be argued to be stronger, far more robust and resilient, than one in which a majority rule prevails based on those with the most power or loudest voice. Thus the workplace culture that exemplifies these attributes, as is designed-in for alliances and other IPD forms, is likely to perform quite differently to a BAU traditional project delivery form. This type of organisational culture should arguably possess greater dynamic capabilities than that of many BAU forms. Teece (2012;2013) argues that dynamic capabilities are represented by an ability to absorb new knowledge and deploy it rapidly, to be more flexible and ambidextrous as well as resilient – able to recover from unexpected setbacks quickly – and to be pro-active and innovative. We see in values espoused by agencies that undertake projects through alliancing (Department of Infrastructure and Transport, 2011b) that the workplace is more supportive of innovation and innovative thinking. Specifically, the alliance agreement and behavioural expectations and demands provide supportive workplace processes to support and compliment an innovative workplace culture. This then facilitates and supports project team members and workers to perceive their work as being more meaningful, they feel greater responsibility for their work and they gain greater positive feedback as suggested in Figure 10.2. 209

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Answering research questions 1 and 2 1

How do IPD (processes and norms) influence the creation and maintenance of a collaborative workplace culture to enable it to become institutionalised? 2 What mechanisms and processes ensure that an institutionalised IPD project culture supports collaboration?

Research question 1 The previous section discussed culture and how it creates and maintains collaborative norms from several perspectives. We saw the workplace culture as evolving from a number of influences. A key influence is the specified project-alliance agreement behaviours that govern selection of the successful alliance proponent syndicate and the maintenance of these behaviours to become the workplace norms. Both national-cultural and professional-cultural dimensions and characteristics shape the view of people because they provide a benchmark or baseline default position for them that is based on the values and assumptions that they affiliate with. We also saw that professional values and acceptance of what may constitute appropriate practice is also group-centric and while some of these may be shared, others rely on assumptions about the context in which these may be applied. Additionally, professional and skilled artisanship cultural norms combine cosmopolitan values of prioritising performance to comply with excellence craftsmanship with local values of prioritising performance to comply with what the project owner specifically requests or expects. Moreover, individuals may also reference and affiliate with some learned and absorbed cultural influences from their ‘home’ organisation and they may also affiliate with a smaller group/team culture and even sub-culture. This adds a layer of complexity to how a workplace culture is co-created by its members. Each individual makes sense of the workplace context and situational characteristics and amends their evolving mental frame to how they see their world within the contested mixture of the mental frames of others with whom they engage in dialogue to form a hybrid mental frame. We can understand this process of creating and maintaining a collaborative workplace culture as an institutionalisation process (Scott, 2014). Figure 10.4 illustrates this. We can answer question 1 by referring to Figure 10.4. The regulatory pillar provides the rules, governance, templates and guides as set out in the alliance agreement and also the professional ethics (combined cosmopolitan and local) expectations that play a regulative role. The normative pillar comprises the norms that are considered and determine how work will be done. The cultural-cognitive pillar is the manner in which people within the alliance interpret the rules, etc. based on their developed norms. Success in interpreting rules and understanding the culture and responding appropriately is mediated by people’s cognitive ability to make sense of the intent and relevance of the regulative pillars, understanding the nature of the problem domain they are in (simple, complicated, complex, or chaotic) and their resilience, dexterity and ability to reflect. In summary, question 1 takes an institutional-theory perspective to posit that an alliance culture results from a complex process of adjustment, re-alignment and re-calibration of baseline alliance-agreement requirements based on the cognitive abilities of the alliance team to understand their own cultural norms and the required cultural norms for the project. Figure 10.4 illustrates the process. It is one where: 1) The alliance agreement is clear in stating what is required of participants. It spells out commercial arrangements and how incentives are linked to the project one-team performance result so that integrated and shared responsibility and accountability determine the 210

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Incentives

Commercial

National culture

Behaviours

Professional culture

Individual culture

The alliance agreement

Group/team culture

Professional ethics

Regulative pillar: Rules; governance: templates: guides.

‘home’ organisation’s culture

Normative pillar: Culture (national, group, organisation) espoused values, Perceived praxis

Cultural-cognitive pillar: Agency, skills, knowledge, dexterity, resilience, reflective capacity.

Workplace culture

Figure 10.4  Explaining the evolution of a collaborative culture

gain- and pain-sharing arrangements. The governance provisions also require transparency and openness in all team dealings with each other. 2) The alliance norms reinforce and support the intent of the governance framework. Openness and transparency leads to low knowledge and power asymmetries and improves levels of trust (see Chapter 13 in this book) compared to a traditional project delivery approach. This facilitates a no-blame and no-guilt culture with open discussion and, because the culture allows, and indeed encourages, healthy challenging of assumptions, that in turn supports collaboration and integration of specialist alliance participants into a united one-team mindset. The norms also extend to mutual respect because that respect is based not on hierarchy but on expertise and the value of a member’s potential contribution. Leadership tends to be shared, collective and based on initiative, so that when a decision needs to be made it will be shepherded by various alliance participants as and when they are required to take on that integrative shepherding role. 3) The cultural-cognitive abilities, capacity and practice are crucial in alliancing and other IPD forms. Chapter 11 discusses the KSAEs required of alliance-IPD participants. These are actively sought through the alliance syndicate recruitment process to form the alliance team as well as KSAEs being actively developed. Chapter 12 discusses this aspect in greater depth. These sophisticated abilities permit the requisite influence and effort to institutionalise the alliance at its inception and to develop and maintain its core ‘meaning’ throughout the alliance duration. To illustrate what this may mean in a practical sense we can draw upon alliancing research in which an alliance manager explained the ambience of an alliance. This helps us to understand 211

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how an alliance feels to those participating in one and how the culture of IPD alliancing is enacted. Walker and Lloyd-Walker (2014, p6) describe ambience as follows: Culture suggests being a part of the whole and to recognise it one needs to be acquainted with that culture and capable of interpreting it as a culture. Atmosphere suggests the quality of the surroundings, sounds, light, smells, but it relates to the actual external situation that everyone would experience. Ambience, we argue, combines the internal feeling of being within a culture with the external sense of atmosphere. They further illustrate this with a quote from an alliance project senior manager whom they interviewed about what it was like to work in that organisational cultural setting. He replied: To me it’s a vibe or a synergy or something that you get together once your team get focussed and once they can see where they’re going and once they’ve got a best-forproject, and that focus, it can produce some really really outstanding results. If the team is buzzing and it is all heading in one direction you can still get a really good outcome from a business-as-usual but you don’t seem to have that same buzz or vibe, that feeling that everybody’s pulling in the one direction. (2014, p6) What this quote illustrates is high levels of integration, collaboration and motivation towards the alliance goals. Figure 10.2 helps to explain how this ambience may occur. Clearly from the quote, we see that the alliance work appears to be perceived by the whole team as meaningful; they understand how they are responsible for the result and they feel that their feedback (extrinsically as well as intrinsically) is positive and this sets the team on a virtuous circle of collaboration.

Research question 2 An alliance, or other IPD arrangements, demonstrates a cultural-alignment process through its observable artefacts. Here we can see the workplace culture subsuming legacy organisational culture, group/team culture, individual and subcultural elements. Observable artefacts, such as having various teams use the same email domain address or wear the same badged clothing on-site do not of themselves explain how they feel integrated in a single project team but they suggest that the dominant culture is the alliance workplace culture. We have to look deeper at the way that shared values become shared and how assumptions are modified within IPD teams. The ambience quote above suggests the deeper levels of culture. In numerous studies on IPD and alliancing we see examples of the process of aligning teams to the alliance workplace culture taking place effectively. Co-location and near-physical co-location (and perhaps less intense but still evident in virtual co-location) is seen as a powerful process tool for enabling collaboration and innovation in the USA on IPD projects, as highlighted in the Fischer et al. (2017) book and also in Finland with another IPD form of project being delivered (Alhava et al., 2015). Co-location was not just about having people work together in a ‘big room’ but having them use a range of collaborative tools, including sophisticated digital building information modelling (BIM) tools together with digital immersion technologies so that the project-owner participant, design team and delivery team (and operational team members if included within an alliance or IPD team) can make realtime assessments and make decisions when planning or problem-solving. The big room allows 212

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unprecedented ability to help shape a close-knit culture of collaboration. Dave et al. (2015, p587) discusses the way that digital tools are used to create a digitally adept collaborative culture, stating the following: Although their composition varies from project to project, Lean Construction and Building Information Modelling can be considered as two main components that support a Big Room environment. Specific tools such as i) Set-based Design; ii) Last Planner; iii) Design Structure Matrix; iv) Target Value Design; v) Choosing by Advantages; vi) Value Stream Mapping; and vi) Visual Management are the most commonly used Lean Construction tools and i) Visualisation, clash detection, 4D simulation; ii) 5D modelling (quantity and cost); and iii) Model-based prefabrication are the most commonly used BIM tools. We do not attempt to explain all these tools in detail (some deeper discussion may be found in Chapter 17) but it becomes clear that these mechanisms and processes, when operated within a workplace culture that welcomes and pragmatically uses these tools, form a tangible part of assisting the cognitive-cultural pillar of institutionalisation to support that workplace culture’s maintenance, so that it becomes ‘the way we work around here’. Other examples of how a collaborative workplace culture supports innovation are discussed at length in Chapter 18. Interested readers may wish to read that chapter from the perspective of this chapter. Organisational and individual learning incentives in alliancing provide powerful motivational processes for collaboration, as discussed and illustrated in Figure 10.2. Adjustment processes by alliance participants to co-create an alliance workplace culture are complex and time-consuming as well as requiring significant cognitive effort. Individuals influence the workplace culture norms and values and these are shaped by default cultural values (national and professional) that are hybridised in a way explained by Matinheikki et al. (2017;2018) and discussed earlier in this chapter. The way that people engaged in an open dialogue as part of the contest for framing cultural norms can be seen as another mechanism and process to support collaboration. Kaplan (2008) argued that framing contests are enacted through dialogue until a hybrid workplace culture emerges as professional and national-cultural traits and pre-dispositions are challenged, re-negotiated, revised and become established. This all occurs within a governance framework, and we have focussed on the alliance form of IPD, that requires low power, knowledge and information asymmetries and other values such as respecting expertise as a primary source of influence to dominate the rules of engagement. We therefore see that from an institutional-theory perspective (Scott, 2014) there is a supportive governance framework and that this influences the norms because teams that make up the IPD single team are selected and recruited based on the behavioural leg of, and language used in, an alliance agreement (Ross, 2003; Department of Infrastructure and Transport, 2011a; Ross et al., 2014). The cultural-cognitive institutional pillar is developed through a process of experiential learning. This, in the learning processes as illustrated in Figure 10.3, is complex because of the various team default cultural preferences that impact on an individual’s learning style. However, as Matinheikki et al. (2017; 2018) have discovered, people can and do adjust and hybridise their default logic to suit the context when given the support and development opportunities. Their sense-making ability is linked to the cultural-cognitive institutional pillar. Key to understanding that context is understanding the mechanisms and processes that insure that the IPD project supports collaboration and allows people to re-frame their default cultural values to a shared set of values that is consistent and aligned with the alliance agreement. The previous discussion is taken from the perspective of national, professional and workplace culture answers to research question 2, for alliance and highly relational IPD projects. 213

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Similar observations could be made about other projects, such as the tremendous innovation thrust on T5 and Crossrail (Davies and Brady, 2000; Davies et al., 2014; Davies et al., 2016; MacAulay et al., 2018).

Conclusion This chapter focussed on the IPD-alliance workplace culture and how it enables collaboration. One aspect of the chapter that introduces new ideas about PM for highly relational IPD projects, such as for alliances, is that there is a pressing need for alliance team members to have considerable cultural-cognitive ability. This may be demonstrated by, for example, awareness of the national-culture dimensions of people from a different culture. To be able to engage in effective dialogue in re-framing a workplace culture to effectively meet the needs of the project, a person needs to understand ‘the other’ culture so that assumptions can be explored and examined and so that the kind of hybridisation discussed by Matinheikki et al. (2017; 2018) can effectively take place. The chapter explained the cultural dimensions offered by Hofstede et al. (2010) to provide readers with some baseline cognitive-mapping ability. The GLOBE study literature and dimensions were also discussed (House et al., 2004; Chhokar et al., 2008) and compared with that of Hofstede et al. (2010). The other elements of professional culture and workplace culture were also discussed, with an important new insight being drawn from the culture chapter content, so that Figure 10.3 could be introduced to readers to better understand cultural learning complexity and the impact of the different learning styles of people on how they perceive learning. This could also help people to be better positioned to understand how best to frame their ideas when engaged in collaborative dialogue with others so that any re-framing may occur to enable co-creation of ideas rather than being coerced. Mechanisms and processes ensuring that an institutionalised IPD project culture supports collaboration were then explored. Primarily, badging, the ‘big-room’ concept and affiliation mechanisms were referred to, with an illustration of how an ambience for collaboration may be created. In response to research question 2, a number of mechanisms and processes to ensure that an institutionalised IPD project culture supports collaboration were examined. We conclude this sub-section by stressing that the professional culture is found in not only professional project participants such as engineers, designers and managers but also by the workforce and is typified by: 1 2 3 4 5

A mindset that sees ‘success’ in terms of producing a high-quality product/service above making money as profits or fees. This may be described as a best-for-project mindset. A desire and ability to pursue learning and expertise development. A desire and ability to undertake continuous improvement and innovation. Recognising that value systems between the project teams that are integrated in IPD projects do vary and that some adjustment is required to form a hybrid culture. That all teams have different but interdependent expertise and so collaboration is pursued on a low power-knowledge-information asymmetry basis.

Furthermore, with respect to identifying collaboration-enabling process and behaviours, the Collaboration Framework elements directly relating to enabling collaboration and integration through the workplace culture are summarised in Table 10.2.

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IPD from a culture perspective Table 10.2  Workplace cultural-related Collaboration Framework elements Collaboration Framework elements

Workplace cultural influences

Element 2: Joint governance structure Element 3: Integrated risk mitigation and insurance Element 4: Joint communication BIM, etc. Element 5: Substantial co-location Element 6: Authentic leadership

Hybrid cultural adjustments as discussed above and by Matinheikki et al. (2017; 2018). Integrated and joint-risk appetite and collective view on risk and uncertainty-mitigation approaches. Integrated digital workplace facilities with low knowledge and information asymmetries. Comfort with and acceptance of ‘big-room’ with both face-to-face and high-level virtual contact. Importance of leadership being shared and both horizontally as well as vertically integrated to all expert and evidence-based decision-making and action. High trust between participating teams and individuals based on demonstrated acceptance of responsibility and accountability and cognisance of the governance frameworks. Workplace culture as a liberating force for exploring ideas and challenging assumptions to develop innovative approaches. Solidarity and agreement on the project outcome value generation having a dominating priority status. The workplace as the foundational support for experimentation and learning depends upon acceptance of unanticipated consequences and failed experiments that need to be openly investigated to enable improvement. No-blame and no-guilt depends upon consensus on strategies and tactics to obviate shirking and backbiting. Following the above two elements, innovation and learning are a means to an end. The improved creation of value and benefit.

Element 7: Trust–control balance Element 8: Commitment to innovate Element 9: Common best-forproject mindset/culture Element 10: No-blame culture

Element 11: Consensus decision-making Element 12: Focus on learning and continuous improvement Element 13: Incentivisation

Element 14: Pragmatic learning-in-action

Element 15: Transparency and open book Element 16: Mutual dependence and accountability

The workplace culture should support reward and penalties being fairly shared through a culture of ethical and just treatment of all by all participants. The workplace culture needs to take a pragmatic stance on decisionmaking and action. Acceptance of no-blame and consensus decision-making allows rapid assessment and fine-tuning of action. This is particularly necessary in complex and chaotic domains (Kurtz and Snowden, 2003; Snowden and Boone, 2007). Trust, commitment and willingness to innovate and justly share gain and pain depend on transparency and openness. Both integration and collaboration depend on all parties recognising their mutual interdependence.

Table 10.2 illustrates how central the workplace culture is in enabling collaboration to flourish and for the benefits and value that it may unleash to be realised. Almost without exception, from the 50 or 60+ alliance professionals that we have interviewed for research projects on IPD forms, we have had unsolicited comments that the workplace culture in IPD, particularly alliance projects, is designed and developed to make collaboration happen. Also, experts we have interviewed

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have volunteered opinions that alliance/IPD types of projects are highly satisfying to work on because they have personally felt that they could truly make a difference to the project outputs and outcomes. While many of those we refer to did not couch their comments specifically in terms of Figure 10.2, they used terms synonymous with feelings of work meaningfulness, sense of responsibility and having high-quality feedback on their work extrinsically as well as intrinsically.

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11 KNOWLEDGE, SKILLS, ATTRIBUTES AND EXPERIENCE (KSAE) FOR IPD-ALLIANCING TASK MOTIVATION Derek H. T. Walker and Beverley Lloyd-Walker Introduction This chapter focuses its discussion on the talents and human-capital contribution made by teams engaged in integrated project delivery (IPD) and alliancing projects in particular, (henceforth we refer to IPD alliance). It is concerned with defining and discussing the desirable qualities that people working on IPD-alliancing projects need. The way in which those qualities are developed is the subject of the following chapter. This chapter presents the ‘what’ and ‘why’ story while the next chapter discusses the ‘how’ story. Selecting people with the right skills, knowledge, attributes and experience (KSAEs) is very important to enable positive and successful project outputs and outcomes. It is also important to understand how to create a workplace atmosphere that supports people to effectively use their KSAEs. Chapter 12 discusses the ‘how’ story in terms of staff recruitment and development and Chapter 10 explains IPD-alliance workplace culture aspects to add further to our understanding of the ‘how’ and ‘why’ story as context for this chapter. Recent interest in achieving enhanced project delivery productivity has shifted the debate from one of needing to simply engage ‘the right people’ with the ‘right’ skills, knowledge, attributes and experience (KSAEs) to deliver excellence on projects, to one of developing organisational forms that create supportive and enriching workplace environments that enhance the likelihood of excellent project outcomes. Projects are delivered by people working within a particular context; a context that influences the extent to which they are empowered and motivated. This context shapes their performance in orchestrating the technology, materials, and organisational systems to work productively with their co-workers. This provokes an interesting new set of perspectives to apply to investigating the lived experience of working in highly collaborative project delivery arrangements. It helps re-examine questions about how having ‘the right people’ may be achieved within integrated project delivery (IPD) and, in particular, alliancing organisational arrangements. Elements of institutional theory are used to help explain how an IPD context may moderate the way that workers in these projects experience the meaningfulness, purpose and feedback on the outcome of their efforts to influence their perceptions of their contribution to the project outcome.

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Two questions arise from the perspective taken on IPD in this chapter. 1 What knowledge, skills, attributes and experience (KSAE) best equip collaborative team members in IPD projects to effectively contribute to excellent project outputs and outcomes? 2 What impact does working in a collaborative IPD-project environment have on the potential effectiveness of team members to best deploy their KSAE human-capital resources? This chapter links to others in this book that interested readers may wish to read. Chapter 2 presents and explains the Collaborative Framework and provides a summary of the 16 elements of that framework and so that chapter sets this chapter’s focus in context. Chapter 5 discusses the role of the client. It should be noted that the project-owner participant (OP) in an alliance, and other IPD forms, should also share similar KSAEs to non-owner participants (NOPs) to contribute to the united team effort required of alliances. The KSAEs of project participants enable them to collaborate within a workplace culture of trust and commitment (see Chapter 13) to be able to effectively engage with stakeholders (see Chapter 14) and to be creative and innovative (see Chapters 8 and 18). Their KSAEs should also enable them to ensure that projects are effectively governed (see Chapter 19) and to work and behave in an ethical manner (see Chapter 23). We will see in the following chapter (Chapter 12) how the human resource perspective of undertaking IPD-alliance projects is supported. This chapter is structured as follows. First we briefly discuss the concept of KSAEs to provide a common-language basis for the chapter’s discussion and how that fits with other chapters in the book. We then discuss in more detail research that we undertook on KSAEs of alliance managers that we found was also applicable to other project participants in the shared leadership environment characteristic of IPD and alliances in particular. We then devote the rest of the chapter to a discussion on the impact that IPD-alliancing has on the way that participants may view their work and that may explain why this form of project delivery has been found to be a successful form in Australia (Wood and Duffield, 2009; Walker et al., 2015). We conclude by summarising the chapter.

KSAEs in brief The stated purpose for forming a project alliance is to achieve best value for a range of stakeholders involved in the delivery and use of project outcomes. It is argued that if the best team available is chosen, energised to be committed for best-for-project outcomes, assembled and adequately resourced by a project owner, then it is likely to deliver best-value outcomes for a broad range of project stakeholders (Department of Infrastructure and Transport, 2011a). This ambitious aspiration requires high levels of KSAE from not only alliance managers (AMs) but from all team participants. This is because IPD, and alliancing in particular, is characterised by a shared or distributed leadership approach. This leadership model is appropriate in workplace environments in which there is low power and knowledge/information asymmetries (Lloyd-Walker and Walker, 2011). The leadership style, sometimes referred to as balanced or distributed leadership, distributes temporary vertical and horizontal levels of authority so that expertise becomes the primary logic of who is positioned as temporary leader. Often consensus decisions are made based on dialogue (Senge, 1990; Senge, 2011) within a no-blame workplace environment (Lloyd-Walker et al., 2014). The KSAEs required of people within a collaborative IPD project provide a different emphasis than that of traditional competitive business-as-usual (BAU) projects. The emphasis for IPD and alliancing is highly focussed on ‘soft people-related’ skills to encourage, enhance and shape

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collective action. BAU approaches tend to value a commercial profit-dominated technical or business command-and-control emphasis. We do not dismiss the BAU logic as being redundant or inferior to the IPD logic but merely stress the point that the project output and outcome expectations are different for these two ends of the project-delivery-approach spectrum. This book is focussed on IPD so we therefore position our arguments and discussion on KSAEs required for highly collaborative and integrated-team project delivery forms. Rather than provide a detailed literature review to support the basis for KSAEs that we argue are necessary for IPD-alliance, we refer to previous literature reviews of two research studies undertaken by us that interested readers can refer to. We introduce additional concepts and discussion of literature in the following sections that have not previously been published. Study 1 was undertaken in 2010, involving recorded face-to-face semi-structured interviews of between 60 and 90 minutes. It was exploratory and adopted a grounded theory approach. Transcripts from 22 alliance expert practitioners were analysed to investigate the KSAEs of alliance managers working on alliance projects; mainly in Australia but also in New Zealand. Findings were published online in two volumes. Volume 1 (Walker and LloydWalker, 2011a) reports on the study’s purpose, aims, research questions, supporting literature, research approach and findings. Volume 2 (Walker and Lloyd-Walker, 2011b) provides details on the analysis of data gathered to explain the coded structure that provided the interpretation presented in Volume 1. It also provided selected quotes from the interviews used to support the coded-structure findings. Study 2 built upon Study 1 findings but also investigated other associated research questions using the same research protocol. This study was undertaken between 2012 and 2013. It comprised a literature review and interviews with 50 subject matter experts, 14 leading academic experts in the area and 36 expert practitioners, mainly from Australia but also the UK, the Netherlands, France, Sweden and Finland. Research findings were published that included extensive quotes (Walker and Lloyd-Walker, 2015). Analysis of interviewee quotes illustrated high-level KSAE thinking required for successful alliancing. The KSAEs were categorised as technical and project management (PM) KSAEs, business solution KSAEs and relational KSAEs. Based on findings from these two studies and the literature review into KSAEs undertaken on both studies, we summarise key supporting theoretical literature on developing KSAE concepts. In Chapter 1 of this book, we outline seven reasons why IPD-alliancing may be an appropriate delivery form. It rationalises alliancing as best suited to cope with several elements of complexity. Highly complex projects are characterised by: •• •• •• ••

Lack of clarity about latent contextual conditions such for construction ‘brownfield’ projects that triggers technical complexity around undertaken known technologies in highly uncertain contexts or how to apply technology innovation; Uncertainty or blindness (the unknown unknowns) with respect to dynamic interactions between systems and their environments; Difficulties in interpreting and human (stakeholder) actions, reactions and attitudes; Dynamic, or poorly understood, somewhat stable, economic business or political forces and their impact upon project plans and actions (Kurtz and Snowden, 2003; Geraldi and Adlbrecht, 2007; Cooke-Davies et al., 2011; Remington, 2011).

KSAEs in this chapter’s context relate to how team participants respond to complexity and how their dynamic capabilities of resilience and confidence may be used to cope with unforeseen consequences to ‘steer’ planned actions towards the project’s objectives.

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Skills and experience using augmented digital technologies, i.e. artificial intelligence (AI), robotics and collaborating crossgenerationally to optimise the use of digital technologies (Arup, 2017; Jacobs et al., 2017; Walker and Lloyd-Walker, forthcoming).

IPD-alliance project work is generally non-routine and involves many deviations from the plan, requiring strategic thinking to ensure that plans and actions are steered towards the project goal. This requires continual reflecting on what worked or didn’t work in the past and why that occurred. Pattern-matching to cope with the unexpected and minor or major deviations is often experienced by team members, so their reflective capacity and ability is vital. Recent literature on the future of work and the workplace highlights that there will be an acceleration in current rates of disruptive digital technology innovation involving the application of AI, augmented use of robotics and other digital aids that will reshape workplace needs. It is argued that this will require greater integration of teams in delivering projects and closer collaboration between generations and between people and robots. This will demand new and emerging skills and knowledge to cope and work with these disruptive technologies.

Much has been written on emotional intelligence and its link to leadership and followership traits, attributes and behaviours. In IPD the need to engage in dialogue is essential. Senge (1990; 2011) notes that dialogue is not about pushing a particular agenda or advocating ‘the’ solution, rather, it is about people discussing issues from their perspective so that a shared understanding may lead to a solution that perhaps neither party had initially considered that may be superior to preconceived ideas or templates.

Team members need the requisite technical KSAEs to be able to offer perspectives and deep knowledge about potential system interactions when planning and when making decisions to continue with planned action or when coping by adjustment or re-framed plans and actions. They also need business skills to understand the commercial sustainability of proposed actions: how to develop and interpret a business case, for example. They also need the ‘soft people skills’ because in IPD the emphasis is on influence and competence by understanding and valuing the potential contribution that others can make. KSAE maturity may be assessed and categorised along a logical continuum. This ranges from novice levels where only ‘by the book’ approaches are considered, to the ‘virtuoso’ level, fully appreciating situational nuances and subtleties to refine a search area when suggesting solutions to complex problems and situations. This area of study is broad and deep. We identified a range of early classical theoretical and empirical study work on the nature of decision-making from as early as the late 1970s to recent work. A significant body of literature exists about attributes and behaviour of people when faced with a paradox or uncertainty, as well when they may take a mechanistic approach to complicated but well-known stable situations and contexts. IPD projects are typified by precarious situations where resilience and imagination are required.

‘Hard’ technical and business balanced by ‘soft people-related’ skills (Crawford and Pollack, 2004; Stevenson and Starkweather, 2010) (Office of Government Commerce, 2007; Crawford et al., 2006; Muzio et al., 2007; Morris and Geraldi, 2011; Morris, 2013).

KSAE competence maturity to gauge how well developed and mature individual skills are (Cicmil, 2003; Dreyfus, 2004). Decision-making under uncertainty (Lindblom, 1979; Argyris, 1982; Dietz and Burns, 1992; Kurtz and Snowden, 2003; van Bueren et al., 2003; Ahlstrom and Wang, 2009; Bourgault et al., 2009; Whitty, 2009; Kahneman, 2011; Mullaly, 2015; Stingl and Geraldi, 2017). Perception-taking and open mindedness in being able to listen to others and empathise to appreciate their perspective (Parker et al., 2008). General emotional intelligence (Goleman et al., 2004; Turner et al., 2009; Love et al., 2011). Experience as self-reflection rather than a temporal concept (Daudelin, 1996; Gladwell, 2000; Dreyfus, 2004; Winter and Thomas, 2004; Söderlund et al., 2008).

Relevance to this chapter

Salient literature examples

Table 11.1  Salient literature for KSAEs in IPD projects

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After analysing the data from Study 2 (Walker and Lloyd-Walker, 2011b) the following AM categories of KSAEs were identified. The nature of IPD-alliance projects and the shareddistributed leadership of the alliance management team (AMT) results in a need for all participants in that team to attain KSAEs that range from a baseline entry level to that of a mature experienced high-performance level. It can be argued that a team with a majority of members who can operate at the highest level will likely perform at a superior performance level. Data gathered from interviews with alliance managers in this study suggests that most teams comprised people with varying levels of KSAEs that prepared them for exceptional alliance performance. Many of the teams had some participants who may have had BAU-level KSAEs but had yet to fully grasp the culture and mindset to fully operate at the high collaboration levels of an alliance. These team members were on a learning curve and were being coached, mentored and provided with role models to help them attain high-level alliance KSAEs. It is important to note that no one person is likely to have exceptional levels of KSAE for each and every element described in Table 11.2. This is why the distributive or shared/balanced leadership model operates effectively. Those with the highest level KSAE for a given element below would often take temporary leadership of the team, resulting in leadership resembling a batonpassing exercise. That said, this model of leadership allows the AM to delegate leadership at a technical or business level for a temporary leader to assume responsibility and accountability for their influence on the team. Consensus decision-making by the AMT shared that ultimate accountability and responsibility because each member of the team was also responsible for challenging assumptions and ensuring that issues were as clear as was practicable. KSAEs discussed below relate to identified authentic leadership of project teams (Toor and Ofori, 2008; Lloyd-Walker and Walker, 2011). We return to Study 2, briefly described in this section. Reflecting on the above description of KSAEs, the reader may wish to apply these insights into benchmarking KSAEs or using this knowledge for undertaking a KSAE health check, for example, on an alliance project. We therefore refer readers to the Study 2 detailed results (Walker and Lloyd-Walker, 2015, pages 167–223). Each Collaborative Framework’s 16 elements is analysed in that book with details presented on measures that enable KSAE benchmarking. We provide one example of the Collaborative Framework’s 16 elements KSAE-benchmarking measures as an illustration in Table 11.2. Interested readers may wish to follow up on the KSAEs measures for all Collaborative Framework elements and sub-elements. The sub-element we have selected as an illustration in Table 11.2 is for Element 7, Sub-element 3, ‘Safe Working Culture’. The KSAEs for this example relate to physical safety, which has numerous specific technical requirements for various industry sector projects as well as psychological aspects relating to enabling collaboration through challenging the status quo, or when re-visiting and questioning plans if the context appears to be changing from that originally assumed. We provide an example of how KSAEs may be analysed for benchmarking or health checks (Source adapted from: Walker and Lloyd-Walker, 2015, p188). In this section we addressed the chapter’s first research question: What knowledge, skills, attributes and experience (KSAE) best equip collaborative team members in IPD projects to effectively contribute to excellent project outputs and outcomes? These KSAEs are required of the AM and AMT members. The process for choosing an alliance syndicate is predicated on syndicates demonstrating that their teams possess these KSAEs, by providing evidence and concrete examples of their application (Auditor-General of the Australian National Audit Office, 2000; Department of Infrastructure and Transport, 2011a). Additionally, we argue that these KSAEs allow organisations to learn from the past and intelligently anticipate and plan for the future. This is because these KSAEs have a strong focus 223

  3 – Business skills and experience. Understanding the strategic purpose for the project’s expected output and outcome. Projects exist for a purpose; that purpose may be described as the ‘business’ and not be limited to commercially oriented ‘business’ but include other forms such as government business, disaster-recovery business, research and innovation output business etc.   4 – Reflectiveness. Being a systems thinker, strategic in the think-aim-act versus act-think-aim. Reflectiveness is about people understanding the context and knowing the context is the key when self-analysing situations in terms of outputs, outcomes and likely consequences.   5 – Being pragmatic. Being able to get on with the job, being politically astute to make appropriate and defensible compromises, and working within known constraints. Pragmatism is also about balancing the understanding of signals from a cognitive as well as emotional perspective.

Interpreting and re-framing rules to suit the context and the way in which action is justified is central to being pragmatic. The IPD-alliancing form encourages ‘blue-sky thinking’ and challenging the status quo. It may be pragmatic to take additional time to re-think and re-visit a design idea or delivery plan if there is justifiable doubt about its suitability for a given context, rather than press ahead while feeling uncomfortable about the potential risk of doing so.

Reflectiveness is central to project work in complicated or complex situations where there is uncertainty about how systems and dynamic elements interrelate. What may work perfectly in one situation may be disastrous in another. Reflecting is also about mentally exploring and modelling plans and actions to anticipate what may turn out to be an unexpected consequence.

Qualifications and professional recognition shape the influence and authority of the AM and members of the AMT. The AM often does not have expertise in every technical matter involved in project delivery but should have sufficient skills and knowledge to recognise the expertise and limitations of others in the team and to encourage and nurture collaboration. The AM, and team members that temporarily assume leadership, should possess the necessary PM expertise required to effectively manage the project delivery process. These would include ‘hard skills’ being proficient in applying PM tools, techniques and methodologies as well as having ‘soft people skills’ to effectively engage with stakeholders and make ethical choices. Understanding the fundamental purpose of the project is essential, otherwise the team may be distracted to follow an agenda of producing the most aesthetically pleasing, technically clever or most beneficial solution to peripheral rather than identified core stakeholders. These skills help answer the question ‘why are we doing this project?’

  1 – Technical skill and experience. Possessing requisite qualifications and experience is central to the professional field that forms the core of the project.

  2 – PM skills and experience. Having the expected general skills and competencies is required of any project manager/leader.

Relevance to this chapter’s focus

KSAE and description

Table 11.2  KSAEs for the alliance manager and delivery team participants

  8 – Being wise. Demonstrating wisdom through being the person with opinions and advice that are valued, consistent and reliable and that others instinctively refer to. Wisdom links to thinking through implications from a variety of perspectives, weighing and balancing often conflicting evidence and advice.   9 – Being spirited. The attribute of spirit or courage is an important attribute that suggests a willingness to challenge prevailing assumptions when a niggling doubt may exist. Challenging the status quo is also valuable in developing creativity, as discussed in Chapter 8. 10 – being authentic. Approachable and trustworthy and being seen as open to ideas, collaboration, discussion and new ways of thinking. Authenticity is being consistent through acting in accordance with espoused values.

  7 – Being resilient. Demonstrating adaptability, versatility, flexibility and persistence. It also means being able to effectively learn from experience.

  6 – Being appreciative. Understanding the motivations and value propositions of stakeholders. This attribute includes empathy, having the ability to appreciate and accept another’s perspective as being valid for them the way that they may interpret the context. This attribute also suggests high levels of emotional intelligence.

IPD-alliancing for complex projects requires bravery and courage to engage in ‘blue-sky thinking’ and trying new approaches that may be innovative and improve efficiency. Being courageous also means sticking to one’s values when a dangerous compromise is contemplated. IPDalliance projects tend to be highly accountable to society. This attribute helps to guard against ill-advised convenient shortcuts being taken. The foundation upon which IPD-alliance teams collaborate and reach agreement is based on trust. It is therefore vital that the AM and team participants maintain their integrity and live by the values they espouse. One important selection criterion for being in an alliance team is demonstrating integrity.

IPD-alliancing requires of leaders and team participants an ability to plan and take action while judging the most effective response to colleagues and other proximal as well as distal stakeholders. It is about their recognising that value is the key in influencing others and being influenced. Value and values are fundamental elements that impact workplace culture; being appreciative means respecting diversity of views and differences in preferred approaches. It is also an essential attribute to be able to undertake a constructive dialogue with others rather than either forcing a viewpoint or advocating a position blindly to ‘win’ an argument. The need for cross-generational appreciation abilities is becoming more critical as more digitally disruptive technologies become more commonplace because older generations may need to learn from young ‘digital natives’. Young project team workers need to be appreciative of the broad experience of dealing with change that an older generation of workers may have, as well as a pragmatic attitude to technology and its effective usefulness. An IPD-alliancing approach is often taken because of uncertainty and riskiness surrounding the project. Coping with complicated or complex projects requires experimentation and a trialand-error approach. This means that plans are seen as targets and that they should be used as beacons to steer towards even if that means side-tracking. Thus resilience is a vital attribute for AMs and team participants. Often the wise path is the ethical path. IPD-alliancing in construction infrastructure delivery, as is discussed in great depth in Chapter 23 in this book, is about delivering value to both a targeted stakeholder group as well as society at large. Wisdom in teams helps them make sustainable choices and minimise the chances of adverse unforeseen complications and problems.

Description

Notes on how this may be used for benchmarking and health checks

Project participants’ trust in their leaders is often mediated by their Benchmarking may be undertaken through comparing projects perceived treatment in terms of working in a safe physical, psychological within a program of work. and intellectual environment. All infrastructure engineering projects Health checks may be useful as part of normal monitoring processes have an emphasis on a physically safe workplace but a safe psychological or if investigating why observed team trust may be higher than and intellectual workplace is also essential to foster trust and innovation. expected or if it is observed as being lower than expected. This can provide a powerful means to monitor collaboration. Examples of •• Understanding that a physically safe workplace culture emphasises the Most construction projects in Australia and New Zealand have high importance of not exposing people to risk of physical injury. stringent physical safety monitoring already. levels of safe •• Understanding that a psychologically safe workplace culture emphasises The second two bullet points may be particularly useful for workplace the importance of not exposing people to risk of feeling inferior, monitoring and ensuring that the KSAEs above support and culture inhibited, and constrained in a particular behavioural direction. enhance the trust within teams and between the alliance team and thinking •• Understanding that an intellectually safe workplace culture emphasises other stakeholders. It also suggests that this may be useful as part the importance of allowing people to challenge ideas and to even offer of a health-check monitoring system for innovation and creative seemingly crazy suggestions that could be refined and developed. Thus, problem-solving. avoiding inhibiting people from experimenting and making mistakes that they and others may learn from. High-level Technical and PM KSAE – High levels of understanding and knowledge of Benchmarking or health checks could be developed by creating a KSAE the implications of technology and methods on potential risk of injury. set of maturity scenarios to describe what, for example, ‘low’, needed for safe Business solutions KSAE – High levels of understanding of the advantages ‘medium’ and ‘high’ may look like. workplace and disadvantages of physical, psychological and intellectual health of In creating those scenarios it might be possible to describe what ‘High cultures workplace environments to achieving long-term business success. levels of understanding . . .’ may be operationalised. Alternatively, Relational KSAE – High levels of interpersonal KSAE to communicate surveys could be constructed to measure variables for these KSAE and influence others about the value of creating and maintaining scales if that were deemed an appropriate way to understand how appropriate behaviours to balance trust and control of the workplace teams operate and what KSAEs they use and how they use them. environmental conditions. Illustrative ‘I think the solution lies in design thinking, because design thinking is about This quote illustrates a number of KSAEs that can be identified in the quote from bringing people with very different mindsets together and to deal with chapter. One way of benchmarking or undertaking a health check research problems as a design issue. So typically you’ll have design that happens at is to collect quotes from alliance participants and analyse them interview the front end; you do it and then you might have a bit of design at the to determine the KSAEs that relate to them and what might be A09 end to make it look pretty. The design thinking says the design happens expected to be seen for high, medium and low levels of KSAE, or the whole way through, and it’s not just the designer that needs to think when constructing a survey instrument to monitor KSAEs. like the designer, you know? So it’s about how you get people together to sort of make sense of problems, and collaborate to create the solution’.

7.3 Safe workplace culture

Sub-element

Table 11.3  Collaborative Framework element 7, Sub-element 3, KSAEs Safe Working Culture

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on: reflection on context; seeking agreement by consensus; valuing the expertise and ideas of others who constructively engage in dialogue; and a way of thinking in systems terms for holistic solutions to problems, challenges or dilemmas. Having identified and discussed the nature of KSAEs required for IPD-alliancing teams we now address research question two: What impact does working in a collaborative IPD-project environment have on the potential effectiveness of team members to best deploy their KSAE human-capital resources?

The IPD-alliancing impact on team participants’ view of their work The previous chapter sections, and other chapters in this book, have stressed the stark differences between BAU and IPD-alliance projects and the KSAEs required of project teams delivering them. We also started this chapter by stating that IPD-alliances seek people with the ‘right skills’ to work on them. The previous section was more specific in explaining what skills are ‘right’ to fit the project delivery mode. It did not explain why or how these KSAEs were a good fit for IPD-alliancing and why they may lead to more frequent project delivery success than BAU using BAU KSAEs. Two contextual aspects are focussed on in this section. The overall organisational context is investigated in terms of the business environment in which the project takes place and how it contributes to facilitating the conditions that give people the sense of freedom and meaning in their work to motivate them. A micro-task level analysis investigates the way that jobs and various tasks and routines are understood by workers in this environment. This leads to an improved understanding of how workers within this context infer meaning and purpose, based on their values, that drive them to collaborate and strive to give their best efforts to the project. Much has been written on project delivery performance and how excellence may be achieved through selecting an appropriate project organisational form (for example see the literature review undertaken by Naoum and Egbu, 2015). It becomes clear from that body of literature that the selected organisational form needs to encourage and support people to ensure that they steer their way through the many project challenges. This is particularly true for complex projects where many countervailing factors and relationship dependencies exist. Effective collaboration between people in project teams aimed at achieving the desired outcome becomes a key factor in determining the project ‘success’ level. Thus, for project forms within which collaboration may not be stressed as a working model, such as the traditional BAU constructiondesign-bid-build approach, there will inevitably be projects where high levels of collaboration are used to overcome a range of contextual challenges (McGeorge and Palmer, 2002). Project alliances (PAs) are at the far end of the collaborative process scale for construction projects. They ensure that people collaborate and work as a single cohesive team to overcome challenges and to offer innovative solutions to specifically recognised problems. This leads to a need to focus on how people might be encouraged and supported to see the advantages of collaboration in overcoming the many challenges encountered on complex projects. This is particularly relevant across the infrastructure construction projects currently being delivered within Australia and other parts of the world. The idea that ‘soft’ or ‘people’ skills are required to achieve successful outcomes has been raised and in part explained in more general project terms (see Crawford and Pollack, 2004; Muzio et al., 2007; Skulmoski and Hartman, 2010). Results from the in-depth study of 22 Australian alliance manager practitioners on construction projects referred to in Study 1 revealed a set of KSAEs that help explain how collaboration performance might be enhanced (Walker and Lloyd-Walker, 2011a). Study 2 (Walker and Lloyd-Walker, 2015) provides further detail of required KSAEs. What has been missing to enhance a focus on 227

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understanding how KSAEs may be effectively applied is a more comprehensive mapping of the interaction between a project’s context and the motivational propensity and capability of project team members to effectively collaborate. This section contributes that understanding of how the project delivery environmental context leads to people experiencing a more meaningful and personally rewarding, motivational attitude towards their work, which in turn triggers superior project delivery outcomes from the BAU context. We use several theoretical lenses to re-analyse the two research studies’ data that provide quotes from over 50 practitioners to illustrate how the project- and work-characteristics context impacts worker motivation, allowing them to operate with their best efforts, energy and abilities. The focus of our theoretical lens for this section concentrates on: 1) The general organisational context and how an integrated project delivery (IPD) form provides a markedly different contextual setting than a BAU one; 2) How this may change the way that those working within this context might perceive the value they may contribute to a successful project outcome through their job and their tasks/routines.

Contextual influences We concentrate on two levels of context: the organisational-level context and the individuallevel context. Johns (2006) differentiates two context concepts: ‘omnibus’ (macro-level) and ‘discrete’ (micro-level), that he draws from his review of a rich management literature on the meaning and sense of the term ‘context’. He concludes that context has discrete micro-level elements, enveloped within an overarching concept of context. Omnibus macro-level context: Johns (2006, p391) defines the term as ‘an entity that comprises many features or particulars’. Thus, it refers to context as broadly organisational considering the overall context that affects workers engaged in the project. This would include such features as global competitiveness and how that affects the selection and deployment of teams to a project. This brings added complexity of cultural norms and diverse approaches to business processes used on a project. Data drawn from the two alliancing studies indicate that teams are usually substantially co-located at the project site. International and local/regional alliance participants engaged in the project either maintained their staff on-site or sufficiently close by to keep an office within reasonable travel distance to the site. This presented a potential cultural-diversity contextual complexity challenge from national and organisational culture perspectives. Other omnibus or overall contextual issues arise from the use of information computer technology (ICT) systems. Different organisations may favour different systems and these may exhibit conflicting attributes. Further potential complexity issues may be presented by the pace of adoption of ICT and other digital economy disruptive technologies such as AI, and its rapid deployment with system upgrades and changes, and any lack of familiarity of its use by people engaged in a project. These are somewhat general contextual issues for all organisations that are brought together for a project and which a project team faces regardless of the project delivery form. However, when ICT is intended to be used to seamlessly link different organisations of project participants to communicate, plan and act as a single team, then integration and alignment of ICT systems presents a real challenge. Understanding the local regulatory framework also presents a contextual challenge for separate organisations working together on projects. Regulatory issues may include such aspects as occupational health and safety, the natural environment considerations, and employment norms 228

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and practices. A host of other governance aspects also present contextual complexity for projects where diverse organisations form consortia to deliver projects such as construction projects. There may be many overarching omnibus context issues faced by project delivery teams in which the external world exerts constraints and offers advantages that individuals or organisations cannot control but can only react and respond to. One of the features of IPD-alliancing is the concept of participating organisations integrating their systems, routines and work approach so as to act as if they were a single integrated team (Ross, 2003; NASF et al., 2010; Department of Infrastructure and Transport, 2011a). Thus, omnibus or macro-level contextual factors impact on how the meaning and autonomy of work and tasks undertaken may be perceived by people engaged in project work. Discrete micro-level context: Johns (2006, p391) defines the term as ‘the particular contextual variables or levers that shape behavior or attitudes’. In this paper we focus on the work/task context that influences worker behaviours and attitudes towards being motivated and committed to put in their best efforts in delivering project outcomes. This brings us to the second theoretical lens that we use to re-interpret data from the two research studies.

The Job Characteristics Model (JCM) The Job Characteristics Model (JCM) was developed by Hackman and Oldham (1976) over 40 years ago. It posits that five job characteristics – core job dimensions – lead to worker-critical psychological states that trigger workers’ personal and work outcomes (1976, p256). Three core dimensions (skill variety, task identity and task significance) lead to the psychological state of experienced meaningfulness of work. An autonomy core job dimension leads to experienced responsibility for work outcomes. The fifth core job dimension, feedback, leads knowledge of the actual work outcome. Enriched job/task design and allocation based on this model is posited to enhance the strength of employees’ growth in skills. Therefore, workers feel more motivated and put more commitment and effort into their work, which contributes to a positive work outcome. The intended application of the model was for management to use these dimensions to guide the design of jobs that would motivate and engage workers, and lead to them experience job satisfaction. This, in turn, was expected to lead to high levels of productivity and reduced staff turnover. Forty years later, the model remains useful, but may be used now to support individuals or teams to craft their own roles, in a bottom-up rather than top-down manner. This can enable ‘employees to steer their work towards their passions and obtain more enjoyment and meaning from their jobs’ (Demerouti et al., 2015, p89). Within an IPD-alliance environment, where teams work cooperatively and collaboratively, such an approach has the potential to engage staff, and lead to the team crafting work to support project excellence, while addressing their need for challenge, learning, and job satisfaction. It may seem unwise of us to consider a model that is over 40 years old. However, Wegman et al. (2018) conclude, in reviewing the USA literature on job characteristics studies referring to the JCM, that the model remains generally robust and can be considered as still relevant and appropriate. They note, however, that the omnibus context of work has changed over the past 40 years with respect to ICT and other technology advances. Also, the impact of global competition has forced organisations to flatten their hierarchies and outsource specialised job activities. Work has potentially become more enriched and motivationally enhanced due to technological advances, because now workers potentially have greater clarity about how their efforts fit ‘the parts’ into the ‘whole’ of the project. Thus, potentially they receive clearer and immediate feedback about their contribution. 229

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The Wegman et al. (2018) study did not include reviewing any literature about IPD-project studies and is based on assumptions relevant to BAU organisational contexts. Their study was also confined to the context of the USA. They reviewed literature on the nature of work and how it is performed by conducting: a cross-temporal meta-analysis to examine changes in five core job characteristics (e.g., task, identity, task significance, skill variety, autonomy, and feedback from the job) as well as changes in the relationship between job characteristics and job satisfaction. An additional analysis of primary data is used to examine changes in two items related to interdependence. (2018, p352) An important theoretical point argued by Wegman et al. (2018, p352) is that the context of the workplace has been evolving over the past 40 years while at the same time the way that many workers perceive the nature of work, what is required of them, and what they are prepared and willing to do in their work, have also altered. In alliances these may be understood as institutional forces that direct a particular way of working. Those engaged in this work are influenced by discrete motivational factors, or characteristics, that they perceive as salient in their response to the institutional influences. The concept of institutional theory (Scott, 2014) being applied to the notion of omnibus factors is useful when combined with the concept of discrete factors, described as task and social characteristics that are within the control and influence of people. It helps to explain why, for example, many IPD-alliance projects may perform more successfully than various other project delivery forms and why, within that IPD-alliance category of project delivery, some projects perform better than others.

IPD implications for using the Job Characteristics Model (JCM) Scott (2007) may be considered a key figure in bringing the theory of how institutions and strongly held concepts are established, maintained and ultimately transformed. He argues that there are three ‘pillars’ that explain how behaviours, routines and ways of believing become established. The first pillar is the governance arrangements. These are the rules, regulations and formal ways of understanding how ‘things should be done’. This represents the ‘ought to’ influence. The second ‘pillar’ is the norms held by those engaged in the institutional setting. Norms are often tacit, and socially held, and may be seen as the culture that mediates governance and how rules may be interpreted. These are strong influencing forces because they strike at ethical interpretations of how to behave and react to situations (Buchholz, 1989; Ferrell and Fraedrich, 1997; Kvalnes, 2017). The third ‘pillar’ is the cultural-cognitive interpretation strength, that is: how people take the initiative and/or are supported to individually look into their soul, as it were, to reconcile their cultural norms from an individual, group and organisational perspective with what the ‘rules’ appear to suggest or demand. Omnibus factors suggested by Johns (2006) – the who, where, when, why, type issues, that were translated by Wegman et al. (2018, p354) as technological advances, globalisation, and flattened organisational hierarchies may be considered as complex interacting factors that influence how people enact a cultural-cognitive interpretation of how to behave. It becomes apparent that this third pillar requires a highly complex rationalisation ability. Changes in the social context at work, such as the changes observed in the social structure of work, interactions and interpersonal relationships, and how employees perceive these changes to have impacted on their work, could impact the usefulness of applying the JCM today 230

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within a highly collaborative and integrated work environment. Previously, change in the work environment occurring within collaborative forms of project delivery that have been observed (Walker and Lloyd-Walker, 2014) prompt a need to further explore work environment aspects. How does the social structure of work, for instance, within a collaborative form of project delivery vary from that within more traditional forms of project delivery? Answering this requires in-depth analysis of the way that work is performed, within a team, in IPD settings, and how that has contributed to the positive reactions of collaborative team members. This may lead to a better understanding of how the social context within which people are working, not just within the project team but the extent to which they are interacting with others outside the team, leads to high levels of motivation and commitment in delivering an excellent project outcome. Core job characteristics, originally identified by Hackman and Oldham (1976) can provide a useful way to understand the motivating potential of jobs. In particular, from the interview data quoted in published results from recent alliance research studies (Walker and Lloyd-Walker, 2011b; Walker and Lloyd-Walker, 2015), it became clear from further indepth analysis of quotes from participants’ interview transcripts that these quotes provide examples of their sense of autonomy and feedback. This feedback may have been provided by members of the team, the client, or from the public who were to be the beneficiaries and users of their output. This, in turn, might be providing project participants with feelings of having delivered a project that was valued by stakeholders; in other words they were experiencing task significance. Their project, and their job could had made ‘substantial impact on the lives or work of other people – whether in the immediate organization or in the external environment’ (Hackman and Oldham, 1975, p161). This observation provides encouragement to delve more deeply into the published data from those two studies. Re-analysis of the data revealed, across the many interviewed alliance project participants, a sense of growth or of the growth need that project workers may experience from working within this new form of project delivery. For that reason, the re-analysis focussed on what could be viewed as alliance project participants’ growth-needs strength. The job diagnostic survey instrument as used by Hackman and Oldham (1975) was not used but their model was used to make sense of the data. The re-interpretation of the alliance study data offers a better understanding of how IPD-alliance project participants perceive their roles and responsibilities, and how these perceptions may contribute towards what in alliance terms is viewed as a ‘one-team’ united culture. A united one-team culture is one in which participants from many different disciplines and various specialities combine with all others involved in the construction process. The high level of work interdependence (Wegman et al., 2018) that comes from the one-team environment demonstrated that this new way of organising work to deliver a specific outcome was, to some extent, a product of the overall changing work context. Collaborative teams that develop a oneteam culture also offer the potential for cross-discipline learning and skill variety. In this setting, individuals’ perspectives may advance to a point where they can see how they have become a vital part of a whole-of-project process (task identity). This is achieved through a social context in which the interdependence of the varied team membership encourages collaboration and respects the expertise and input of others toward the achievement of their goal. Thus, in an alliance construction project team, the various team members – client representatives, engineers, architects, construction managers – all become more aware of what and how their ‘work’ impacts on others. Those in the design teams may better understand the limitations of their project-owner representative’s ability to perceive design options. They may also become more aware of how the project delivery construction and specialised sub-contractors may perceive design option assumptions and requirements. In turn, this has the potential to significantly 231

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impact on how the team members communicate, collaborate and interact to help each other to better understand what each individual perceives to be ‘the truth’ of a situation. From this point, knowledge gaps can be identified, and assumptions challenged, providing valuable insights and assistance in solving any problems that may emerge. A major transformation may occur in the way that teams communicate and interact. Changes in work and the environment in which it occurs (Wegman et al., 2018) lead to observation of several forces occurring within IPD-alliances that may herald an explanation contributing to an alliance worker motivation model that may be more broadly applicable within any collaborative project context. Recent reports on the future of work projecting towards 2030 and beyond (United Kingdom Commission for Employment and Skills, 2014; Committee for Economic Development Australia, 2015) stress the importance of the future workplace being characterised by a far greater emphasis on work (business) being undertaken on a project basis where situations and solutions are ‘orchestrated’. This term is defined as follows. A new organisational paradigm sees companies increasingly defined as ‘network orchestrators’. The skills and resources they can connect to, through activities like crowdsourcing, become more important than the skills and resources they own. Collaboration in value creation networks is enabled by the virtualisation of business processes, fuelled by the rise of the digital economy. (United Kingdom Commission for Employment and Skills, 2014) Thus, a radical change in the nature of work is predicated; expectations evolve in which all project staff will be expected to contribute to a project-wide outcome and therefore understand each other’s limitations and capabilities to provide expertise. This will require what Grönroos (2011; Grönroos and Ravald, 2011) refers to as adopting a service-logic perspective. Projectification (Midler, 1995) is no longer a new term. It was created just over 20 years ago. It describes the new way in which work is being performed today and most likely into the future, not just in traditional project-based environments but across organisations, industries and sectors. Learning from construction IPD-alliancing may apply across workplaces in general where a service-logic perspective is needed. This, may present a challenge for the construction industry due to its fragmented nature and culture, which have been criticised for decades (Latham, 1994; Egan, 1998). Focusing on how engagement in IPD projects is perceived and what is expected of team members is important and a much neglected area of research. Reports such as those cited earlier (United Kingdom Commission for Employment and Skills, 2014; Committee for Economic Development Australia, 2015) stress the need for change to a work environment where team members work together collaboratively, but there is a paucity of explanations as to how this might be achieved. The re-examination of data reported upon in the two studies that were revisited in this chapter explores whether worker motivational forces present in collaborative project teams could be comprehensively explained. We concentrate on the strength of workers’ need to grow. This is explored from the perspective of increased social interaction on collaborative teams through: the opportunity for greater and more relevant feedback; learning; and a sense of task significance. These aspects are all made possible through the higher level of autonomy granted to not just the project leadership team, but all within it. This sense of autonomy and freedom to act (i.e. agency) is argued as being helpful to meet all project workers’ growth needs. Figure 11.1 illustrates a proposition that shows how workers’ performance is influenced by the omnibus macro-level context as well as discrete micro-level worker-motivation influences. 232

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Highly collaborative

Institutional situational influence on the project context Governance arrangements

Workplace norms

Worker’s culturalcognitive strength

Highly integrated

Discrete worker’s task motivational salience context

Omnibus context of IPD-alliance project work

Worker’s performance

Work/task contextual influence on the worker’s motivation Interpreted work meaningfulness

Skill variety

Task identity

Interpreted work responsibility

Task significance

Task autonomy

Interpreted feedback quality

Task feedback

Feedback salience

Figure 11.1  Worker performance model

The social context of work and the growth of interdependence within it draws upon institutional theory, the nature of context, and then on the tasks that are performed within that context. The top of Figure 11.1 illustrates the nature of the omnibus context. IPD projects emphasise collaboration between organisations participating in an alliance and their integration into what they will perceive to be a ‘one-team’ entity to deliver the project. These collaborative entities include: the project owner, the design team, often the facility’s operator, and the delivery team, including the main contractor and principal sub-contractors, e.g. the mechanical and electrical services and other specialist suppliers. IPD forms include alliances in Australia and New Zealand, Finland and the Netherlands, or the IPD as performed at its highest of three levels of integration (NASF et al., 2010) in the USA or in the forms evolving from the London Heathrow Terminal Five project delivery form (Davies, 2017). The overall context of the project can also be explained by institutional mechanisms that influence how governance arrangements are shaped and interpreted by those engaged in the project. These collaboration and integration features set the stage for an institutionalisation of the concept of alliance forms of IPD. Some limitations to the usefulness of the JCM today relate to the way that the world of business and commerce has evolved, the impact of globalisation and technological advances, changes in the way that people work, and changes in workers’ views of work over the past 40+ years. Largely, therefore, there have been changes in: the social context and in the interpersonal aspects of work; interactions between workers; and in the social structure of work itself (Wegman et al., 2018, p354). Applying these concepts to IPD is novel because to this point the nature of work within an IPD-alliance context has not been widely, if at all, considered. Institutional theory is one useful lens through which to view IPD-alliance worker behaviours. It may be combined with Wegman et al.’s (2018) extension to the long-standing JCM (Hackman and Oldham, 1975) to provide a complementary analytical lens to comprehensively reveal aspects of the work environment and the way work is performed in collaborative project forms. Changes 233

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in the work and social context, the work itself and the way it is structured, resulting in increased interdependence (Wegman et al., 2018) provide a useful way to explain why and how workers may be more motivated in collaborative IPD work that has been previously reported upon. Although all dimensions of the JCM may contribute to increased growth-need strength, analysis reported upon in this section concentrates on the job/task context, interdependence, autonomy and task significance. Not everyone wishes to exercise independence through deciding the actions they will take at work, or by learning to take on new and challenging roles with high levels of responsibility (Zargar et al., 2014). However, as demonstrated later using quotes from the data published in Study 1 and Study 2 (Walker and Lloyd-Walker, 2011b; Walker and Lloyd-Walker, 2015), team members in successful collaborative forms of projects appear to have high growth-need strength. Creating an environment in which this need can be met may lead to having the right people on the right project teams to support delivery of excellent projects. High levels of integration and collaboration in IPD-alliancing and an institutionalisation-theory perspective help us better understand the omnibus contextual characteristics that pose a stark difference between IPD-alliance approaches and more traditional BAU approaches for construction projects. Omnibus features of more traditional BAU project delivery approaches highlight competition not collaboration and differentiation into specialised segments rather than integration. KSAEs valued for BAU project delivery approaches may include aggressive competitive behaviour based on firm-specific competitive advantage features. Alliances accentuate sharing knowledge on aspects that may deliver competitive advantage to balance productivity across participating teams. They take the attitude that ‘a rising tide lifts all boats’ so that the whole project benefits from effectiveness of the whole and the harmonisation of capabilities rather than the efficiency of parts. Other omnibus contextual characteristics, such as the continuously evolving ICT world, have implications for KSAE values that may be explained by institutional theory applied to IPD-alliancing. The application of big data, digitisation for modelling, monitoring and surveillance in alliances may be effectively dealt with by crafting the governance arrangements to encourage adoption of ICT and digital working approaches. Norms may be addressed through education and mentoring and training. This is common within IPD-alliance approaches where cross-team and inter-disciplinary knowledge transfer is culturally anchored in. With better access to knowledge and experience through cross-team and cross-disciplinary collaboration, people are better equipped with KSAEs to cope with disruptive technology such as that emerging in the ICT arena than they would when engaged in a non-collaborative competitive workplace. Large differences between the discrete-task motivation-salience context, required in IPDalliance approaches when compared to a BAU traditional project delivery approach, is suggested by Figure 11.1. Interpretation by individuals in IPD-alliancing projects of what they perceive is expected of them (skill variety, task identity and task significance) in light of the autonomy that IPD-alliancing affords them, together with the nature of feedback (task and its salience) are likely to be quite different between a collaborative-integrated versus a competitive and segmented project delivery context. IPD-alliances people are encouraged to expand their horizons, abilities and competencies. However, this may be both confrontational and frightening to those with perfectly adequate KSAEs to cope in a traditional BAU project delivery approach. For example, openly sharing unintended and perhaps adverse consequences of experimentation and trying something innovative are dangerous unless they are undertaken within a no-blame environment (Lloyd-Walker et al., 2014). Having KSAEs that relate to high levels of empathy, supportive behaviour and emotional intelligence may prove a distraction in the BAU context where KSAEs that merely focus on the task in hand are valued. 234

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Findings and discussion Two main findings emerged from re-analysis of available published quotes from the two research studies. The first was that the role of context had been under-explained in the previous studies. Study 2, for example, had used the Wittgenstein’s family resemblance model concept (Nyström, 2005) as its logic for identifying framework elements and sub-elements, along with Jacobsson and Roth’s (2014) conceptualisation of partnering as a potential engagement platform requiring (1) platform facilities, (2) behaviours and (3) processes, routines and means to explain the context of alliancing and from that infer what KSAEs would support identified framework elements. On reflection, consideration of institutional theory (Scott, 2012;2014) provides a more powerful and fine-grained explanatory power about the context of alliancing and leads to a more comprehensive indication of required KSAEs that may be appropriate. The institutional perspective improves our understanding of how governance arrangements of alliances and other high-level IPD forms link norms and cultural-cognitive practices to required KSAEs. Johns’s (2006) perspective on context as having omnibus and discrete elements helps to separate and unbundle the process of mapping KSAEs required for IPD-alliancing. Re-analysis of Case Study 1 and 2 data using institutional theory supports the chapter’s conclusions because it fits well with explaining workers’ psychological states and how they perceive they can make a contribution to a successful project outcome. The aim of this section of the chapter is to focus on the contextual characteristics of these collaborative forms of project delivery and how they motivate, enable and energise people to be prepared to give their best effort and commitment to make the projects successful. The concept is explained by re-analysing quotes from the case studies’ data to see how jobs and tasks and their shaping and crafting may influence how work is perceived to contribute to both a positive project outcome and, through individuals’ task motivation, individuals’ career and personal development. The context of KSAEs required for IPD-alliancing is very different from traditional BAU competitive project delivery forms. Six representative quotes from the two studies illustrate specific individual task influences on the worker’s motivation. The first three core job dimensions illustrated in Figure 11.2 shape perceptions of how the work may potentially facilitate and shape KSAE growth in an IPD-alliancing context. The Discrete worker’s task motivational salience context

Work/task contextual influence on the worker’s motivation Interpreted work meaningfulness

Skill variety

Task identity

These shape perceptions on how the work may potentially facilitate and shape KSAE growth

Interpreted work responsibility

Task significance

Task autonomy

Interpreted feedback quality

Task feedback

Feedback salience

These maximises potential professional KSAE growth through active learning, experimentation, high quality-relevant feedback and collegial support

Figure 11.2  Focus of the discussion on findings

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next two dimensions: task autonomy and task feedback, maximise this potential through active learning, experimentation and open feedback, and collaboration within and between teams and disciplines. Discussion through challenging assumptions is encouraged and expected within an IPD-alliance. Feedback salience is particularly well targeted and pertinent to both an individual’s job KSAE growth and project outcomes.

Analysis of quotes from alliance team members It is clear from the Wegman et al. (2018, p352) literature review analysis that the workplace context from BAU 40 years ago to today has changed. The change between today’s BAU and the workplace IPD-alliance ambience is also a significant factor in understanding how IPD-alliance collaborative situations enthuse and motivate workers (Walker and Lloyd-Walker, 2014). Therefore, the Hackman and Oldham (1976) JCM reference provides a useful framework to analyse quotes from the perspective of job/task dimensions, and how they frame psychological states that contribute to worker motivation on IPD-alliance projects, as illustrated in Figure 11.2. Hackman and Oldham (1976, p256) explain the three psychological states as follows: 1 2 3

Experienced Meaningfulness of the Work. The degree to which the individual experiences the job as one which is generally meaningful, valuable, and worthwhile; Experienced Responsibility for Work Outcomes. The degree to which the individual feels personally accountable and responsible for the results of the work he or she does; Knowledge of Results. The degree to which the individual knows and understands, on a continuous basis, how effectively he or she is performing the job.

Six representative quotes from the two case studies’ data are now re-analysed based on the three psychological states just mentioned.

Interpreting work to make sense of its meaningfulness Task skill variety was attributed in the JCM as one of three core job/task dimensions. Undertaking a range of different and diverse activities requires a variety of different skills and talent in how to use them. The way that these skills are orchestrated in a particular work environment is important to the extent to which the task or job role may be interpreted as being meaningful. The context of an IPD-alliance is one in which collaboration, as explained earlier, is institutionalised. This means that KSAEs need to include those that support and enable collaboration and so move beyond technical and even ‘people’ skills but extend to business acumen, so that the relevance of the task/job is perceived in the wider perspective of project outcome rather than project output. Both studies that we reviewed stress this point and the quotes we identify support this proposition. Interviewee IV-02 from Study 1 (Walker and Lloyd-Walker, 2011b, Appendix 3, p10) is quoted as saying: ‘I’d want somebody that was prepared, who I respected for their technical ability, who was prepared to listen and discuss various opportunities and outcomes’. This speaks to KSAEs of knowledge (about the context of the task and project), skills (technical, people and business acumen), attributes (prepared to listen and collaborate) and experience (implied capacity to have learned the value of collaboration from experience). Hackman and Oldham state that task identity is the degree ‘to which the job requires completion of a ‘whole’ and identifiable piece of work; that is, doing a job from beginning to end with a visible

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outcome’ (1976, p257). In IPD-alliance work the nature of the integrated delivery is that the project teams (from the client representative, facility operator representative, design, contractor and included subcontractor specialists) work towards a best-for-project outcome (Department of Infrastructure and Transport, 2011b; Walker and Lloyd-Walker, 2015). This means that in alliances, for example, task identification is much broader than ‘the things we need to get on with’ but, rather, it involves identifying the impact that the task may have on others in the project team, including enabling or disrupting them. A quote from P26 in Study 2 (Walker and Lloyd-Walker, 2015, p221) illustrates this point cogently: The way the job was set up with all the support, some of the people finishing works into the M&E fit out of the tunnel, but I mean, towards the end it was actually realised that the civil people were better positioned to do these kind of things, so they actually got onto the work and did it. This quote can be contrasted with another quote that related to the same team members who had been working on a different project [Project X], which was undertaken as a more traditional design and construct BAU delivery form. In that quote, alliance team member P25 in Study 2 (Walker and Lloyd-Walker, 2015, p220) recalls the disruptive influence of teams taking a focus restricted to their possible performance at the expense of the performance of other teams engaged in the project. It is clear from this quote that a best-for-project mindset in Project X was not considered: [Project X] was still underway and there was an enormous amount of conflict occurring between the M&E contractor in the tunnel and the civil contractor, which was basically us. . . . so the parties were more or less at war from a contractual point and a commercial point of view, but even worse than that, the project was suffering a time lag because the parties were very misaligned. . . . And so what was happening on is the project director would just go ‘Look, I’ve got to get my civil works done’ so they would just go and do things in there that were detrimental to the M&E contractor. Then that would result in a claim from the subcontractor that sort of went on. There was a guy who I was trying to negotiate the contract with. His name was [xxxx], who was telling me the [Org A] side of the story on [Project X]. And he said ‘Look, without you listening to just your guys in isolation, how about I take you down to [Project X] and show you what’s happening from my point of view?’ And I could see, because I had no bias in this, the [Org B] guys I talked to just hated [Org A]. They just thought they were incompetent. Then when I met with the [Org A] guys and they showed me some of the photos of what had happened, even historically, you could see, the whole thing, it was just a bunfight inside the tunnel. Everybody was trying to get access and they weren’t necessarily deciding on what were the best priorities in terms of the best outcome from the project. They were all just looking after their own personal interests and definitely we were getting a substandard outcome. The third job-task dimension that directly affects the quality of understanding the meaningfulness of the work is task significance. Task significance is defined as ‘The degree to which the job has a substantial impact on the lives or work of other people, whether in the immediate organization or in the external environment’ (Hackman and Oldham, 1976, p257).

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A quote from P23 in Study 2 addresses this aspect well, with reference to value-engineering workshops and a best-for-project mindset: On this project there was value-engineering workshops and the like where they were constantly looking for better ways to deliver the project, and those workshops would involve alliance team members and people outside the alliance because it was often the situation where you were trying to find the best solution project wise – not necessarily just best for the alliance – but best for the overall project. Also, as Study 2’s quoted interviewee P38 recalls: We closed down the railway line, [Line P and Line Q] for four weeks and during that time [PO X] was having trouble with their Siemens trains braking, so they had all these trains on the [Line P and Line Q] side of our site and they were all being nicely serviced and everything and the ones on the city side couldn’t get serviced and they were being taken out of service because of their braking problem. I think it was about day 13 they said they need to get six of the trains from the outer network, if you like, to the inner network and within three days we’d totally changed our program, our sequence of works and dragged the trains through on skeleton track by diesel train and by day 17 and they got them through and that helped their broader business. There’s no need for correspondence, it’s all just a meeting, talked about the practicalities of it, whereas with D&C you’d be looking at all the claims and setting yourself up to put some sort of delay claim in and all that, so it cuts all that out. . . . This illustrates how the planning for a series of activities was revised to maintain progress but in a way that helped the project owners and rail operators to get over problems outside the immediate project but affecting the overall rail network performance.

Interpreting work responsibility The psychological state of understanding what responsibility one has, and why, may have a powerful impact on a worker’s ability to make sense of their job-task context. This is related directly to the job-task dimension of work autonomy. Hackman and Oldham suggest that: The job characteristic predicted to prompt employee feelings of personal responsibility for the work outcomes is autonomy. To the extent that a job has high autonomy, the outcomes depend increasingly on the individual’s own efforts, initiatives, and decisions rather than on the adequacy of instructions from the boss. . . (1976, p257). They also state that autonomy is, ‘The degree to which the job provides substantial freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out’. A quote by interviewee IV-05 (Walker and Lloyd-Walker, 2011b, Appendix 3 p6) expresses this aspect clearly:

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everyone’s pulling in the same direction, there’s I suppose, freedom to express yourself so what we call ‘non-discussable’ – being able to have those open and honest conversations which fleshes out any issues out there and is able to ultimately take us to what we believe is the next level. The salient point made is that team members have the autonomy and freedom to explore options suggested by others in an open no-blame environment and this encourages not only innovation and experimentation but also facilitates people’s improved understanding of their responsibilities and capacity to contribute to a meaningful debate about how to plan and act.

Interpreting work-feedback quality The quality of feedback is an important component of understanding the impact that a job/task may have on the overall outcome of action. Hackman and Oldham identify feedback as: ‘The degree to which carrying out the work activities required by the job results in the individual obtaining direct and clear information about the effectiveness of his or her performance’ (1976, p258). We refine this concept bearing in mind reflections made in the study by Wegman et al. (2018). Given that the nature of the workplace has changed over the past 40 years and that the IPD-alliance workplace is significantly different to today’s BAU environment, and that with today’s technological advances that facilitate greater monitoring and communicated feedback, we suggest that the feedback job dimension could be considered as the ‘raw’ task feedback and a separate dimension, based on how the worker conceives the feedback, to be salient. Together these two dimensions shape how workers understand the feedback messages, interpret them and embed them to understand the job/task contextual influence. Task feedback may include communicated progress and impact signals, such as reports, particularly highly visual representations of progress against plan. Geraldi and Arlt (2015) explain in detail various forms of monitoring and the impact and importance that visual representation has on how those using the reports may perceive them and how they may attribute relevance to those signals. Feedback such as traffic-light reports against various key performance indicators are important to providing task feedback but to be effective the feedback must appear salient to the report’s target audience (Geraldi and Arlt, 2015). Feedback salience may be considered from several perspectives. Timeliness is one dimension in which the timing of the message’s arrival allows action to be taken to respond to the signal. Clarity of meaning is an obvious dimension that is vital, as the message must be clear to be understood. A further dimension of feedback salience is how a message may be seen as useful, valuable and relevant. Söderlund (2010) introduces a useful concept relating to knowledge management and organisational learning that is also relevant to the salience of feedback. He notes that people may be exposed to, and even well informed about, certain communicated messages. Despite the level of exposure to a message, that message simply may not penetrate an individual’s consciousness to enable them to be motivated to act upon that signal or communication. However, when ‘the time is right’ and a communication triggers in its receiver a realisation of its relevance and applicability, the signal receiver is prompted to act. This process is referred to by Söderlund as knowledge entrainment. We suggest that this is an important dimension of feedback. IPD-alliance projects, as we have seen from this discussion on the presented quotes, involve deep integration and collaboration with respect to multi-disciplinary teams delivering these project forms. We suggest that feedback salience may be broadened and enhanced with high levels

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of integration and collaboration. Skills and attributes such as empathy, emotional intelligence and resilience have been shown to be more prevalent in alliances (Walker and Lloyd-Walker, 2011a). We argue that these skills and attributes allow people to perceive value in the impact of feedback from a broader perspective and may increase its entrainment capacity. The quote by alliance team member P25 in Study 2 (Walker and Lloyd-Walker, 2015, p220) makes a point that is highly relevant to feedback salience and knowledge entrainment. When discussing a conversation he had with a colleague on a BAU-type project that was experiencing severe problems he said: ‘Look, without you listening to just your guys in isolation, how about I take you down to [Project X] and show you what’s happening from my point of view?’ And I [interviewee P25] could see, because I had no bias in this, the [Org B] guys I talked to just hated [Org A]. They just thought they were incompetent. Then when I met with the [Org A] guys and they showed me some of the photos of what had happened, even historically, you could see, the whole thing, it was just a bunfight inside the tunnel. This quote illustrates how quality of feedback, salience and entrainment concepts may be linked. P25 received high-quality, personalised and high-impact experiential feedback that resonated with his professional experience and skills so that he immediately grasped what the real problem was. He used that feedback experience when moving onto an alliance project with the same sub-contractors and they determined to choose an alliance form of IPD to perform that work.

Summary of answer to research question 2 This section highlights important insights into how IPD-alliancing seems to engage people more effectively to motivate them to be prepared to give their best efforts and commitment to a successful project outcome. We demonstrated in Figure 11.1 how the IPD-alliancing form of project delivery provides a particular overall or omnibus-workplace context shaped by collaboration, integration and a particular institutionalisation of collaboration and integration. This has an impact upon the enablers for triggering improvement in the discrete-task motivational-salience context that helps explain the achieved workers’ performance levels. Figure 11.1 informs Figure 11.2, which illustrates in more detailed how that task-motivational context may be perceived as more salient to workers. Central to this understanding is the way that psychological states of task/job meaningfulness, a heightened sense of worker responsibility, and the quality of feedback received by workers may release latent motivational energy and project commitment. We also showed how job-task dimensions (skill variety, task identity, task significance, task autonomy, task feedback and feedback salience) shape these psychological states. We argue that this JCM approach (Hackman and Oldham, 1976), when viewed through the lenses of institutional theory (Scott, 2014) and applied to re-analyse data from Study 1 and Study 2 (Walker and Lloyd-Walker, 2011b; Walker and Lloyd-Walker, 2015) helps explain the importance of context (Johns, 2006) and how it is salient to understanding why IPDalliancing may offer better worker motivation and commitment prospects than traditional BAU approaches to project delivery. We also suggest studying the way that workers’ motivation may be supported by high levels of job/task meaningfulness, sense of responsibility and the quality of feedback on work being present on successfully delivered, traditional BAU projects. Perhaps Figure 11.1 and Figure 11.2 may be of value in such analysis? 240

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Conclusions The purpose of this chapter was to explore and explain the KSAEs required to effectively undertake IPD-alliance projects. We did this in two ways. First we identified the KSAEs that best equip collaborative teams to contribute to excellence in project outputs and outcomes. Answering research question 1 of this chapter gave us a ‘what’ story about KSAEs. We then focussed on explaining ‘how’ and ‘why’ KSAEs might positively impact the effective delivery of IPD-alliance projects. This answered research question 2, which also makes a contribution to theory in that it helps to advance an understanding of how to capitalise upon the observation made by Wegman et al. (2018) that the JCM may remain usable and relevant but that the workplace context may still be better understood using that model. We conducted our analysis on data from projects realised through a very different delivery approach, IPDalliancing, to the traditional BAU work contexts of the literature analysed by Wegman et al. Thus our contribution sheds additional light on the role of workplace context. It also highlights some KSAEs needed for undertaking alliance work. The chapter also makes a contribution to practice by pragmatically explaining how best practice in work crafting and task orchestration may improve not only IPD-alliancing forms of project delivery but also more traditional BAU forms. After all, the literature on project success acknowledges that the picture is not black and white and that if x% of projects in all forms of project delivery yield success then 100-x% delivers project failure. The real issue is how to increase the x% in all project delivery forms.

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12 PEOPLE, CAREERS AND IPD HUMAN RESOURCE MANAGEMENT Beverley Lloyd-Walker, Lynn Crawford, Erica French and Derek H. T. Walker Introduction Whether projectification (Midler, 1995) has led to changes in the way that organisations are structured and work is carried out across sectors, industries and organisations, or whether projectification has been a response to changes in the workplace, it remains that the way work is carried out today has changed. Research on how human resource (HR) practices might need to be adapted to manage the workforce in today’s organisations has followed. Initial research in this area was focussed within the European context (Borg & Söderlund, 2013; Bredin & Söderlund, 2011, 2013; Huemann, Keegan, & Turner, 2007; Turner, Huemann, & Keegan, 2008). The needs of those in project work within an Australian context (Crawford, French, & Lloyd-Walker, 2013) have been added to the research findings from Europe. Research reveals areas of concern for both project team members and organisations. The precarious employment nature of careers in temporary organisations – project teams – has attracted attention while the predicted increased demand for project workers challenges organisations to find ways of ensuring they have a pool of highly capable project staff available when needed. Research has begun to explore the need for human resource management (HRM) practices to both recognise the demands of team-based working within projects, and the challenges of having available the skilled project workers required for the broad range of project teams now forming and disbanding across organisations. Organisations will require continuing access to a highly capable pool of project workers who can join project teams, and organisations will then need to match the knowledge, skills, attitudes and experience (KSAEs) of this pool of available talent to project requirements. The chapter is structured as follows. First, we discuss changes that have taken place in the workplace in general, including the increased use of project teams to deliver outcomes. Then we move to changes taking place in the way projects are delivered. Having established the projectbased workplace of today and the future, we look at HRM practices in general, then move to examine how these practices fit within an integrated project delivery (IPD) workplace environment. We use the literature to describe the context in which the chapter is set. By reviewing what others have found in relation to HR practices in general and their appropriateness for the projectified workplace, we cover what we mean by HRM within the IPD context and whether

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further change will be required to match HR practices to this environment. We then concentrate on HRM practices, first from the perspective of the IPD project or program ‘owner’ and then from the perspective of project workers engaged in IPD projects and programs. We cite case study examples of IPD, more specifically alliancing projects and programs, to illustrate how HR practices might better support relationship-based procurement. This provides the basis to answer the chapter’s core research question: What specific HRM processes and principles are required to develop the necessary collaboration capabilities required of team members in IPD projects? We then conclude with a chapter summary.

The new workplace Flattened organisational structures and projectification have changed the way that organisations are structured and how work is performed. Three revolutions have occurred in the history of the world, bringing about changes in the way work was performed, and the type of work performed. At the same time, they have impacted the lives of workers who have left rural areas to work in cities or large centres. These three consecutive revolutions came “about as a result of mechanisation, electricity and IT” (Kagermann, Wahlster, & Helbig, 2013 p.5). We are currently experiencing the fourth revolution: the Internet of Things and Services (IoT). This revolution has similarly occurred because of developments that have enabled new and different ways of working. Each of these revolutions has been accompanied by predictions of the death of jobs, and concerns for society as a result of livelihoods being adversely impacted (e.g. Autor, 2015). How will the tasks of project managers change as a result of the IoT? How will the knowledge, skills, attitudes and experience of those working on projects need to change to support continued employment, especially within IPD projects? It is acknowledged that these changes are likely to result in the elimination of thousands of jobs, with some occupations disappearing and others experiencing fundamental change (Hirschi, 2018). It is the demand for jobs involving routine tasks, those commonly performed by lower-skilled workers, that is expected to reduce as these tasks will be transferred to technology and performed using robots and artificial intelligence (AI). Some, though, view this as providing a greater variety of, and more flexible, career paths (Kagermann et al., 2013) and see the increasing sophistication of AI and robotics as an opportunity to reinvent jobs (Arup, 2017). Recent studies of the emerging work environment arising from increased digitisation of the workplace (Arup, 2017; CEDA, 2015; Jacobs, Kagermann, & Spath, 2017; Kagermann et al., 2013; PwC, 2017; UKCES, 2014) suggest business processes that make use of AI tools, robotics and the IoT will result in closer integration of organisations and people with the skills to effectively use those technologies through greater degrees of collaboration. In the project management profession, this is likely to lead to increased demand for staff capable of performing more complex roles, those involving planning, or controlling and other IT-related tasks involving telecommunications and the management of teams, including virtual project teams (Arup, 2017; Bonekamp & Sure, 2013). Organisations across industries and sectors (Whitley, 2006) are using project teams to deliver outcomes. Using projects provides flexibility and enables customer needs to be more quickly responded to. As Whitley (2006 p.82) noted, this “flexibility enables companies to change direction rapidly as knowledge and markets alter,” but “it limits the development of shared identities and firm-specific capabilities through collective learning”. Alliance/IPD and other collaborative project delivery methods provide the ideal opportunity for learning from others (Lindeberg, 2018). Learning from alliance partners, and the long-term benefits of learning that

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can be transferred back to each of the participating organisations, is often ignored. This highlights the need to rethink how the advantages of project delivery might be enjoyed while ensuring that the capabilities developed through collective learning are not lost with the rapid change of project team membership and the use of external as well as internal project team members. This is important because “the knowledge, capabilities, and resources of the firm are built up through the execution of major Projects” (Whitley, 2006 p.78), and the changing composition of project teams makes building these important organisational assets more complex. Project-based work is a strong driver within today’s economy (Arup, 2017). Value creation happens and innovation and creativity occur within these teams, and these activities are critical to organisational success. A growth in the demand for project workers is predicted, and these will be project staff who can work closely with AI, use telecommunications to support successful virtual project teams, and who have the personal attributes to manage relationships (Arup, 2017). Digital technologies and the growth of automation and human–machine collaboration will lead to changes in the composition and structure of teams (Arup, 2017). Much of this project-based work will be performed within virtual teams, supported by “information and communication technologies”. Virtual teams have grown both in number and size. In 2015 the number of “‘virtual workers’ around the world” was estimated to be “1.3 billion” (Arup, 2017 p.14). This brings with it changes to the working culture and “the introduction of new social infrastructure in the workplace” (Kagermann et al., 2013 p.6) that make new demands of employees working in these virtual teams. Diverse and dispersed team members will need proficiency in use of “virtual collaboration tools, such as Google Drive for collaborative writing” and “Trello for collaborative project management”. These will become important skills for the project team members of the future (Colbert, Yee, & George, 2016). Future work will be within networks that span industries and organisations and involve virtual teams spread around the globe (Arup, 2017). When combined with changes to work content and work processes, employees and their managers will be required to take on more demanding and challenging roles (Kagermann et al., 2013). Those managing projects will “need new skills in communication and team management. The challenge might lie less in finding the right employees and more in finding managers with the necessary skills to manage a virtual workforce” (Arup, 2017 p.14). Project workers will need to keep up with these changes, acquiring the latest skills and knowledge as these changes occur in the wider environment. Requiring the latest knowledge and skills to secure future work, project workers will endeavour to find new project roles when their current roles end; they know that career development and career progress depend on being selected for key projects within their organisation (Asquin, Garel, & Picq, 2010) or gaining challenging roles in other organisations. Project workers can now move across sectors and industries, not just between organisations within a single industry, to pursue their careers. Competition for roles within organisations could adversely affect team relationships as members will be competing for new project roles and seeking advancement through selection onto key projects. Capable employees will have a broad arena in which to seek out advancement, challenge and interesting jobs. Chapter 16 of this book discusses in more depth the role of the emerging digital economy and its impact upon IPD and its continuing evolution.

New employment arrangements for the new workplace The increased use of project teams, and new types of teams such as virtual project teams, has led to new forms of employment across industries. Before the impact of the IoT, a global trend

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to temporary, contract, and casual employment, referred to as insecure or precarious forms of employment, had begun (Burgess, Connell, & Rasmussen, 2005; Burrows, 2013; Campbell, 2010; Connell & Burgess, 2006; Lee, Huang, & Ashford, 2018; Quinlan, 2012). The percentage of the workforce identifying as working in full-time continuing roles had been decreasing as the nature of work changed, with some employees working on several tasks or projects simultaneously (Arup, 2017; Hirschi, 2018). Whereas the fears expressed regarding job losses as a result of the 4th Revolution have related mostly to those working in lower-level roles, changes to work arrangements such as contract and casual work have impacted all levels of professionals, including project managers (McKeown, 2005). Of importance to organisations is the issue of knowledge retention and contract workers. When a large percentage of the workforce on a project is made up of temporary or contract staff, the creation and use of knowledge becomes a challenge for management (Becker & Smidt, 2015). Freelancing or contract project work have been suggested as ways of supporting increased agility by facilitating the temporary employment of freelancers to support the innovation process, which can benefit organisations. But as Jacobs et al. (2017 p.9) point out, a “key challenge in this area is the social protection of freelance workers”. Pressure for organisations to consider all their activities from a social-responsibility perspective may include this aspect of employee protection as coming under that umbrella of corporate social responsibility (CSR). Chapter 23 discusses in detail CSR and ethics and ethical dilemmas in detail. Indeed, it has been suggested by Arup (2017) that this should be included in future editions of the Project Management Body of Knowledge (PMBoK) where responsibility for life-long learning would also be addressed. Across industries the growth of the ‘gig’ economy challenges former models of employment, such as job security, and, with that, issues such as staff loyalty and how and by whom professional development will be provided in the future (Arup, 2017). Though they may have fewer employees on their payroll (Arup, 2017) their continuing desire for future project success may require organisations to consider new forms of employment and ways of ensuring high-quality project team members continue to receive the benefits and protections needed to encourage continuing commitment and motivation. Another concern is that of health and well-being when employees experience feelings of job insecurity (Asquin et al., 2010; Ferrie, Shipley, Stansfeld, & Marmot, 2002; Quinlan, Mayhew, & Bohle, 2001; Turner & Lingard, 2016). We see from this that changes that technology is enabling in the workplace, such as those discussed in Chapter 16, may be viewed as negatives or positives. Some see temporary and contract work as providing the individual with flexibility and the ability to balance work and life; for them contracting is a choice (Nunez & Livanos, 2015). Project work is inevitably temporary, because project team members’ roles will exist only for the duration of a project (Turner & Müller, 2003). Those choosing a career in project management are likely to do so knowing of the temporary nature of roles on projects. People who find that temporary employment, or contract employment, provides flexibility, challenge, interest and excitement, as well as the income they desire, form part of the ‘contractor by choice’ group (Barley & Kunda, 2006). Project workers can use contract work to build their professional profile, gain new and different experiences, and increase their professional network. Finding the time and support to upgrade skills to develop the profile required to compete for contracts in this environment will not only be an issue for contract project managers (Connell & Burgess, 2006; Peel & Inkson, 2004), but for all organisations that employ them.

Changes in jobs being performed Jobs are changing. Technology impacts on job content. With robots and AI taking over some tasks, the content of position descriptions will need to constantly change. Traditionally, organisations 248

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have taken control of the process of job-content change, applying top-down-driven job redesign approaches based on well-researched and supported approaches, such as the job characteristics model (JCM) (Hackman & Oldham, 1976) to guide their efforts. Roles were modified or redesigned by incorporating principles found to ensure efficient and effective work completion while incorporating elements that were found to increase job satisfaction and worker motivation. The desire to remain competitive drove job redesign and it was assumed that employees would develop the new skills, knowledge or attitudes required to perform these changed roles, with training commonly provided by the organisation. By comparison, job crafting is a bottom-up exercise. It relates to changes in behaviours that are initiated by employees to better align their jobs with personal desires or preferences (Tims, Bakker, & Derks, 2012). Commonly these efforts are a response to new technology or to knowledge that employees have gained which they realise will improve performance. Among their predictions of how project work will be carried out in the future, Arup (2017) have suggested that organisations will redesign jobs and their workforces. However, it is often employees who alter the content of their roles. People instinctively modify their roles to fit the changing environment. In doing so they have the opportunity to craft a role that continues to provide them with the interest, challenge and sense of achievement they desire; a job that continues to provide person–job fit (Hardin & Donaldson, 2014). Indeed, employee-initiated job crafting may also result in increased person–environment fit (Tims & Bakker, 2010) while at the same time improving productivity through extra-role behaviours that support organisational responsiveness and adaptability (Demerouti, Bakker, & Gevers, 2015). The JCM (Hackman & Oldham, 1976) guided the linking of job characteristics to the abilities of an employee because research had shown this could lead to increased motivation, engagement and commitment. By providing employees with the opportunity to design their roles through job crafting, similar or further improved results may result. Research has shown that these improvements occur both at the individual and team level (Tims, Bakker, Derks, & van Rhenen, 2013). The JCM is discussed in detail in Chapter 11 together with its motivational impact on the IPD workforce. Over the years, project teams, not just individuals, have crafted new and different ways of performing work. Collectively, project team members have responded to changes in technology by redesigning the way they work together as a team. They have done this by altering the tasks that each of the team members performs, and collectively agreeing on how they will now deliver the project outcome by using new technology or equipment. An example within the construction industry is that of project teams agreeing to change the way tasks are allocated when new software and planning tools, such as Building Information Modelling (BIM), have become available. Changing practices to use what BIM offers has led to improved project outcomes (Bryde, Broquetas, & Volm, 2013), although such changes do need support in the form of training and development. Because the interests and roles of team members vary, each person may desire different levels of each of the core characteristics of the JCM – skill variety, task identity, task significance, autonomy, and feedback (Hackman & Oldham, 1980). These elements may change over time (Ling & Loo, 2015; Wegman, Hoffman, Carter, Twenge, & Guenole, 2018) so, to ensure job satisfaction and high levels of motivation that enable productivity improvement, team-member control over the changes to job content is important. By aligning team members’ interests and desires with the new tasks, team members will be motivated to deliver outcomes that ensure project success. Fast and constant technological change is impacting today’s workplaces, and these often mean that routine project tasks can be removed from roles. Project personnel will be required to make greater use of higher-level capabilities, such as actions that demonstrate sensitivity 249

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to the environment and to society as these are now measures of success for infrastructure and construction projects. Technology enables higher standards to be achieved, so new and higher standards are expected (Schoberova, 2015). Employees can take the opportunity “to focus on creative value-added activities” (Kagermann et al., 2013 p.21). Having high levels of self-efficacy has been found to link with the likelihood of people choosing project management as a career (Aitken, 2011) and these people also have high growth needs (Ballout, 2009). Project workers are therefore likely to welcome the opportunities to learn new tasks, to take on challenging work by redesigning their roles in response to new technology or structural changes. These proactive behaviours are likely to include crafting their own roles; those that incorporate the changes occurring and which fit with their needs for interest, challenge and job satisfaction. The needs of both employees and their organisations, even their temporary organisation - the project - are addressed through job crafting, making it well suited to the complex work environment of today (Demerouti & Bakker, 2014).

New ways of delivering projects We have established that the world of work is changing. Organisational structures have changed and projectification has been part of this change because it acknowledges that people now work in different ways to the past. Technology is supporting changes to the composition, location, and culture of project teams in general. We now move to changes within project delivery methods and their implications for project owners and project workers; we consider how relationship-based contracting, in particular IPD, leads to changes in the dynamics within project teams and the competencies required of those working within them. Relational contracting has now become the preferred method of delivery within some industries and has been shown to provide considerable benefits for organisations and society (see Chapter 4 for a detailed discussion of value and IPD). From its beginnings in the infrastructure and construction industries, there are now attempts to use relational contracting across a broader range of areas. Ashcraft (2014 p.4) cited examples of IPD being used for “university projects, health care, semiconductor manufacturing, commercial, industrial, pharmaceutical, sustainable, and other project types”. This has resulted in greater demand for project teams that can work within new forms of project delivery, such as lean construction, alliances and IPD (Walker & Lloyd-Walker, 2019). Relational forms of contracting such as IPD and alliances aim to address the issue of trust, or of reducing or eliminating the level of mistrust which has been present in traditional forms of project delivery (Pishdad-Bozorgi & Beliveau, 2016). There will be an accompanying growth in the need for project team members who can work in collaborative, high-trust, no-blame, and high-commitment environments (see Chapter 13). This is occurring as we move to the era of AI and diverse teams with members spread around the globe. Each of these changes has asked new and different KSAEs of employees. Other project delivery forms have not demanded of project team members the personal skills that more relationship-based forms of delivery require. Davis and Love (2011) found that successful alliance project management required trust and commitment to be maintained throughout the life of an alliance. Strong personal relationships, to support the development of trust, were found to be necessary if this was to be achieved. Team members found the experience of working on an alliance project to be a positive one when supported by development activities which prepared them for this new working experience. Workshops, participation in management games and selection processes (Davis & Love, 2011) designed to best choose suitable partner organisations and contractors and individuals to make up the project team were found to provide the best support. 250

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The move to more relationship-based forms of project delivery, with its emphasis on collaboration and developing an open-book, no-blame team culture (Jeffries, Brewer, Rowlinson, Cheung, & Satchell, 2006) requires new and different ways of working. IPD is a highly people-focussed form of project delivery that depends upon hiring people with a mindset that fits with the collaborative nature of IPD (Lloyd-Walker & Walker, 2010; Walker & Lloyd-Walker, 2011). Lean construction is an approach that “relies on close collaboration among all key participants”. Like alliances and IPD, the lean approach views “the project as a single organisation dedicated to achieving shared goals” with decisions “made on a ‘best-for-project’ basis” (Ashcraft, 2014 p.2). Thus, lean construction uses teamworking skills that include collaboration and cooperation at a level beyond that used in traditional delivery methods in the construction industry (Chapter 17 provides specific examples and case studies). Poor teamworking skills (Sarhan & Fox, 2013) were found to be a barrier to implementing lean construction in the UK, while there is also evidence that lean construction can provide improved project outcomes. To achieve the benefits, development of these higher-level team skills will be needed. Relationship skills, the ability to work closely with others, to collaborate with those who may otherwise have been competitors, and to work in a non-conflictual, blame-free environment is most strongly demanded of project workers when IPD/alliancing is the chosen project delivery method. So, when project staff move from traditional to collaborative forms of teamwork that demand very high-level teamworking skills, such as IPD projects, professional development will be required. An important characteristic within IPD alliancing in Australia, for example, is a strong focus on growing people’s skills and competencies through mentoring, coaching and professional development to ensure the required level of collaboration skills and abilities are developed (Walker & Lloyd-Walker, 2015). Over time, as more projects are delivered using lean, IPD and other more relationshipbased forms of delivery, a pool of capable project workers will be established. It is early days; for now, those coming from traditional delivery methods will require support to move to the new forms of delivery. Team relationships skills where trust is present are a vital component of successful IPD/ alliance project delivery approaches. Because IPD/alliance project teams are made up of multidisciplinary team members from multiple ‘parent’ organisations, integration of team members is required to achieve the highly relational form of contracting that can provide benefits. Ibrahim, Costello, and Wilkinson (2018 p.614) identified four elements that need to be present to achieve integration: “task- and relationship-oriented behaviours; collaborative learning environments; and cultivating cross-boundary networks and collaborative governance”. An adversarial relationship persisted within the traditional project delivery approach because one party was able to impose power over others. Traditionally, working on projects within the construction industry, for instance, has been one of non-co-operation, moving from competitive to conflictual forms of working. People who work within an IPD context are required to demonstrate collaboration-supporting behaviours, an underlying premise of IPD. In particular, alliancing, as has been stressed throughout this book, assumes that project team members’ joint capabilities and actions will generate greater value, more effectively, than the sum of their individual capabilities. A key human element is an ability to work together in teams so that any individual’s weaknesses may be compensated for by the strengths of others on the team and that any individual’s strengths may be enhanced and elevated through complimenting that strength in a manner that lifts team performance. Those who have spent some time working in less co-operative and conflictual environments may find changing to a more co-operative approach, where levels of sharing and trust are high, and where levels of blame are low or non-existent (Walker, Lloyd-Walker, & Mills, 2013), difficult to master, at 251

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least in the short term. Additionally, selection of team members will require consideration of current strengths and weaknesses and the possibility of the team environment providing learning transfer from those with areas of strength to those who currently have weaknesses in those areas. Dainty, Raidén, and Neale (2009) studied employee resourcing and team deployment in the UK construction industry. They found that those approaches that were most successful integrated a range of HRM activities and included long-term planning and processes that involved employees by seeking to learn of their needs in relation to work–life balance and career ambitions. These approaches better supported achievement of the organisation’s strategic priorities whilst at the same time met “project requirements, and individual employee needs and preferences” (Dainty et al., 2009 p.7). The change from traditional project delivery forms to relationship-based methods may result in a form of culture shock (Reed & Loosemore, 2012). In this instance the new experience may be surprising; a shock, but with the necessary support to adjust to the new way of working, may provide the individual with more rewarding experiences long term. The working environment within IPD projects is different to the business-as-usual context. HR policies and practices will need to be developed to acknowledge these differences. For instance, when working in IPD alliancing projects, employees from all participating organisations are expected to work in a collaborative, ‘one-team’ manner. Each participating organisation receives a payment from the IPD to cover the staff released to work on the project. Effectively, the IPD ‘purchases’ the project team members from each of the partner organisations. In this way, the project owner becomes ‘the employer’ with the project team members working for the alliance or IPD and not for their base organisation for the duration of the project. They will be located within the IPD, not their original employer, and this may be in the same city or another, even distant, location. They will now wear hard hats displaying the alliance/IPD name, and they will access their email under the alliance/IPD email account. For both the employee and those interacting with them it will as if they have left their original organisation. IPD-alliance project work entails people from a range of organisations being co-located to work collaboratively alongside each other towards a common goal (project success). This may be viewed as similar to the early experiences of expatriate workers. Workers are prepared for their new and different work environment to minimise the culture shock. But it does not end there. When those who have spent time on an international placement are repatriated, increased voluntary, or employee-initiated, turnover has been found to occur. The reason for these increased departures was most commonly a lack of use of the newly acquired skills and knowledge gained during the employee’s international experience (Pattie, White, & Tansky, 2010). For organisations, team members who choose not to return after the learning gained from working with people from a range of different organisations represent a loss of knowledge that could have been valuable for sustainability. Research in relation to more traditional project delivery methods has revealed an underdeveloped area in relation to organisational learning (Aerts, Dooms, & Haezendonck, 2017). The close, collaborative and sharing environment of an IPD/alliance project provides the ideal setting for learning that might be applied to future projects. Project team members may be challenged by the need to work co-operatively with other team members who have come from, perhaps, competitor organisations. All are likely to have, in some ways, been employed under different arrangements to those of the IPD-alliance entity as the HR policies and practices adopted will not be those of any one of the participating organisations. HR practices in relation to training and development, working conditions, health and safety training and a range of other organisational-policy constraints and opportunities are likely to be in variance to those project team members were accustomed to. 252

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Harmonising HRM processes at the project level to treat all project team members equally may result in inconsistencies and misalignments between IPD-project working conditions and those experienced by team members when working within their ‘home base’ worksite. Again, this may resemble something similar to the culture shock experienced by expatriate workers and thus require cultural-intelligence skills from project team members. High levels of emotional intelligence have been found to be required of project managers in particular to successfully deal with complex relationships within teams (Zhang & Fan, 2013). Culturalintelligence skills may be considered a sub-set of emotional intelligence, or more likely to be present in those with high levels of emotional intelligence which enable a deeper understanding of self and others. Cultural intelligence has been described as the traits and skills of people who are able to quickly and easily adjust to interacting in cultures that differ from those they are accustomed to or were socialised in (Brislin, Worthley, & Macnab, 2006). Some participating organisations may even be headquartered in other countries and the staff they send to work on the IPD may confront culture shock on a variety of levels – a different national culture and possibly language, a different company culture, and a different project culture. Thus, emotional-intelligence training may assist in developing the adaptability and resilience required to withstand such shocks. Training to develop higher-level emotional-intelligence skills in project managers has been found to be successful (Turner & Lloyd-Walker, 2008). High levels of emotional intelligence contribute to the success of large and complex projects (Zhang & Fan, 2013). Specific cultural-intelligence training may be required by those working in global virtual teams, or those working on IPD projects where team membership is made up of people from across cultures. Increasingly, employees, managers and project managers are being confronted with the need to adjust to cultural differences and to work with those who come from a variety of cultures, demanding of them cross-cultural competencies (Andresen & Bergdolt, 2017). Readers may wish to refer to Chapter 10 that discusses national, professional and workplace culture in more depth. Those with experience on IPD-alliance projects will have developed the new competencies required and be in a position to lead future projects that involve relational contracting (Patanakul, Milosevic, & Anderson, 2007), and to mentor others who are new to this form of project delivery (Patanakul et al., 2007; Patanakul, Pinto, & Pinto, 2016; Söderlund, 2012), both within the area of general human resource practices in project-oriented and project-based organisations. Research has covered areas such as motivation of project workers (Dwivedula & Bredillet, 2010) and specifically in working in multiple-project environments (Patanakul et al., 2016), and human resource planning and selection of staff, where the capabilities of project personnel are matched with the requirements of a specific project (Dainty et al., 2009; Raidén, Dainty, & Neale, 2004, 2008). Research into the selection of leaders of alliance mega-infrastructure projects in Australia revealed that traditional selection processes were not sufficient to describe how these appointments were made. Complex factors were found to influence senior leadership (Lindeberg, 2018). Because highly capable project workers can now move across sectors and industries, not just between organisations within a single industry, to pursue their careers, retention of project managers will be critical for organisational success, especially as increased demand for project managers has been predicted (Arup, 2017). Developing ways of retaining those who have developed the appropriate skills and mindset for successful IPD-project delivery will need to be prioritised. Overall, the results of these various research studies support the assumption that different capabilities are required of project managers across varying project types and configurations. Much of what these researchers have found has applications within IPD/alliancing, but there is a need to consider how the learning from this might be best applied. 253

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HRM for the IPD workplace Chapter 11 provides an extensive discussion of KSAEs. We now discuss more specifically the KSAEs that are required and the likely changes to HR practices that will be needed to support successful IPD. Studies on profiling alliance managers’ competencies (Walker & Lloyd-Walker, 2011) and on alliancing and the knowledge, skills, attributes and experiences needed for people engaged in alliances (Walker & Lloyd-Walker, 2015) are among the limited research that has been undertaken on HRM practices from the IPD perspective to date. Our discussions to this point have covered the recent and predicted future changes in the workplace that include increased use of technology and the need for staff to comfortably work within diverse teams, virtual teams, and with communication technologies and AI (Arup, 2017). We have acknowledged that organisations may need to consider new employment arrangements within this new world of work that ensure high-capability project staff are available and motivated to deliver successful projects. It has been found that managing performance and providing careerdevelopment opportunities is important in ensuring engagement and in guarding against turnover (Popaitoon & Siengthai, 2014). New and fast-changing technology requires new approaches to ensuring that job content keeps apace with these changes. Enabling individual employees and teams to take over the redesign of work processes and job content, based on their deep knowledge and experience, will bring with it the advantage of ensuring that roles are designed to make best use of the strengths of team members and incorporate tasks that challenge, motivate and satisfy the growth needs of employees, leading to highly motivated teams that deliver successful team outcomes (Tims et al., 2013). The increased use of relationship-based procurement and specifically IPD/alliancing brings with it a new and different set of KSAEs that project staff will require in the future. Project managers may possess skills and knowledge that have led to success in other project delivery forms. These may need strengthening to the level demanded of IPD-project managers. Collaboration, communication and the ability to work in a high-trust, no-blame environment, one that varies greatly, for instance, from the adversarial culture of the construction industry (Jeffries et al., 2006), will require targeted employee-development programs to support successful project outcomes. Growing IPD-project workers’ skills by offering the opportunity for project staff to participate in workshops, management games (Davis & Love, 2011), and by developing mentoring programs (Patanakul et al., 2016; Söderlund, 2012) to develop high-level teamworking skills. Selection processes that identify the skill set needed for successful IPD-team participation will be required (Dainty et al., 2009; Raidén et al., 2008). Developing HR policies and procedures that will support retention of those with the capabilities and the knowledge to work on IPD projects will be an important issue for all organisations. Researchers, such as Keegan, Ringhofer, and Huemann (2018) are suggesting the need to reconsider whether the HR function has adapted to this new way of working, particularly in projectbased organisations. HR functions within organisations involved in IPD will need to develop HR practices that maintain a level of contact with employees during their employment by the alliance entity. HR activities developed in the past to support expatriation and repatriation may provide guidance on approaches that assist with the transitions that IPD-project team members will experience. Näsholm (2011) undertook a comprehensive study of the lived experience of expatriates from Sweden that expands our study of what it feels like, and the extent of adjustment and re-adjustment required for people to move into and out of and then return to a ‘home’ culture. For instance, it may help in retaining these highly capable employees if ways of incorporating newly gained skills and knowledge into the employees’ roles on return are found, so as to retain a strong

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pool of experienced and IPD-alliance-ready project team staff (Pattie et al., 2010). This may, for instance, be done by providing opportunities to mentor others after successful IPD experiences and before taking on the next IPD leadership role. A range of authors have researched and written on managing people within organisations today where project teams are now used to deliver outcomes across sectors, industries and organisations (for example, Bredin & Söderlund, 2011; Dainty, Qin, & Carrillo, 2005; Huemann, 2010; Huemann et al., 2007; Zwikael & Unger-Aviram, 2010). These researchers have addressed several ways in which HR practices may need to be adjusted and applied within specific project environments. All these areas are seen to be the domain of HR. When moving from traditional to new project delivery arrangements, staff may require professional development to gain the new capabilities now asked of them or to lift their current performance to the required level. HR’s involvement in the development of the elements identified by Ibrahim et al. (2018) to the level desired for IPD-alliance project success will be needed. This may involve mentoring programs where experienced IPD-alliance project leaders assist those moving from more traditional forms of project delivery to develop the required attributes. Individuals to be recruited are attractive to an IPD project team if they can contribute to building a strong and resilient workplace team culture in which technical knowledge, skills, attributes and experience are matched with interpersonal abilities. IPD alliancing teams are also expected to demonstrate and trigger innovative solutions to challenges and problematic situations, as explained and detailed in Chapter 18, relating to innovation and its diffusion. Chapter 8 also discusses how design thinking and creativity form a central requirement of those working in an IPD environment. This poses a specific recruitment and development focus for people involved in HRM processes. Chapter 2 described in detail the Collaboration Framework and its 16 elements. We focus here on explaining how the elements in that framework help us understand HRM processes from the perspective of what KSAEs are needed and how they may be developed through a coherent and effective HRM process. HRM needs to deliver a project team with the KSAEs to fit an integrated collaborative organisation. Table 12.1 suggests HR-supported activities to address a range of elements required of IPD/ alliance staff. It demonstrates that these efforts begin with attraction, or the ongoing activities that create an image of the organisation and the types of project leadership skills that fit this image. These may be demonstrated through words, graphics, and actions and are often provided on the organisation’s website. They are aimed at having a suitable pool of potential applicants awaiting specific job advertisements when recruitment efforts are commenced. Recruitment will then reinforce the constant attraction message, adding specific traits, capabilities or skills required for the positions being filled. Selection will then make use of proven selection instruments, including appropriate interviewing techniques, personality tests, and other tests, according to the roles to be filled. The interview technique commonly used across a project-based organisation may require the addition of some specific, relevant questions and the range of instruments used to support selection for IPDs/alliances may need to incorporate additional items that measure for those attributes identified through research: high-level collaboration and teamworking skills, a no-blame mentality, a desire for life-long learning and more. Table 12.1 illustrates some of the HRM processes needed to recruit IPD-alliance team members with a sound fit between the behavioural requirements of an integrated collaborative team and their demonstrated propensities and default behaviours. Specific requirements will vary according to the size and complexity of the project and the level of relationship skills team members already possess.

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Discussion

Recruitment and selection Design attraction efforts to appeal to those who relish working in collaborative and integrated teams, including virtual and dispersed teams. Here AI will enable human collaboration but also require human–machine collaboration skills. Use selection instruments that enable the desired abilities to be clearly identified. Joint Recruitment and selection Ensure that the recruitment approach appeals to good cross-discipline communicators. Choose selection communication Skills development instruments proven to discriminate between good and poor cross-discipline communicators. Substantial Links between site Retaining project staff will be vital for sustainability in the predicted high-demand environment of the future. co-location and home office While alliance team members form a united single team, there is a need for contact and a sense of belonging to their home organisation to be maintained during their time with the IPD/alliance entity. Develop a communication plan, including 3–6 monthly newsletters and provide information on upcoming challenging and interesting roles as the IPD/alliance nears completion. Establish a ‘repatriation’ plan. Transformational Recruitment and selection Word all attraction efforts – the position description and online advertising – to encourage candidates with and authentic high levels of emotional intelligence. Word position descriptions to demonstrate how and when EQ will leadership be required in the role. Ensure the selection tools used identify EQ and develop supporting development programs to strengthen EQ skills within the induction program. Team/leader development Design continuing processes to develop and maintain a transformation- and authentic-leadership style. Develop systems to identify those exhibiting high EQ skills on IPD/alliance projects and seek their involvement in a comprehensive mentoring program to ensure a supply of future team leaders. Trust–control Recruitment and selection Design attraction and recruitment processes and practices that convey an image of the style of leadership that is balance expected in the role. Professional development Implement professional development on governance and transparency aspects of the practicalities of respecting the need for accountability while encouraging initiative. Commitment to Recruitment and selection Ensure the attraction and recruitment processes appeal to those who are curious and critical thinkers. Demonstrate innovate how these abilities will be applied in team positions. Design a selection process that identifies developed abilities and an ability and desire to deepen critical thinking skills. Professional development Provide opportunities for participation in innovation workshops and on-the-job assumption-questioning tasks. Common best-for- Recruitment and Selection Direct recruitment efforts toward candidates with a team rather than individual performance motivation. Word project mindset position description to describe the need for high levels of team-social citizenship behaviours. Coaching and mentoring Provide work exposé opportunities, mentoring and training to support development of understanding how a team rather than an individual view supports project success. Stress opportunities for growth through coaching and mentoring as well as being a coach/mentor when high levels of team-social citizenship behaviours are achieved.

Collaboration motivation

Collaboration Framework element

Table 12.1  HRM practices for specific Collaboration Framework elements

Recruitment and selection Ensure attraction and recruitment efforts highlight an environment free from blame that encourages experimentation and innovation. Incorporate selection methods that identify those who wish to learn from mistakes – theirs and others. Professional development Promote resilience and recovery traits over blame-shifting propensity through mentoring. Consensus Recruitment and Use selection techniques that identify perception-taking skills and those that appreciate the point of view of others. decisionselection making Professional development Provide sensitivity training and development. Focus on learning Recruitment and selection Attract and shortlist those who demonstrate a desire for life-long learning. and continuous Professional development Use selection instruments that identify people who constantly think about how to do ‘things smarter’. improvement Provide development opportunities, through mentoring, or placement on teams with suitable experienced staff to support life-long learning. Incentivisation of Recruitment and selection Provide clear information on the requirement for high team performance in job information. Use selection the best for instruments proven to identify high team performance qualities. project mindset Professional development Use management games, mentoring, and/or selection onto project teams with leaders possessing high team skills. Balance individual and team rewards, largely focusing on challenge, learning, interest and satisfaction. Pragmatic Recruitment and selection Direct recruitment efforts toward candidates that demonstrate a high degree of reflection on practice. learning-inProfessional development Provide support for communities of practice in reflecting on lessons learned and context (the joint coordination action committee example discussed in Chapter 18, for example). Transparency and Recruitment and selection From those recruited who possess the technical skills and experience required, use selection methods that reveal an open book eagerness to operate within a transparent, open-book environment by filtering out those who demonstrate a tendency to be evasive or secretive. Mutual Recruitment and selection From those recruited who possess the technical skills and experience required, use selection methods that reveal dependency those with a high level of emotional intelligence. EQ instruments will identify those with a strong sense of selfand identity and understanding of their limitations and of their impact on others. accountability

No-blame culture

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HRM processes from the project-owner perspective The project-owner alliance participant (OP) and the senior alliance non-owner participants (NOPs) are concerned with delivering on their key results areas (KRAs) as measured through each KRA’s key performance indicator (KPI). These are joint project delivery performance measures as discussed in detail in Chapter 26. This results in several implications. First, the aim of each project team member should be to contribute their KSAEs to leverage off the KSAEs of others in order that a virtuous circle of enhanced capabilities is achieved. This form of collaboration may take an organisational-learning approach as illustrated in Figure 18.1 (Chapter 18) where learning moves from the individual level through active experimentation, leading to a concrete experience. This observation is reflected upon and then abstracted conceptually into a learning episode. Shared learning arises out of teams learning by doing, often experimenting to gain a shared experience, because project work is by nature nonstandard with many idiosyncratic nuances to otherwise routine operational tasks. Group team learning is shared, leading to a reflective collective experience that is then understood to become networked knowledge. This knowledge is often tacitly held by the team and embedded in cultural artefacts as ephemeral as ‘war stories’ or more concretely in the form of documented incident reports (hardcopy or digitally stored and accessed). At the organisational level – the alliance or IPD organisation – the knowledge may become institutionalised knowledge and be embedded in organisational routines, for example. When this is organisationally and socially captured cognitively it becomes intuitively formed. Organisational-level reflection on this knowledge results in it being intuitively institutionalised and entrenched in the organisation’s culture, to be understood as integrated interpreted knowledge (Järvinen & Poikela, 2001). The second implication relating to organisational learning resulting from joint project delivery performance measures is cultural. Organisational culture is discussed in depth in Chapter 10 and Figure 10.3 illustrates how the Kolb (1984) learning cycle is affected by various cultural influences (national background, professional and organisational). Different people learn and socialise in different ways that are often strongly influenced by cultural traits as discussed by Yamazaki (2005) and illustrated in Figure 10.3 in Chapter 10. The main point here is that a person’s cultural awareness can affect the way in which they interact within teams with others to generate the team collective knowledge that often leads to innovation and higher-level joint performance. We have seen many examples of innovation through lean thinking and criticalanalysis thinking exhibited on the Victorian Level Crossing Program (LXRP) for example (illustrated in Chapter 17) and in how collaboration in the development of an alliance turnout cost (TOC) discussed in Chapter 27 resulted in ‘outside the box’ thinking. The focus on IPD alliancing HRM practice is to develop a team that thinks and acts in different ways to teams in a business-as-usual, traditionally procured, project. It is what distinguishes IPD and other relationship-based forms of project procurement from more traditional procurement methods that is important here. IPD projects form an integrated group of highly capable people with the additional ability of being able to collaborate and, through this, challenge assumptions, jointly generating new and innovative approaches that deliver superior outcomes and project delivery performance.

HRM processes from the project team member perspective Alliances and other IPD forms of large-scale infrastructure projects in particular last many years, often three to five or more, and so those engaged in these projects are making an

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investment in their career and future prospects by working on these projects. They may decide to leave the project before its completion, or they may have concerns about remaining to the end only to experience an unwelcome gap in employment between one project and another. Regardless of that prospect, they still need to have their value proposition met. They often have a series of questions that they must address if offered a position on an IPD project. Why work for this project? What is it about this project that enhances my career or satisfies my interest and may provide a valuable experience? Does this project offer a satisfactory work/life balance? Other questions could also be noted here.

Conclusions This chapter provides fresh insights on HRM within an IPD context. We began the chapter by pointing out that the workplace in general is changing due to projectification of strategy delivery and that the emerging fourth industrialisation with its trigger and emphasis on digitaleconomy innovations (such as those discussed in detail in Chapter 16). We argued that this leads to the need for greater integration of project delivery participants and higher levels of collaboration, exemplified by the IPD form of providing project outcomes. This led to a discussion on the nature of work and the kind of workers needed to fit this environment. This has implications for HRM processes and approaches to supporting both the project-owner perspective and the individuals and teams that deliver the project. The growth in the demand for high-quality project staff will continue to rise as a result of the spread of project management across sectors, industries and organisations around the globe (Arup, 2017; Packendorff & Lindgren, 2014; Whitley, 2006). Organisations that use IPD will require capable project managers with highly developed interpersonal skills and experience in collaborative teams. Availability of suitably qualified staff will be an ongoing issue for these organisations. For individuals, accepting that permanent jobs are no longer the only form of employment may lead to many highly skilled people with a talent for innovation and collaboration choosing to freelance (Jacobs et al., 2017). The question then will be: have project-based organisations, or all organisations that rely on project teams to implement their strategies, considered the challenge that this presents for them, in ensuring that they have such a high-value workforce available when required, and committed to delivering value to their customers? The pressure will be on HR functions within these organisations to ensure that new forms of employment, appropriate selection methods and targeted development occur. HR practitioners will be held responsible for enabling their organisations to keep up with changing practices, but the literature would indicate that the growing use of IPD/alliance approaches, especially on big projects with large workforces, is perhaps not at the moment being supported to the extent required to ensure the benefits that these project delivery methods can provide are achieved. The chapter’s research question was: What specific HRM processes and principles are required to develop the necessary collaboration capabilities required of team members in IPD projects? We answered this question through Table 12.1 and, in the lead up to that table we set the scene to argue that the processes identified in the table reflect the specific needs of selecting, motivating and developing IPD/alliance participants. We have also stressed that HRM in an IPD/alliance context is not simply about developing and following processes. HRM goes further in this context to be a discipline of developing relationships. IPD, and alliancing in particular, is all about collaboration and relationship-building to co-create value.

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13 IPD FROM A PARTICIPANT TRUST AND COMMITMENT PERSPECTIVE Peter Davis and Derek H. T. Walker

Introduction The Walker and Lloyd-Walker (2015) Collaboration Framework was introduced in Chapter 2 of this book. The first element listed was motivation, and the context that sets the logic of taking an integrated project delivery (IPD) approach. Elements six to ten relate to collaborative behaviours. These behaviours pertain to the need for people to have confidence in each other and create an emotionally safe work environment. We argue that foundational concepts for collaborative behaviours begin with committed people trusting each other and communicating openly within governance structures and norms that support that basic premise. This book section, therefore, is about behavioural aspects of IPD and this chapter takes a trust and commitment perspective on how project participants from multi-disciplinary teams within an IPD team develop coherent, mutually aligned goals and actions that fit constraints and available opportunities and how they are effectively delivered. This chapter supports and frames the context for Chapter 14, which relates to stakeholder engagement. Trust and commitment is desirable not only for IPD projects but all projects. Yet many traditional procurement approaches fail to encourage or enable multi-disciplinary teams to work together effectively. Not all IPD project teams achieve their potential collaboration because their workplace culture may not necessarily support this in practice. Chapter 10 presents a detailed discussion and analysis of the nature and culture of a collaborative workplace and what features and characteristics support or place barriers to achieving that state. Chapter 11 discusses the knowledge, skills, attributes and experiences required for IPD work and also details dimensions of jobs/tasks that will also be discussed here, though not in the same depth as in Chapter 11. Chapter 12 focuses on human resource management implications for IPD and Chapter 19, on governance and IPD, also links to this present chapter in understanding trust and commitment and how disputes and disagreements may be managed within an IPD context. This chapter responds to the questions: 1 How do IPD projects facilitate project-participant engagement that results in trust and commitment to common project goals, plans and actions? 2 What are the necessary behavioural antecedents? 3 How are these behaviours engendered? 4 How does this impact the way that conflict and dispute management in IPD occurs? 264

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This chapter is structured as follows: 1

An opening discussion on the concept of workplace engagement and its trust-related antecedents for projects in general and IPD forms in particular, emphasising commitment, trust and value propositions and how communication impacts on workplace. 2 Discussion of the principal requirements for effective integration, namely: planning and articulating common, agreed and consistent aims, goals and strategies, including the role of communication; shared mental models and dialogue concepts when moving from advocacy to shared values and goals; and moving from an integrated plan to integrated action. 3 The psychological contract as a vehicle for the integration of common aims, goals, strategies and actions. 4 Dealing with conflict in IPD.

Workplace engagement and IPD What kind of workplace engages its employees and creates an environment that supports and normalises behaviours consistent with collaboration and IPD? Bakker suggests that ‘Employees who are engaged in their work are fully connected with their work roles. They are bursting with energy, dedicated to their work, and immersed in their work activities’ (2011, p265). Chapter 2 takes an institutional-theory perspective on engagement (Scott, 2014). Norms, ‘the way we do things here’, provide one of three pillars to explain how attitudes and action become institutionalised. A second institutionalisation pillar is the governance structure that provides the rules, regulations and formal guides, indicating how the organisation should operate. The remaining pillar is the cultural-cognitive pillar: the way that people make sense of the governance arrangements based on their norms and their sense of agency. Agency is a technical term originating in the concept of an agent acting on behalf of a client. It impacts perceived freedom of autonomy and creativity (Dietz and Burns, 1992). Mullaly (2014;2015) extends our understanding of agency, of people making decisions in project teams, and how they feel constrained or liberated by their operating governance framework. This institutional and agency perspective helps us better understand how a workplace may be shaped and why, for example, we may trust person X working in organisation Y and yet may not trust X if working in organisation Z. It is the same person with the same norms and ethical standards and expertise. Why might we change our propensity to trust X in organisation Y as opposed to Z? The answer most likely lies with the organisational environment and what the person X may or may not do, or feel compelled to do, within that organisational context. Structurally, because of the way that IPD project or programme agreements are designed and drafted, the expectations about openness, information sharing, respect and mutual understanding of each participant’s situation all support generating trust between individuals within the IPD organisational vehicle. As we see in Chapter 10, relating to organisational culture, the IPD form has very different designed-in cultural characteristics. The way that people engage and collaborate within organisations may be seen to be determined by the levels of trust and commitment within the organisations and how these are consistent with each person’s value proposition. It depends on how prepared people are to be open and honest with each other and how that generates the necessary energy and capability to not only share ideas about how they might see a problem or opportunity, but also how they collaboratively work through possible ways to constructively solve problems and grasp opportunities (Thompson, 2003). Schaufeli and Bakker proposed a useful definition of engagement, 265

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‘as a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption’ (2004, p295). The workplace engagement construct, therefore, is largely associated with two core concepts: trust within that workplace (and what is meant by ‘trust’) and the level of commitment by individuals and organisations. We treat each of these two concepts separately and then integrate them into a model that we present in this section to explain how commitment may be engendered and how it operates effectively within an IPD organisation.

What do we mean by trust? An early trust model proposed by Mayer, Davis and Schoorman (1995, p715) provides a good starting point for our discussion on trust. The trusting party (trustor) is willing to invest trustcapital in a person or entity (trustee). Both potentially benefit from trust by not being subjected to an onerous governance arrangement that requires high transaction costs to be incurred (Williamson, 1979). Thus, perceptions by both parties are important considerations. Mayer et al. developed a simple three-factor model of perceived trustworthiness. Their model takes a dynamic perspective of how the trustor views the trustee’s implied intentions and actions. In essence, it says that the person (or organisation) to be trusted has certain characteristics (ability, benevolence and integrity) that are interpreted by the trustor who has a propensity to trust. This trust is tested by an event situation in which the trustor is vulnerable to the trustee and the perceived outcome and its interpretation by the trustor shapes the next cycle of a trust-testing event. Figure 13.1 illustrates our adaptation of the original Mayer et al. (1995) model to include influences not previously considered by them. These influences are particularly relevant to the IPD context rather than the business-as-usual (BAU) approach.

Clarity of outcome Mediated impact of overall organisational culture

Mediated impact of commitment type

Trustor’s values, attitudes and moods

Trustor’s contextual understanding level

Risk taking in relationship

Trust

Risk Event

Integrity

Factors of perceived trustworthiness

Clarity of context

Trustor’s willingness and ability to make an informed judgement of the context and outcome

Perceived Risk

Ability

Benevolence

Judgement maturity

Trustor’s innate trust propensity Level of trust is re-calibrated

Figure 13.1  Trust model (Source: adapted from Mayer et al., 1995, p715)

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Outcome tested ?

Outcome evaluated

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Ability, benevolence and integrity The first factor within the red-coloured dotted boundary box relates to trustee characteristics as perceived by the trustor. The first factor is ability and is their capacity and competence and ability to deliver, at the trustor’s expected level, what they promised. The second factor is benevolence. This measures the trustor’s judgement about the trustee’s intent to benefit the trustor and to do no harm to the trustor. The third factor is integrity. The trustor judges that the trustee adheres to principles that the trustor finds acceptable and that the trustee’s past actions and rhetoric, together with any other available knowledge about them, confirms that they will do what they say they will do. In other words, the trustee is credible, reliable, and honest.

Mediating commitment We suggest a new mediating factor, the commitment type, in our model in Figure 13.1 that adds a contextual influence to the trustee’s trustworthiness. This is illustrated by the red dashed box surrounding the ability, benevolence and integrity box. Meyer and colleagues have undertaken a considerable body of work on the concept of commitment (Meyer and Allen, 1991; Meyer and Herscovitch, 2001; Meyer et al., 2004) that has been widely cited. Commitment is seen as a concept explained at three levels by three types of commitment. At the lowest intensity is continuance commitment in which support is given because the cost of withdrawing that support is greater than maintaining an adequately minimal level of support. One would not expect the trustee to go beyond the minimum expected level of effort. From the trust perspective this could mean the trustee being mainly concerned about subsequent cost and impact to them rather than concern for the trustor. Meyer et al. suggested a second commitment type they call normative commitment. This is based on norms, tradition and feelings of loyalty, so that there is a perceived obligation to remain committed. Again this trust context does not imply that the trustee is strongly enthusiastic enough to be trusted. The third type of commitment that Meyer et al. identify is affective commitment. This form is a ‘want to’ commit with stronger emotional bonding feelings. In trust terms, the strong feeling to want to be trusted provides a strong message of intent. This commitment context is ‘read’ by the trustor.

Mediating overall organisational context A further contextual factor is the overall trustee’s and trustor’s organisational culture. The trustor may be positioned in a workplace environment that may range from encouraging trust in others to being pathologically paranoid about the trustworthiness of others. A similar context may exist for the trustee. Trustor propensity to trust, therefore, is shaped by their agency and how they view the trustee’s agency may be impacted by the trustee’s organisational influence (Rousseau et al., 1998). From an institutional-theory perspective, this understanding level relates to the trustor’s cultural-cognitive disposition. They tune their innate propensity to trust based on their understanding of how norms and governance influence both theirs and the trustee’s organisation.

Propensity to trust Mayer et al. argue that the three factors of perceived trustworthiness are central to the trust concept but that trust is also mediated by the trustor’s propensity to trust. Mayer et al. indicate that this propensity to trust is dynamic. We use the term innate as the latent or default capacity 267

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to trust that the trustor possesses, which is also influenced by learning from ‘trust-test’ events previously encountered with the trustee.

The risk event Figure 13.1 shows a shaded box that indicates a risk event occurring. Mayer et al. (1995) argue that this is simply a process whereby there is a risk-taking event in the relationship. The trustor perceives the risk as it takes place. This presents the trustor with the choice of whether to evaluate the outcome of the test, and its impact, and the way that it may re-shape perceptions of the trustworthiness of the trustee, or to avoid doing so. We suggest that one result of that choice is to avoid or defer risk-impact evaluation, in which case the innate level of trust propensity will probably remain unchanged. However, the more likely result is that some level of risk-outcome evaluation will take place. Figure 13.1 explains the dynamics of a risk event (the grey box content) and how the risk is perceived and the outcome result anticipated, based on the innate propensity-to-trust level. However, we argue that the trustor does not automatically perceive a risk and the outcome to automatically update the trustor’s propensity to trust, as is indicated in the Mayer et al. (1995, p715) model. We suggest that a more cognitive, intensive process takes place. Kahneman (2011) offers a model of two systems of thinking: thinking fast and slow. System-1 thinking operates automatically and quickly, with little or no effort and no sense of voluntary control (p21), while System 2 allocates attention to the effortful mental activities that demand it, including complex computations. The operations of System 2 are often associated with the subjective experience of agency, choice, and concentration (p22). Figure 13.1 illustrates System-2 thinking at work as a more conscious effort although we also envisage how System-1 thinking could lead to similar inputs, as indicated in the figure, but the cognitive intensity is lower and more automatic and intuitive. The trustor’s willingness and ability to make an informed judgement in evaluating the risk-event outcome is subject to several influences. An explanation follows. Figure 13.1 illustrates, for example, that the clarity of the outcome may be important. Often the outcome may have a delayed impact or be assessed symptomatically rather than causally. Senge (Senge, 1990; Senge et al., 1999) shows us how system thinking can open up new ways of seeing situations, particularly when considering lead and lag effects. There may also be contextual issues at play: such as the time or resources available and required to make such an informed judgement. The trustor’s level of maturity at reflecting and evaluating also has an impact on their willingness and ability (and motivation) to make a sophisticated evaluation. In a recent paper on construction problem-solving Davis, et al. (2018) presents a model of a process that is supported with an analysis of 384 professional excellence-awards submissions between 2011 and 2014. What can be drawn from this work is the manner in which professionals reflect on problems, solve them, and provide innovation through their solutions within constrained resources, scope and time. Finally, we suggest that trustor’s values, attitude and mood may influence a choice to evaluate and affect the depth and quality of any evaluation. George and Jones (1997) developed a theory of values, attitudes and moods (VAM) in which a person’s values (the desired end states that they believe could be realised through applying a specific set of behaviours), their attitudes (behavioural orientation towards their workplace, co-workers, personal motivation, etc.) and their moods (how they feel at any given time and how that affects their world view). These VAM factors play a part in how the risk event is perceived and how it provides feedback to update the trustor’s propensity to trust when the next risk event is encountered. 268

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Values, value proposition and commitment In the discussion so far we have introduced concepts of values and commitment. The values held by a person are governed in part by cultural influences (discussed in Chapter 10) but as George and Jones (1997) observe, it is a ‘generalized knowledge structure or framework about what is good or desirable which develops over time by an individual’s involvement with the world’ (1997, p395). We can appreciate how values and value systems will affect a person’s perception of the workplace environment and how it may impact their feeling of trust and commitment towards their organisational work teams. The commitment concept introduced above (Meyer and Allen, 1991; Meyer and Herscovitch, 2001; Meyer et al., 2004) with its three types of commitment, continuance, normative and affective also shapes the workplace experience and influences the level of workplace engagement. We have seen in our research into IPD alliancing that participants engaged in these projects appear to have a different value proposition to those engaged in BAU project delivery forms. Value proposition refers to the value placed on a transaction and may be seen as comprising three types: ‘total benefits, favourable points of difference, and resonating focus’ (Anderson et al., 2006, p92). The IPD workplace engagement perspective relates to the value proposition of those working in project teams. Chapter 4 discusses value in more depth and, in particular, value as perceived by various project stakeholders, including the project client-owner. Following Anderson et al. (2006) the table below (2006, p92) describes three types of value proposition.

Total benefits From our research we have seen numerous examples of quotes from those we interview about what they expect and desire from alliances in Australia. These can be summarised as having an Table 13.1  Value proposition for the IPD workplace environment Types

Anderson et al.’s type explanation

IPD workplace context illustration

Total benefits

All benefits customers receive from a market offering. Market here means attracting and retaining key talent for the project. All favourable points of difference a market offering has relative to the next best alternative. The one or two points of difference (and, perhaps, a point of parity) whose improvement will deliver the greatest value to the customer for the foreseeable future.

Workers expect reasonable recompense, learning experiences, a safe and friendly workplace. Autonomy and high-quality feedback. Respect and recognition. Many of the points of difference relate to the ‘ambience’ of the workplace and the autonomy and feedback experiences. One major point of difference is the open and respectful norms and interdisciplinary collaboration that is anchored into IPD-alliance expectations. IPD also has a bestfor-project outcome focus, rather than just being concerned with one’s own tasks or job.

Favourable points of difference

Resonating focus

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opportunity to achieve their potential. They learn more from their experience and are exposed to new ideas through IPD collaboration and interdisciplinary dialogue in a way that they had not experienced before. They had positive experience of the job/task dimensions of autonomy to try new things and get feedback where the impact of their work was recognised and communicated. One typical quote, among hundreds of similar ones from our research database, is cited here: I was . . . talking to a contractor that I probably worked with 20 years ago . . . they’ve actually done a number of projects with the Alliance now, so they’ve gone through this learning curve and enhanced their systems and their tools, and the comment that was given to me is that they’re now there, they’re actually using these systems and tools to win work that they weren’t winning before with larger and higher tier companies and contractors, and that the feedback they’re getting is wow, this is really good stuff. This is better than what some of the other contractors have got. So it’s part of business development. That contractor is actually from the growth through doing the alliance work, has really moved their business into another level. Participant interview P36 (Walker and Lloyd-Walker, 2015, p215) This quote identifies some of the benefits that research participants we have interviewed tell us about. Not one of the 100 or so people we have interviewed across our research projects on IPD forms of delivery have mentioned pay or financial rewards as being their main value proposition. This is most likely because they are paid well, at market rates, and so their motivation is more driven by higher-order achievement and growth factors than by lower-level survival and safety concerns.

Favourable points of difference Following observations about higher-order motivational needs that IPD alliancing can provide, we suggest that favourable points of difference centre on the way that alliancing is conducted as compared to more traditional BAU delivery forms. BAU can place project team members in highly stressful situations where they may feel compromised by bargaining ‘hard’ with other project team members in their employer’s interest even when they may feel, or know, that this action is unfair or unethical (Bredillet, 2014). This conflict is reduced substantially when the agreed behaviours (through an alliance agreement for example) are specifically stated to be respectful to other teams on the project and to genuinely collaborate to achieve best-for-project rather than self-interest outcomes. For example, in research undertaken on the National Museum of Australia alliance in terms of a no-blame workplace environment helping ease the stress of experimenting and being innovative we surveyed a group of 14 team professionals in various project alliance teams. In response to the statement ‘when problems arise we concentrate on solving them rather than trying to find somebody to blame’, based on a scale range of between zero and 100, the response was 43% for BAU and 93% for the alliance (Walker, 2003, p285). In a more recent research project we interviewed 22 IPD senior practitioners mainly from Australia but also from New Zealand. One of these practitioners described how alliancing felt compared to design and construct (D&C) projects (IV02 – Walker and Lloyd-Walker, 2011, p12):

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The biggest difference is the lack of conflict. The basic assumption for alliancing is that you’re all on the same team and if you can keep everybody on an even keel, then you’ll end up with an excellent project. With a D&C, you’re automatically in a conflict or competition, rather than conflict, you’re in a competition to see who can get the most out of the contract. The client is obviously aiming to maximise his receipts and the contractor is limiting his costs, so you’re automatically in a conflict situation there with the contractor basically trying to outdo the client. . . . agreements are reached before you even start doing any work. I think that’s the important part about it. We had an alliance PAA, a Project Alliance Agreement. We were all signatories to it. A lot of the development of that alliance agreement came out of workshops with the contractor and the client – XXX is the client – was prepared to develop and agree to. So a lot of the problems that are normally associated with uncertainties within the contract have been thrashed out. The difference in the ‘workplace feel’ between alliancing and BAU project delivery is explored by Walker and Lloyd-Walker who use the term ambience to describe the ‘mood, feeling and sense of atmosphere generated by this form of project delivery within a specific alliance entity’ (2014, p3). The above quotation illustrates that project’s workplace ambience.

Resonating focus Differences between an IPD alliance and a BAU procurement approach centre on the way that alliance norms are supported by the regulative pillar of the project alliance agreement (PAA). These norms include being open and respectful by all alliance participants towards each other. This is essential because another point of difference between IPD alliancing and BAU delivery forms is that innovation is encouraged and this is based on the premise of a no-blame culture that encourages experimentation to gain both incremental and breakthrough innovation. Cross-team multi-disciplinary collaboration also requires an open and respectful workplace environment in which each team member’s expertise is valued to arrive at potential innovative solutions and each team member’s contribution to challenge assumptions held that may block divergent thinking that can trigger innovation. The alliance no-blame agreement has been explained by Lloyd-Walker, Walker and Mills (2014b), based on an Australia building-project alliance case study and also very clearly explained by one of the acknowledged experts of alliancing, Jim Ross in (Ross et al., 2014), for example, but also in Ross (2003). The no-blame part of a PAA relates to a clause that prohibits alliance parties from suing each other unless there is clear evidence of criminal activity or gross incompetence (Department of Infrastructure and Transport, 2011). This provision triggers two major benefits. First, it facilitates innovative thinking and action because it encourages improvement-experiments. Second, it also leads to a project-specific all-alliance-participant insurance paid by the building owner. This saves considerable money on individual-participant insurance premiums. These benefits arise by removing the risk of litigation. There is no need for the level of insurance cost cover than would be the case for an identical project delivered under a BAU more traditional approach. The previous quote hints at the advantage of IPD alliancing at one level that appealed to the person quoted. Another quote from participant P37 from the Walker and Lloyd-Walker research, in which 36 practitioner experts were interviewed, also illustrates the way that respect across disciplines and teams was engendered (2015, p202):

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when we say things like no-blame, that doesn’t mean that you can’t challenge. So . . . part of our induction was saying, look, it’s alright to challenge somebody, it’s alright to say look, you’ve stuffed that up, as long as you do that in a respectful manner. So we did spend time, and we did this without facilitation. . . . we really tried to just induct people into what was required, but at the same time, have the courage or the strength to actually challenge it when things weren’t right. So as I say, I know that there’s two or three [people] that had to go because I had to challenge them and say, look, and after a couple of times say this isn’t working. . . .standing up and saying bloody designers are hopeless and they’re always late with designs, and they’ve got no concept of budget and – that behaviour is unacceptable. It’s unacceptable because—not because I say so, but because it doesn’t align with our behaviours, we’re all one team, we’ve got – we all share an equal role. So reminding people that the designer is part of the overall project and the overall program performance, not just in getting his IFT drawings out. His performance is also linked to the overall project. He’s part of the team. It’s an integrated team. So we really did spend quite a lot of time trying to induct and train people of that. We would do things like fortnightly communication workshops where we really tried to build that team spirit and break down that design and construct thing. I suppose the other was that it comes back to the culture of the team. So the things that we thought of made up a culture of systems, symbols and procedures. So things like badging. It is clear from this quote that the alliance form of agreement has a distinct focus that resonates with participants who seek collaboration and to better understand not only how other discipline team members think and act but how they see the world. IPD does not suit everyone and, as the above quote reveals, choosing people who want to thrive within this kind of workplace should be recruited, inducted into this approach and supported.

Principal requirements for effective integration Team integration occurs at several levels. One level is structural: how the whole project delivery team of multi-disciplinary teams is configured. Another level is emotional or psychological: how people are made to feel united in purpose as a single entity. Linked to the latter level are the behaviours that support effective integration. The previous section outlined some of those behaviours that engender trust and a supportive work environment for people to engage in the project’s effective delivery. In essence, people’s behaviours are consistent with people from a range of diverse disciplines, each with their professional norms and traditions, and different home organisations that also have their own separate norms and traditions. As explained earlier, from an institutional-theory perspective, each team within the overarching project ‘one-team’ concept has and adheres to its specific norms. IPD is different from D&C, for example, in that the IPD-alliancing team comprises representatives from the project owner, often the facility (project product) operator, design team(s) and delivery contractor(s). In other project delivery forms such as D&C these teams are separate, have separate agendas, reporting structures, recruitment strategies, responsibilities and accountabilities. Therefore, they remain integrated only to the extent that participating teams aim to deliver the project through cooperation and coordination of each team’s activities. 272

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Structural integration Integration in the traditional BAU context is loosely coupled with overall coordination managed through a project-integration group with representatives from the teams. Often that integration group is directed and chaired by the entity contracted to deliver the project (usually the contractor). The design team and project owner may be represented at a high-level project-integration group committee so that contracted project deliverables may be clarified and any contract variations discussed and authorised. However, this is a coordination exercise and each party acts collaboratively only to ensure that their individual deliverable is executed consistent with what they have contracted to do. Similarly, at the site coordination level the contractor will usually hold site meetings in which subcontractors, major component suppliers and the design team’s representative discuss and deal with operational aspects on getting on with the task of project delivery. Contracts for the design, contractor, subcontractor and component supplier teams are all framed with ‘you shall . . .’ contractual language so that each team’s responsibility and accountability is clear and individually spelled out. This may be contrasted with IPD and, in particular, the PAA. These are framed with a different, subtle but profound, emphasis. As Ross (2003; Ross et al., 2014) points out, the PAA purposefully uses the language of ‘we’ not ‘you’. The reason that contracts between participants that are signatories to the PAA use responsibility and accountability terms ‘we’ and not ‘you’ is to engender and create a ‘one-team’ mindset that is not just supported but is required by the PAA. The contract form specifically frames performance based on the project’s delivered end-product and not based on the performance of individual teams engaged on the project. This enables and reinforces the concept of a best-for-project mindset. The PAA also outlines the pain- and gain-sharing arrangements. These arrangements provide a rigorous process of establishing the agreed project cost, delivery time and other agreed key- result areas (KRAs). Chapter 26 discusses KRAs and associated key performance indicators (KPIs) in greater depth and Chapter 19 discusses IPD governance aspects more fully, including how alliance leadership teams (ALTs) at the participant organisation’s executive representative level operate to strategically guide the project. These ALTs also provide a structurally unifying element in creating a one-team mentality (see Chapter 19 for more details). The way that the PAA legal framework formulates the way that IPD contractually varies from BAU is highlighted by Ross et al. (2014, p11). •• ••

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‘The pure alliance legal and commercial framework ‘changed the game’ by sharing most or all risks between the parties, so the parties would genuinely ‘all win or all lose together”’. This meant there was no longer any incentive to argue over which party bore a particular risk or to blame each other – instead the commercially sensible thing to do was to work together as one team in all circumstances – exactly the kind of behaviours required to succeed in high-risk environments. The concept of unanimous decision-making was a stark and legally tangible symbol of how much the game had changed from the traditional ‘master–slave’ relationship’.

Research that investigated alliancing where 52 IPD senior-practitioner experts were interviewed (Walker, 2016, p46) provides an illustrative quote that illuminates how the ‘we’ form of address in a PAA affects the structure and behaviours of teams in cementing a best-for-project one-team mentality. In that report, participant P-17 is quoted as saying: 273

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I’ve kind of come to the conclusion that if you’re talking about alliancing as we’ve done it here, I haven’t seen any example that actually goes as far as what we would take as a normal alliance in terms of absolute collective responsibility in the full legal sense, where risks are shared to a risk award model and there is absolutely no avenue for blaming each other legally because the contract is written in the language of we and collective responsibility. I haven’t seen anybody show me an example that goes that far [in other countries]. But in terms of, if you just step away from that purist form that we seem to have practised here, a lot of the other areas of, say, integrating supply chain, managing relationship contracts across a whole range of different types of forms of contract into a more strategic program, it seems to me that the UK is well ahead of Australia in that area. And in the US, I find the way that they’ve approached lean construction in the States is really interesting how they’ve had the Lean Construction Institute since 1997 and they’ve really pushed what you’d call the whole operating system of construction and applying some of the theories of lean manufacturing and engineer honour into a construction environment far more successfully than we’ve done here, and only in the last few years have they really realised that to do that more effectively they have to start playing around with the commercial and leadership framework, and so they’re kind of linking it now to integrated project delivery and integrated form of agreements [IFOAs]. So they’ve come at alliancing from quite a different direction, whereas in Australia, over the last 15 years we came from a background where we experienced an extraordinary amount of adversarial behaviour through the eighties and early nineties, played around with partnering, had some successes, but then moved to a point where the drive was to play around with the commercial and contractual framework and associated with that is change to governance and leadership arrangements and that has brought about some radical changes, but we’ve never really looked at the operating system. Participant P-17.

Goal and one-team planning integration The one-team mindset is predicated upon two elements. First, individuals in their separate multi-disciplinary teams are united through a common set of goals and directions so that they know where they are heading as a united team. This may be achieved at the strategic level through all participants agreeing on the overall project delivery strategy and also at the operational level in how strategic plans are translated into day-to-day operational tactical working plans. Second, their behaviours and motivational energy are focussed on the achievement of a best-for-project outcome so that this objective frames planning and action. The unifying influence as a shared vision of the future has been shown to be a powerful motivator for affective commitment within a project delivery context by a number of researchers (Lynn and Akgün, 2001; Christenson and Walker, 2004; Christenson, 2007). Projects are initiated by the project owner identifying a gap in the way that strategy can be delivered which may be filled by the outcome of a project. This envisioning leads to a project brief and from that vision the scope of a project is developed (Morris, 2013, p125). In traditional BAU projects the project owner and design consultant (architects for buildings and engineers for civil infrastructure work) drive the briefing process, but the process is somewhat different for IPD projects. IPD, particularly alliancing, involves the project owner and design team with the project delivery team at the front end of the project. This not only leads to the scope and detailed plan development but also helps concept vision translation and transition development. This means 274

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that the project owner, designer and deliverer team share the project vision as they jointly and collaboratively work through the project-realisation plan details. For IPD alliancing, the process of the development of the target outturn cost (TOC) forms the basis for strategic and detailed planning for the project that integrates the multiple teams into an effective, united ‘one-team’. This process is more than simply interpreting a brief or specifications to arrive at a cost and time commitment but is a process in which a project-realisation strategy is developed that addresses a whole range of key performance areas (KRAs). The TOC development process is discussed in detail in Chapter 27 but a summarisation for this chapter is presented next to frame this chapter’s discussion. Australian and New Zealand alliancing frameworks have been evolving with a more recent trend moving away from a single TOC approach in which the alliance team is selected through a competitive process and they immediately begin developing the TOC with the client (the project owner PO or the owner’s representative alliance participant OP). This has been largely replaced by a competitive TOC process in which two alliance syndicates compete with alternative proposals for a project with limited initial engagement with the OP. This latter approach is not without its critics, as the study by Walker (2016) reveals. The competitive (sometimes called a dual TOC) process has been argued to deliver better value for money (Wood and Duffield, 2009; Tamburro and Wood, 2014). However, others argue that splitting the project owner group into two separate and independent teams, each to collaborate with two competing alliance proposal syndicates in developing two competing delivery solutions, presents disadvantages that outweigh any potentially lower-cost solution outcomes (Consult Australia, 2010). The main concern, relevant to this chapter, is that the dual TOC process reduces the level of OP engagement with the competing design-delivery syndicates because the competition must be fair and transparent with no favouritism being shown. In Walker’s (2016) study, in which 52 highly experienced alliance practitioners were interviewed, several concerns about the dual TOC versus the single TOC approach were raised. The first concern is that the competitive nature of the dual TOC forces syndicates to focus on lowest cost because this resonates with many people as meaning value for money. This focus may inhibit and restrict the team from considering radical innovation and it also inhibits trust in the project owner because, out of necessity, the project owner cannot fully engage openly with the syndicates until the PAA award stage. The difference between single and competitive TOC is explained by S-12 interviewed in the Walker (2016) study. in a dual TOC process the tendency is for the clients to have a lot less involvement with the teams than in a single TOC process. In a single TOC process there’s more willingness within the clients to put lots of their people into that framework, so that they’re actively involved in the development of the solutions. The probity requirements around the dual TOC processes in my observation tend to reduce the numbers of people who get involved, just to reduce the risk of that leakage that you’re talking about. So you don’t get as much benefit of that direct interaction. S-12. While the Walker (2016) study acknowledges that this may be temporary because once the PAA is awarded the OP can become fully engaged and that often trust and commitment builds to a high level, nevertheless, valuable trust-building time is lost and the delivery solution accepted may not have been as ‘clever’ or ‘effective’ as may have been the case for a single TOC. Whichever TOC approach is adopted, the end result is that the project owner, often joined with the facility operator, and successful design-delivery syndicate, combine a united team with 275

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a clear strategic vision and also a clear operational vision of how to deliver the project to meet or exceed all KRAs. The TOC becomes the basis of the plans and all parties are motivated by the PAA and its incentivisation measures (the pain- and gain-sharing provisions). Another IPD measure that facilitates a united team with a shared, clear project delivery vision is the way that infrastructure alliance projects use substantial co-locating as a team-integrating and fluid communications mechanism. The project teams in alliancing in Australia, New Zealand and elsewhere co-locate the management teams and many of the subcontractors. This is often on-site or close to the site (which may be a long road, rail or pipeline). This encourages all team members from the alliance to become a single entity and often the alliance members identify with the XYZ alliance. Their email addresses, badges on their hard hats and site clothing would bear the alliance name and icon badge. This facilitates the feeling that they are one team and engenders trust and commitment and a shared sense of purpose. As one alliance participant, P-34, stated (Walker and Lloyd-Walker, 2015, 179): [X-team] co-located as well, had a team that co-located, and again, you have individuals who don’t quite get it, but generally quite good about, you know, we’re here to get this project completed. [This] Didn’t extend . . . to every single team outside the alliance, but certainly to the major ones, we got the collaborative approach working with the major subcontractors. The evidence for alliance studies suggests that co-location and branding the alliance name as the unifying symbol helped facilitate a united one-team and a ‘we all-sink-or-swim together’ mentality. The Alliance Management Team (AMT) draws from each alliance participating organisation. For example, alliance participant P-28 stated (Walker and Lloyd-Walker, 2015, 221): You had the disciplines of the alliance leader, you’ve got the clients representative, you’ve got the construction, you’ve got the design interface manager, and you’ve got your business manager, your quality person and the safety person. It wasn’t a big AMT, but it was very, very focussed and they were very, very visible on-site, and they were always around at a number of activities we had. They were expected to be there, but they just did that as part of being proud members of the team. We were very lucky in getting some really high-quality people in the AMT. The above discussion has been somewhat alliance-centric but the same sense of belonging has been clear in other forms of IPD. For example the quote P-17 in (Walker, 2016, p46) earlier refers to collaborative collective-responsibility practice in the USA under the integrated form of agreement (IFOA) and in the UK as seen on projects such as T5 and Crossrail. Also, Fischer et al. (2017) refer to examples of innovative solutions coming from participants taking what they call ‘ownership of the whole’, such as a flexible sprinkler head which may have sounded at first like a trivial minor innovation but, because it evolved out of the subcontractor’s improved understanding of how the sprinkler installation may impact other trades and services, they arrived at this simple but effective innovation (2017, p303). In the USA, this kind of close collaboration between the contractor, subcontractor and designer with the owners and operator approval input is evident throughout the Fischer et al. (2017) study. We see examples of this attitude delivering positive united-team results from innovations on Crossrail (Davies et al., 2014). Finally, in terms of a unified position for the one-team at the activity level, we see in the lean construction ‘last-planner’ approach a further example of deep collaboration and unity of purpose. The last-planner approach (Ballard and Howell, 1997; Ballard, 2000) recognises that 276

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plans rarely work out as initially intended and that activities should only commence when the resources and people are ready to complete the activity. AlSehaimi and colleagues provide an account of a successful case study of the last planner in action and also refer to the literature on many other cases. They define the last-planner system (LPS) citing the work of Ballard: The ‘Last Planner’ is the person or group accountable for production unit control, that is, the completion of individual assignments at the operational level (Ballard, 1994). In essence, LPS enables the collaborative management of the network of relationships and communications needed to guarantee effective programme coordination, production planning and project delivery. It was developed to make programmes more predictable, thereby improving the chances of delivering projects on time. (AlSehaimi et al., 2014, p53) This approach has been successfully used on many projects. By focussing the whole team, and in the case of IFOA, Alliancing and T5 type projects, the design team and project owner are also involved to clarify any missing information and to make any other helpful suggestions, a consistent and unified view of the way forward is achieved. In concluding this section, it is worth reflecting on how this level of commitment is achieved and what may be special about the background culture and communication style that may be adopted in these cases. An interesting point relating to this is made by Fischer et al. (2017, p302). They cite Senge (1990) and the meaning of the term dialogue. Dialogue means that people in a collaborative dialogue do not seek to persuade each other of the merit of their position but rather they use the conversation to explore and understand each other’s perceptions and perspectives, so by sharing these and working through a shared understanding, often surprising new ideas emerge that improve the result. In cases of collaboration such as the alliances, Lean IFOA and the T5 and Crossrail approach we see examples of true dialogue at work.

The psychological contract as a vehicle for integrating common goals and action For many years there has been a call for cultural change within construction in an effort to deny the common expression ‘your loss is my gain’ (Rahman and Kumaraswamy, 2004; LloydWalker et al., 2014a). More recently the productivity commission have suggested a need for radical cultural change to reduce adversarial conflicts and increase productivity levels through integration of fragmented functions as have been described in this chapter. We suggest in this chapter that the answer is different teamworking approaches (Rousseau, 1995; Sparrow, 1998). The psychological contract (PC) is a useful conceptual theory in project delivery as it expands the level of thinking from the formal written contractual document between two or more parties/organisations to a contract within and between individuals’ psyches. In the past it has been referred to as a ‘personal deal’ or a contract ‘between the lines’. So, in essence it is the unwritten expectations of an employment relationship based on mutually accepted promises and obligations, as distinct from a formal codified employment contract (Rousseau, 1990). It has been studied extensively in human resource management as far back as the 1990s (Sparrow, 1998; Davis et al., 2017), (Newaz et al., 2016), having more recently come to the attention of construction researchers in the procurement and safety domains see (Arnold, 1996); (CIPD, 2003). One of the major arguments in PC theory is whether it can be regarded as a contract in comparison to formal contracts that have stipulated content with clear-cut parameters (Sparrow, 1998). Contrary views argue that a PC offers a perspective on 277

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a more realistic basis according to the parties’ perceptions and can therefore have a greater influence than a formal contract (Deery et al., 2006). Sparrow (2017) suggested that interaction between employment contracts and the PC affected legal terms and conditions, together with perceptions of obligation. In terms of strict comparison, a PC is an implicit reflection of the employment relationship resembling a legal contract, but on a broader scale. In the instance of a breach of a PC, adverse effects may manifest in the procurement organisation and employees, and these are similar to the effect of penalties in more formal contract breaches, as we will (Ke et al., 2016). There are differences between the two contractual concepts, but the similarities are enough to justify the use of the term ‘psychological contract’ to signal its authority in employee relations. We suggest that non-contractual agreements and behaviours can better demonstrate the shared perceptions of contracting parties regarding relationships in construction, as they are able to practice to different extents according to will. Such non-contractual agreement and behaviours can be explained by the concept of PC, which has, as we suggest, been widely adopted in many different sectors except construction. Earlier work by Davis (Leuthesser and Kohli, 1995; Davis et al., 2017) identified a PC in construction procurement as a framework for relationships; their work aiming to identify the presence of the PC in construction project teams and catalogue its effect on procurement delivery. Focus groups and a subsequent questionnaire administered to a purposive sample of experienced construction/engineering managers identified several unique attributes. Further focus groups enabled the design of a conceptual model of PC for construction. The model suggested antecedent enabling factors, referred to as relational conditions and benefits. These led to unwritten agreements and unwritten contracting behaviours (the PC), which consequently affected team satisfaction. Advances in knowledge were identified in the new model where factors of trust, commitment, good faith and fair dealing were described as components of the PC in construction. Revealing these less tangible characteristics of construction managers in the PC served to provide a novel framework from which to anchor an understanding of procurement teams and enhance decision-making capability in the PAA or indeed other relationship styles of project delivery. To exemplify PCs, in this section of the chapter we have chosen to view relationships and, more specifically, its endearing characteristics identified earlier in the chapter, being: engagement, trust, commitment and benevolence, through the lens of the PC. Throughout this chapter, several quotes from various teams and individuals who have participated in the writer’s research over many years are utilised as industry exemplars of the research. They appeared in the sections entitled: Total benefits, Favourable points of difference; Resonating focus; Structural integration; Goal and one-team planning integration; Conflict from a positive perspective; and Conflict from a negative perspective. Reviewing these particular quotes serves to highlight the PC perspective that the respondents have unwittingly, but not unusually in our research experience, chosen to articulate, thereby corroborating and triangulating the PC model and its underpinning research. For example, in the Davis et al. (2011) work, several questions measured relational orientation using a scale adapted from the Leuthesser and Kohli (2005) original instrument designed to determine the extent of initiating, signalling and disclosing behaviours – essentially, the extent that partners reveal sensitive information about themselves and all of their operations. The items in the scale reflected perceptions about the partner across these constructs in the early phases of a relationship. In the conceptual model, these were described as unwritten contracting behaviours. Importantly, these closely aligned with recent construction management research that identified collaborative goal setting and trust benefits to the procurement team’s engagement on relational style and alliance procurement (Davis et al., 2017); (Morgan and Hunt, 1994). 278

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In the seven quotes selected for this chapter, the respondents made unequivocal reference to initiating behaviours – (proactively taking the initiative to better understand you). They highlighted lowering costs and gaining benefits from identifying and obtaining mutuality in decision-making, and understanding their partners’ needs and interests. This was highlighted in the quotation referred to in the Total benefits section, together with the comments highlighted within the quotation within the section headed Favourable points of difference. With respect to signalling behaviours (the extent that partners divulge product or pricing information in advance), many respondents made reference to the commercial contractual and legal framework that would drive beneficial change associated with Structural integration that we have highlighted in a preceding section in this chapter. Considering disclosing behaviours (the extent that partners reveal sensitive information about themselves and or their operations), once again it may be observed that the sample spoke in detail about their communication workshops and teambuilding to break down that ‘design and construct thing’. Other issues associated with this PC construct are well articulated by project manager respondents in the section above entitled Resonating focus. These features are collectively described as unwritten contracting behaviours, they are the essence of PC and we argue that a positive PC, one that has been catalogued by the respondents, serves to provide additional satisfaction in the project and indeed the process outcome. Another component of the PC is the unwritten agreement and this is formed by the following constructs. We will describe the construct, its underpinning foundations and provide an example from the sample whose quotations we have used in the main body of this chapter. In Morgan and Hunt (1994), instrument ‘trust items’ used scales (Rousseau, 1996) specifically developed to understand perceptions of suppliers in a procurement relationship. The measure of trust captures the level of reliability, integrity, and confidence within the relationship. In the seven quotes selected for this chapter it is clear that the respondents were positive about individual’s traits associated with trust. Discussion in the quotation that framed the section on Goal and one-team planning stands out where there was a distinct discussion about the benefit of single TOC processes when compared to the concept of dual TOC processes. Similarly, the section Conflict from a positive perspective, where the escalation of problems from management team to the leadership team happened infrequently, emphasises the trust associated within the unwritten agreement that form part of the PC. Finally, the instrument reviewed respondent commitment, which represents the importance of and beliefs about maintaining the relationship. This measure reflects attitudinal elements of commitment proposed by Gundlach et al. (1995), revealing a buyer’s disposition toward a supplier firm (Ke et al., 2016). These constructs are described as unwritten agreements in the conceptual model from Davis et al. (2017). The respondents in their comments in the section entitled Resonating focus referred to ‘overall project and program performance’, suggesting the long time that they would spend ‘trying to induct people and train people’. Significantly, in our minds this suggests commitment as part of the PC. Relational conditions were measured with four factor scales adapted from Davis et al.’s (2017) extensive work to examine the extent to which employees believed certain intrinsic/extrinsic promises are made in dealing with their major partners. The four factors were: good faith and fair dealing (part of the unwritten agreement); relational benefits; relational conditions; and intrinsic relational characteristics, these characteristics are supporting facets of the foregoing constructs and to some degree mirror their outcomes. In the seven quotations selected for this chapter there are clear references to promised candid and open feedback within the relationship (see Resonating focus) whereas in the model we are highlighting this would be described as good faith and fair dealing. Similarly, relational conditions incorporate the opportunity for an organisation to learn. This aspect was 279

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accounted for in several of the quotations, for example it was suggested in the section on Total benefits that ‘they have gone through this learning curve and enhanced their systems and tools’. This all supports our notion that psychological contracts are thoroughly embedded in the procurement models that we suggest are beneficial. The overall model discussed briefly above has been presented in a recent paper; see (Senge et al., 1999), (Winch, 1998) where five hypotheses were investigated: H1: Better relational conditions and benefits would lead to a higher level of unwritten agreement between contracting parties; H2: Better relational conditions and benefits would lead to a higher extent of unwritten contracting behaviours between contracting parties; H3: When the level of unwritten agreement between contracting parties increase, unwritten contracting behaviours are adopted to a greater extent; H4: A higher level of unwritten agreement between contracting parties would lead to a higher satisfaction; and H5: A higher extent of unwritten contracting behaviours between contracting parties would lead to a higher satisfaction. All five hypotheses were supported. The findings show that the PC model may have an effect on the project performance outcome and relationship quality among contracting parties. It is therefore important for contracting parties to pay attention to unwritten agreements and behaviours when managing construction projects. The findings contribute to practice by uncovering the relationships among relational conditions and benefits, the PC, and procurement partners’ satisfaction. The managerial implications of PC are that past relationships and relationship characteristics may be taken into account in the selection of the procurement partner, and the promise of future resources, support and tangible relational outcomes is also vital. The research provides a greater understanding of the significant implications and managerial decisions leading to collaborative models of the firm–customer relationship. The taxonomies of PC developed can be used as a management tool to guide and support the adoption of relationshipstyle contractual arrangements that reduce the likelihood of firms, together with their clients, experiencing reduced productivity, leading to enhanced project success. As suggested in the opening paragraph of this section if there is a breach of the PC then sanctions may be required. However, in the spirit of the PAA, they may be dealt with in a manner incorporating mitigation and the values of the PC already described.

Dealing with conflict in IPD Perhaps the best way to mitigate the impact of conflict on trust and a positive outcome to a project is to avoid negative conflict and to encourage positive conflict that provides the impetus for positive change (Senge et al., 1999). Conflict may include disagreement about something that needs to be agreed to enable a project to advance. Conflict may also be a mechanism to trigger a change in direction. This is where a demanding client, or other team members, who challenges the status quo may induce a shock or conflict to trigger change and innovation (Nonaka and Takeuchi, 1995; Winch, 1998). Thus, conflict might be perceived as both a good and a bad thing. In this section we look at conflict as a good thing to be encouraged and then from the perspective of being a negative and detrimental force that undermines trust and focussed teamwork. 280

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Conflict from a positive perspective Earlier in this chapter we cited a quote from an alliance manager that is worth repeating in this section to illustrate a point about how alliances deal with differences in opinion. Practitioner P37, (2015, p202): when we say things like no-blame, that doesn’t mean that you can’t challenge. So . . . part of our induction was saying, look, it’s alright to challenge somebody, it’s alright to say look, you’ve stuffed that up, as long as you do that in a respectful manner. People rarely agree on everything or even understand any conversation fully. Sometimes conflict is triggered by disagreement but more often conflict is triggered by misunderstandings. Mistrust is often caused or exacerbated by power and information asymmetries that can lead to one party dominating a discussion by pressing a particular position at the expense of seriously considering alternatives. We need to be more specific about what conflict means so that we can effectively address this issue. The ‘other party’ may respond by not taking the discussion seriously, passively appearing to listen or actively opposing the more assertive party to the discussion. To counter such an outcome, scholars in the area of listening propose that both parties improve their listening competency (Burnside-Lawry, 2012). Active listening may be a useful skill in building trust at the benevolence factor level. Weger et al. (2014, p14) describe active listening thus: ‘Active listening involves restating a paraphrased version of the speaker’s message, asking questions when appropriate, and maintaining moderate to high nonverbal conversational involvement’. However, as we show in Figure 13.1, integrity is important as well as ability. Burnside-Lawry points out that sincerity (2012, p110) is also very important for listening competency as it supports the trust integrity factor. For true dialogue to take place, both parties need to have sufficient knowledge and relevant information capability to credibly present a position on an issue and be able to understand what the other person is proposing. This ability characteristic relates to the third trust factor in Figure 13.1; we suggest that there are three forms of ability involved in constructively listening within a dialogue. One form of ability is to effectively construct the position being proposed. The second form is the ability to listen to the other party in a dialogue. The third ability is exploring and analysing the two perspectives and negotiating a path that may accept either position, even though this may require a modified or agreed third way that may constitute a new way of thinking based on triggered ideas from a robust discussion. The previous quote from Practitioner P37 suggests that, in the alliance context, the need to refrain from exerting perceived position-power or information-power is not welcomed and is indeed deemed as displaying unacceptable behaviour. The call for dialogue to reduce conflict is supported at the organisational culture level as well as by the PAA at the organisational governance level. Another positive aspect of the PAA is that it requires consensus agreement at the Alliance Management Team (ATM) and Alliance Leadership Team (ALT) meetings. The rationale for this PAA requirement is that if you can achieve consensus then there are no grounds for justifying blame because consensus combined with shared responsibility undermines the logic of any argument that it is somebody else’s fault if there are unintended consequences or if planned action cannot be achieved. The process of decision-making in an alliance is very much a oneteam point of view to capture as many perspectives as possible, in order to gain a more holistic view of what needs to be decided. This means that when there is consensus it represents wholehearted support and commitment. P-20 in the Walker and Lloyd-Walker (2015, p201) study illustrates this when she states: 281

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the management team was quite balanced in terms of perspective, then it meant that we were able to have a robust discussion at the management team level. Then if we couldn’t come to an agreement with the management team [. . .] it would go to the leadership team, I would present it to the leadership team for approval, but honestly we didn’t have to have the leadership team get involved in more than 10 of these things, and there have been hundreds over the course of the project, so much things have been able to be managed by the management team. We see from this quote that acknowledging conflict, accepting that people do have different perspectives, and resolving different views by working through different perspectives, has benefits. Problem-solving and resolving potential disputes over meaning and downstream consequences can result in improved outcomes. Loosemore, Nguyen and Denis (2000) demonstrate that what they refer to as ‘System 4 conflict’, through their survey based on a comprehensive research study, provides evidence of the value of constructive conflict. System 4 most closely resembles IPD alliancing in their model. This rigorous approach tends to enhance trust from the ability, benevolence and integrity factor bases.

Conflict from a negative perspective Conflict arising out of rigid position-taking where one side of an argument, or heated discussion, either cannot or will not respect the rationale and basis of their opponent’s argument often leads to both impasse and a lack of trust by both sides (Loosemore, 1999). Indeed, one of the seeds of what Loosemore describes as ‘a creeping crisis’ stems from the problems of corporate deafness, stereotyping and others forms of lack of respect and lack of trust (Loosemore, 1998;1999;2000; Walker and Loosemore, 2003; Chandra and Loosemore, 2011). Most of the symptoms that lead to eventual breakdown in trust within relationships between parties in a project can be avoided. Key barriers to teamwork and trust and commitment were illustrated by Figure 5.2 in Walker and Loosemore (2003, p110). That figure showed that problem solutions need to overcome inhibitions triggered by parties through their status, power, preconceptions, prejudice, and professional or personal bias. Solution-building was then shown to be affected by the organisational culture, the team’s abilities (diagnostic, communication and decision-making), motivation and perceived reliability, together with organisational regulatory support. This conflict-management approach was tested using data from a study of the National Museum of Australia, which was an alliance project that readers may find more details of in Walker and Loosemore, 2003, Chapter 5 pages 112–121. It discusses: organisational issues (in their table 5.1); negotiation styles (table 5.2); organisational and cultural diagnostic support behaviours (table 5.3); organisational and cultural communication support behaviours (table 5.4); organisational and cultural decision-making support behaviours (table 5.5); organisational motivation support behaviours (table 5.6); and organisational support behaviours (table 5.8). Comparisons between BAU and the alliance-project experience show that, in general, responses were between 50% and 100% more favourable for the alliancing approach. This suggests, if it does not clearly demonstrate, that the culture and governance measures for alliances favour building and maintaining trust and commitment and successfully channelling conflict in a progressive and positive way to avoid negative sentiments and behaviours. Constructive conflicting views appear to have been allowed and encouraged as something to be explored as a means to collaboratively discover solutions to problems. We do not suggest or argue that this is an easy path for resolving differences in opinion, as several of the selected quotes demonstrate. We end this discussion by illustrating the lived 282

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experience of dealing with an alliance multi-disciplinary united team, the AMT, and as P-20 in the Walker and Lloyd-Walker study reflects: it’s been hard at times and I don’t want to overplay this because I think for the most part the group has worked really well as a team, but there have been times where there’s been an us/them mentality and just getting that real sort of sense of team work among everybody at times has been challenging. Not on a day-to-day, but particularly when people get very stressed out then you revert back to the sort of more traditional construction type behaviours. Not across the board and I would say, you know if I look at the amount of collaboration, the fact that we’re on time, on budget and achieving what we’re achieving says a lot about the level of collaboration we’ve been able to get going in the office, but I guess from my perspective I can see a lot of it across the landscape of the project office and I think there are areas where we could have probably done better, and some of that is because at times some of the personalities that we’ve had in the office probably didn’t suit an alliance, there have been times where individual organisations have brought people in that probably just not compatible with alliancing. Not many, and for the most part when that’s happened, the person tends to alienate themselves more than actually doing any damage. If you look at the culture of the organisation that we’ve created, it’s stronger than individuals and that’s been really clear when we have had situations where people have come in who don’t exhibit the sort of behaviours we want to see.

Comparing dispute resolution between partnering and alliancing Before concluding this section, it is worth comparing the alliancing form of dispute resolution to partnering, a relational approach that is often adopted in BAU forms of project delivery and explained by many academic experts in this field over several decades (CII, 1996; Bresnen and Marshall, 2000; Gottlieb and Jensen, 2012). Bresnen (2007) provides us with a cogent account of partnering principles and practices through his critique of a seminal work on partnering by Bennett and Jayes (1995). In his paper, Bresnen identifies paradoxes and what he terms deadly sins. The paper is useful as it helps to illustrate how alliancing and IPD have addressed some, if not many, of the paradoxes identified by Bresnen. One of the paradoxes identified by Bresnen (2007) is that partnering entities sign up to a partnering agreement that has no teeth because it does not change any legal commitments made under the project delivery contract form. A partnering charter is signed by all parties and maps out sensible and reasonable processes and procedures to try to work collaboratively (Ellison and Miller, 1995, p50). Essentially, while participants to the partnering agreement may agree to strive to achieve a shared strategic direction, collaboration, trust, respect and other relational attitudes may superficially direct behaviours towards no-blame, joint problem-solving and a best-for-project mentality but, without contractual governance arrangements, these remain aspirational and non-enforceable. This may be contrasted to the IFOA in the USA and the PAA in Australia, New Zealand and Finland, for example. These IPD agreements lock parties contractually into a collaborative arrangement, because the ‘we’ instead of ‘you’ contract language, combined with pain- and gain-sharing based on the project, (rather than participant) performance, institutionalises the best-for-project mindset. Bresnen also takes issue with the tone of partnering agreements that may also apply to IPD. Bresnen argues that the partnering agreement may lead to a dominant party served by compliant and unchallenging parties due to 283

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asymmetries of power, knowledge and market influence. These may be avoided by including clear language around behavioural expectations that encourage assumptions to be challenged, as indeed occurs in the alliancing context. Both IPD alliancing and partnering forms of agreement have an agreed documented disputeresolution process, such as defined problem-escalation protocols. An example would be an operational issue where there is a dispute about which party is responsible and/or accountable: if that issue is not resolved by the immediate supervisor in time ‘x’, then the issue will be presented to the next layer in the hierarchy, and so on. Both partnering and IPD-alliancing approaches have forums to resolve issues where wider than a two-party resolution is required. For BAU approaches, the forum for issue resolution may be a project control group with representatives from various project participants; for alliancing, there is usually a two-tiered governance and coordination group structure. The Alliance Management Team (AMT) that deals with issues raised that require operational attention, members in the AMT are often allocated a key performance indicator (KPI) that they take responsibility and accountability for to coordinate all issues related to that KPI. KPIs are measureable and link to a key result area (KRA). For example, environmental sustainability may be a KRA with specific measures that form KPIs such as the discharge of waste water from processes, concreting, etc. amounting to not more that x parts per million. In alliancing, as distinct from partnering, a further governance team composed of senior executives from participating organisations forms the Alliance Leadership Team (ALT). The alliance manager, the person responsible for the whole alliance project’s operations, reports to the ALT on KPIs and other alliance issues. The ALT can either directly resolve disputes or other issues that require high-level authorisation, or refer these back to participant home organisations. The ALT performs executive board-level governance. Thus, alliancing and similar IPD forms have greater structural power through the form of agreement being joint holistic accountability and responsibility, the pain- share and gain-share agreement conditions and ALT oversight. This power enables a unified team approach to be more effective than a partnering arrangement would be. The nature of dispute issues may also be different between an IPD alliance and BAU-partnering project delivery form. This is because the no-blame, consensus features mean that most frontline issues are swiftly resolved through collaboration at the coal-face; the AMT can resolve issues that are not resolved quickly by frontline workers and the ALT can help resolve particularly difficult issues requiring senior executive authority and power. In this way, IPD alliancing has the capacity to engender organisational ability trust and integrity trust, and if the AMT and ALT work together in good faith, consistent with the PAA, then benevolence trust is likely to be perceived as high. Additionally, this structure helps to engender affective commitment. Finally, this chapter also serves to prepare readers for Chapter 14, on stakeholder engagement. Trust development, maintenance and active listening, and being able to contribute to a dialogue have been shown to be crucial. More importantly we have explored and explained the mechanism underpinning the trust and commitment aspects of stakeholder engagement.

Conclusions This chapter has focussed on trust and how that affects commitment, and we see how this may lead us to an institutional-theory perspective. There are rules, regulations and protocols that may shape and govern the way that trust, in and between teams, is realised and can lead to a unified, consistent and agreed vision of how to deliver the project. 284

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Conflict and differences of opinion about the validity of ‘facts’ are inevitable. What really counts as a new way of perceiving trust and IPD is the clash of ideas, values and planned action about how these may be normalised. The chapter explored the mechanism used to explain how IPD projects facilitate projectparticipant engagement in answer to research question 1. The model presented in Figure 13.1 illustrates and helps explain, in response to research question 2, the necessary behavioural antecedents to gain and maintain trust between the project team stakeholders and project-external stakeholders. The chapter also explains how these behaviours are engendered to answer research question 3. Finally, the latter section of this chapter discussed and explained how conflict and dispute management, from an IPD approach, is achieved.

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14 IPD FROM A STAKEHOLDER PERSPECTIVE Kirsi Aaltonen, Martina Huemann, Christof Kier, Pernille Eskerod and Derek H. T. Walker

Introduction We have seen in earlier chapters that integrated project delivery (IPD) provides an environment that systematically facilitates collaboration between the triad of project owner, designer and contractor. This environment helps them find innovative value-adding solutions to problems and challenges facing them in delivering complex projects. Several chapters in this book support this chapter. Chapter 10, for example, examines the culture of collaborative behaviours that shape a stakeholder-engagement mindset. Chapter 11 outlines and deliberates on the knowledge, skills, attributes and experience needed of team members engaged in IPD to be able to collaborate with stakeholders. And Chapter 13 discusses trust and commitment and how disputes and differences in perceiving situations may be resolved collaboratively. Chapter 23 explores ethics and social responsibility and examines ethical dilemmas that may occur when dealing with stakeholders. The term ‘stakeholder’ has generally been accepted as any person or entity that considers that they have a legitimate stake in an enterprise because they either affect or are affected by that enterprise, or they directly or indirectly interact with or have interdependencies with the enterprise (Carroll, 2012). We argue this may equally apply to a project as an initiative or form of enterprise. This chapter introduces a number of specific concepts that help us better understand stakeholder engagement from an IPD perspective and so it extends a growing interest in stakeholder influence and impact beyond the general management field to its application to project work. Interest in stakeholder influence on project delivery as opposed to general management business has been recent and emergent. Demonstration of this interest area as a significant and new aspect of project organising can be seen from several doctoral theses being produced. Doctoral research is lengthy and intense and is intended to make a new contribution, so thesis completion provides a good indicator of topics and areas being seriously researched. However, it is evident that it is only since the early part of this century that we have seen publication of any research theses on project-stakeholder management. One thesis (Bourne, 2005) was on the development of a stakeholder-management tool, ‘the stakeholder circle’, in the projectorganising domain. Another study, undertaken in New South Wales, on the social processes

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associated with a protest group of aggrieved stakeholders stopping a housing development project for many years, revealed the power and tenacity of some stakeholder groups and their ability to halt a project and delay it, potentially indefinitely (Teo, 2009). We have also seen a PhD thesis on stakeholder management in international projects by Aaltonen (2010) and, more recently, taking a value-generation perspective of stakeholder contributions (Aapaoja, 2014), and multi-stakeholder perspectives of value in project portfolios (Ang, 2018) as well as results of research work on stakeholder engagement for co-creating value with the purpose of contributing to sustainable development (Keeys and Huemann, 2017a; 2017b). The Project Management Institute (PMI) acknowledged stakeholder importance by including it in its project management knowledge areas in its fifth edition (PMI, 2013). Several books have also been published more recently that are dedicated to stakeholders from a project perspective (Bourne, 2009; Eskerod and Jepsen, 2013). Issues about how to engage with stakeholders in project work have been discussed in PM publications ranging from Winch (2004) to, more recently, (Walker et al., 2008a), Eskerod and Huemann (2014) and Eskerod (2017). This section of the book is about behavioural aspects of IPD and this chapter takes a projectstakeholder engagement perspective with a particular focus on how project participants develop coherent and positive stakeholder engagement on IPD projects. In this way it moves away from managing stakeholders in the sense that they are either manipulated or that their expectations are managed towards a direction, to where stakeholders are seen as active collaborators with legitimate perspectives that may help achieve project outcomes that meet both theirs and the project initiator’s value proposition. Naturally, there may also be hostile or ambivalent stakeholders. Hostile stakeholders’ input may be best ‘managed’ in terms of minimising negative attitudes and action. Ambivalent stakeholders may be best engaged with to either maintain neutrality or to be encouraged to positively contribute to the project. In each case the term ‘engagement’ is perhaps more accurate than ‘management’. The text above illustrates how this chapter will provide insights into stakeholder engagement targeted at projects and more specifically how it may be applied in IPD contexts. In this chapter we answer two questions: 1

What processes best facilitate stakeholders’ engagement and action with both external and internal stakeholders to successfully realise a project? 2 How are these stakeholder-engagement processes enacted in practice within an IPDalliancing context? This chapter is framed as follows. First, we open the discussion of stakeholder engagement in general terms. We define what we mean by stakeholders and who may be considered a legitimate stakeholder and how they may influence and impact project delivery, citing several case studies from Australia. Then we discuss how digitisation has revolutionised how stakeholders can enhance collaboration between stakeholders to visualise a project output, and through that visualisation to be able to frame constraints and opportunities more effectively and to re-frame project objectives and requirements accordingly. We then follow that discussion by explaining and illustrating how stakeholder engagement was undertaken on several Finnish projects with critical evaluation of how that process was carried out and how it may have been improved when using a more integrated project delivery approach. We then conclude with a summary that focusses upon stakeholder engagement primarily from a value-capture perspective but also acknowledging its role as a risk and uncertainty management tool.

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What do we mean by stakeholder engagement? Who are legitimate stakeholders? We begin this discussion by stating our conception of stakeholder engagement as being a process of dialogue and conversation about values and what is valued by various stakeholders. Senge (1990) refers to dialogue between people not in terms of one person persuading or advocating a position to another to convince them to accept their point of view; rather, it is a mutually exploratory process where perspectives are discussed to probe possibilities of mutual gain and benefit. This is how we perceive an effective collaboration process taking place between stakeholders and team members delivering a project. Legitimisation is also about the way that an interest is portrayed as a valid position to be taken on that interest. Kaplan (2004;2008) studied the way that managers frame and re-frame their perception of a situation through dialogue to resolve ambiguity and uncertainty through a process she refers to as framing contests. She argues that the concept of framing contests moves beyond just being about arguing a point to try to gain acceptance of a particular position as a political act or even one of impression management. Rather, the process is an exploratory one of gathering data and information through dialogue and cognitively working through ramifications and implications to resolve ambiguity as well as expose hidden meanings, for example in reducing uncertainty about an issue. When stakeholders are engaged in this kind of process they are involved in a co-creation of knowledge, because as each party strives to benefit from alternative perspective-taking they enlarge their repertoire of potential frames in which to cast or re-cast a perceived problem. Often, novel and unanticipated results can emerge by changing the nature of the question. This process is similar to how some people may use software that has been developed for one specific purpose. Users often adapt it in an entirely new and productively authentic way for a purpose never envisaged by the software developer: the process is referred to as co-invention (Bresnahan and Yin, 2017). The popularity of the stakeholder concept may be traced back to Freeman (1984; 2010). Donaldson and Preston (1995) offered a view of stakeholders from an investor-owned corporation perspective and so much of the discussion was highly transactional and about the management of stakeholders that they acknowledged that non-investor-owned entities, such as government and not-for-profit agencies, held a different view of the role of stakeholders in business transactions. They saw stakeholder theory evolving as being descriptive, helping us to understand how a business operates in response to its stakeholders: instrumental, as a force or influence that impact upon corporate performance; and normative, relating to how business should react to and manage stakeholders to be successful. They also raised the question of legitimacy: Should stakeholder concerns be considered? Who are legitimate stakeholders? How should stakeholders be managed? However, as Freeman later explains (Freeman et al., 2010) stakeholder theory, developed over three decades ago, attempted to deal with issues relating to value creation and trade through expanding the economic and highly transactional view of the role of business and capitalism. It has more recently evolved to encompass consideration of value creation (co-creation) rather than just profit seeking. More recent literature on stakeholders moves away from concerns about managing or coping with stakeholders to place emphasis on engagement inclusiveness (Eskerod et al., 2015) and working with stakeholders to co-create value through their ability to influence others outside the project delivery team to help them shape agendas that result in positive project outcomes (Walker et al., 2008a; 2008b). This chapter focusses on IPD, therefore we discuss stakeholders in terms of: 290

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1

Being potential co-creators of value through improved understanding of what may constitute value emanating from a project (value exploration and definition); 2 Understanding and articulating value-delivery processes (administrative, regulative, etc.) to overcome impediments to effective project delivery or facilitate procedural enablers in delivering project outcomes; 3 Their capacity and extent of influence on project delivery outputs and outcomes.

Defining stakeholder characteristics Given the generally accepted understanding of the term of stakeholder provided earlier, we can now begin to categorise stakeholders and explore their characteristics. Key elements of any stakeholder categorisation are the nature of the interaction or interdependency, the impact that they have on a project or the project’s output, and the impact the outcome has on them. Figure 14.1 illustrates in broad terms the types of stakeholders that projects typically involve. As illustrated, this is a balancing act between stakeholders who have direct interaction and impact and those who have indirect interaction and impact. Some have close impact proximity to the project, while others are marginal influencers. Some have strong ability and capacity to exert influence, while others hold weak power. This latter group often presents a greater challenge and is the most difficult to identify, making addressing any real or imagined concerns they may have challenging. The direct stakeholders are usually close to the project management team (including, of course, the team themselves as stakeholders) and so they may be mapped, their concerns identified, and strategies to deal with their concerns developed and implemented. The indirect stakeholders are by definition distal and so their concerns may be very difficult to identify or address. For example, the nature and demographic of facility users may change radically over time. We see this occur in the university education sector, for example, and in libraries where modes of learning and use of library resources have changed markedly over the past decade. We have seen in recent years more open meeting and discussion spaces in universities with higher levels of power access for computer devices along with supporting Wi-Fi bandwidth. Unknown influencers may include, for example, influential relatives or friends of whomever may have been

Facility users Unknown/unidentified influencers

Project sponsor

Society at large

Supply chain: design team, delivery team, materials, equipment, consultants etc.

Supply chain family members

Facility operators

Complimentary projects

Regulatory authorities

Alternative – competing projects

Immediate environment

Extended environment

Direct interaction, impact

Indirect interaction, impact

Figure 14.1  Stakeholder spectrum

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considered a passive neighbour to a road- or rail-network modification project who may feel that the change is detrimental to them in some way. The influential party may have considerable background power to influence the project. As Engwall (2003) argues, no project is an island and so projects that are competing for attention and resources as well as complementary projects may also have hidden impacts and could be considered as having a legitimate potential influence on how a project proceeds. We do not wish to labour the point but Figure 14.1 serves to illustrate that stakeholder influence is a real constraint as well as a potential opportunity that should not be ignored. The stakeholder ‘management’ focus that was resonant a decade or so ago used tools and techniques that offered to deal with stakeholder risk factors, for example the stakeholder interest-intensity index (Cleland, 1999) that helps measure and assess stakeholder impact. Another tool, the stakeholder circle tool (Bourne, 2005; Bourne and Walker, 2005) helps to visualise more clearly the proximity, urgency and degree of stakeholder influence. These tools have given way to a stakeholder-engagement focus that first views stakeholders as untapped sources of value co-generation. This form of stakeholder engagement is apparent in the transformation, for example, of VicRoads in Australia from a road-authority expert organisation that ‘called the shots’ to a community-engagement organisation that seeks ways in which human transport systems are designed to fit with the natural and urban environment to add value by making the experience of travelling by car, bike or on foot more pleasant and rewarding, as well as being more efficient and effective (VicRoads, 2017). In discussing stakeholder characteristics we suggest that, rather than only looking at them as a potential threat, we should primarily look at them as an opportunity and learning asset. We do not reject the idea that stakeholders can pose a threat to a project or even that tools, useful though they may be, that help identify and visualise stakeholder impact are of limited value. Rather, we focus on the new and emerging intent in stakeholders as positive potential project partners in value creation. We later provide a case study example of how a set of direct and indirect stakeholders stalled a large urban redevelopment project in Australia. We do, however, also provide case study examples of how stakeholder engagement has been used as a value-adding-opportunity search tool.

Stakeholder legitimacy The notion of stakeholder legitimacy is wrapped up in understanding the nature (actual or potential) of the interaction and impact as well as the nature of the project performance. Stakeholders are perceived to have a legitimate claim to be heard, consulted and engaged with when they are interdependent with the project delivery team and when they may make an impact, or are impacted by the project outcome (Carroll, 2012). Note that we use the term project outcome rather than output. A project may have an output that also results in an outcome with unintended positive or negative consequences. There are many examples of the delivery of government policy through projects that have resulted in unexpected negative outcomes in the way they were delivered. The Australian Building the Education Revolution mega-project/ program, for example, was aimed at stimulating the economy after the global financial crisis of 2007–2008 while delivering much-needed education facility improvements, extensions and repairs. However, the program was dogged by its agenda being hijacked by special-interest groups and what may be considered waste in the construction of many of the school facilities (Kolar, 2017). The delivery of government policy initiatives through projects has been seen

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as having conflicting results (Young et al., 2012; Young and Grant, 2015) with outcomes not matching the expected project output (i.e. policy realisation). The study of policy-realisation projects such as those cited raises the question of stakeholder legitimacy. Which stakeholders held a legitimate stake and were these realised? Was there a form of hijacking taking place by groups of stakeholders to gain benefit at the expense of those intended to benefit? Kolar (2017) for example, cites agenda-hijacking by Machiavellian stakeholders in his thesis on a major multi-billion dollar program of work undertaken as a series of projects where the original intent of the program was subverted and manipulated for political gain. Stakeholder legitimacy is bound up with the benefits-realisation plan; benefits are identified on the basis of the perceived legitimacy and authenticity of the stakeholder’s needs (Zwikael and Smyrk, 2011). Central to the issue is what is the actual benefit that needs to be realised? This is part of the requirements-definition process: deciding what the output, outcome and scope of the project should be. Engagement with stakeholders who have a legitimate need is central to framing the project to provide an output that delivers the desired outcome and minimises unintended negative consequences and maximises, if possible, unintended positive consequences through synergies (by considering complementary projects or alternative competing projects, as illustrated in Figure 14.1).

Legitimate project-stakeholder characteristics The following characteristics are focussed on legitimate project stakeholders. That is, those who can legitimately be seen to affect or are affected in some way by a project. Table 14.1 illustrates a narrative for stakeholder X, showing both positive and negative characteristics that may be addressed through stakeholder engagement. It suggests what actions may be appropriate as part of an engagement strategy by the project team and project manager. In this table we take an actornetwork theory perspective (Linde and Linderoth, 2006) in which an actor (stakeholder) may be a system, artefact or even a process, rather than a physical entity, such as an organisation or person. Table 14.1 provides only a sample of possibilities relating to stakeholder influence and its impact upon how a project may be delivered. Sometimes, projects have the opportunity to be expanded or extended into a program of projects where synergies may be possible; thus, both scope and value may be increased or scope may be decreased, yet the original value may be captured. On the negative impact side of the story, failing to recognise distal stakeholders and their potential influence to create barriers or blockages for a project poses a real threat. Sometimes, with additional insight and consideration, these may be minimised or obviated. Other times the impacts have to be coped with.

Stakeholder management and engagement strategies With regard to recent stakeholder theory, we can draw a distinction between different stakeholder-management strategies (Freeman et al., 2007). These are management of stakeholders and management for stakeholders. The underlying values, challenges and perceptions of those strategies vary and will be discussed in Table 14.2, as they depict opposite positions on a continuum (Huemann et al., 2016).

Strategy: managing of stakeholders A managing of stakeholders’ strategy sees stakeholders as providers of resources, with a free will, who need to be managed and who can decide whether to provide the project with that resource

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Aaltonen, Huemann, Kier, Eskerod and Walker Table 14.1  Stakeholder identification and risk-opportunity characteristics Stakeholder identification As a potential threat (negative)

Value-adding potential (positive)

Project team member

Misunderstands project goals, incompetent or acting counterproductively. Is disengaged, indifferent or lacking in consistency. Is unfocussed, opportunistic or disinterested in project performance beyond their part. Is disengaged or indifferent and likely to demand late design and delivery changes to accommodate operational needs. Is hostile or, at best, passive.

Is fully motivated and committed and able to mobilise energy for a best-forproject outcome. Is engaged, committed and supportive.

Has unmapped friends, relatives or others who may promote the interest of a low power to influence stakeholders and have an unforeseen level of influence. The project outcome may pose harm or other detrimental impacts upon complementary parallel projects (in a program, for example) or from competing projects: resourcing implications, for example. Projects exist within a general environment or ‘system’. There may be unexpected disruptions caused by the project’s delivery, with negative unintended consequences. Underestimating public opinion may cause significant negative fallout, as happened with the following case study example from the work of (Teo, 2009). The consequence may be creation of coalitions against a project.

Sometimes project team members do not appreciate how influential actors who have not been identified can be in exerting behind-the-scenes influence or having fresh and value-adding ideas. There may be synergies that have not been recognised or captured from complementary parallel projects or even competing projects. For example, where an outcome provides potential shared value.

Project sponsor/ owner or client Suppliers (material, equipment or specialist advice) Facility operator

Immediate environment – physical, political, social, etc. Unknown or unidentified influencers

Other projects

The general environment

The general public

Is open and committed to focus on project value-capture potential. Has a best-for-project mindset. Is engaged and active in not only providing advice on operational practicalities but suggesting improvements. Is open or active in suggesting how unconsidered options may provide value capture or value adding.

The project may have potential spin-off positive consequences that provide intangible or tangible benefits to the general system, with opportunities for value capture. Public opinion may also be used to form a supportive coalition of interest to apply pressure in unforeseen ways to support a project or to help release pressure points or barriers.

or not. The stakeholders are thus divided into separate groups, looking at their potential to either help or harm the project. The higher their assessed potential is, the more attention they will receive from the project team. This is called the resource-based view of stakeholder management and combined with the issue-based view shows the two characteristics of an instrumental approach. The issue-based view allows a more fine-grained distinction, as stakeholders 294

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are not classified permanently, but are instead rated in relation to an issue at hand, for example, environmental impact. This enables situational relevance, as for some issues some stakeholders will be more important than for others. In its extreme form, it can be seen as rather manipulative and purposefully ignoring stakeholder groups. Ethical consideration is not central; whatever is needed for the project should be done by the project manager, who solely represents the interests of the project owner.

Strategy: managing for stakeholders This approach emphasises the importance and equal right of treatment of every stakeholder, independent from the assessment of their potential to help or harm. This more ethical approach is framed by Freeman et al. (2007, p52) as: ‘The very idea of managing for stakeholders is predicated on the fact that the process of value creation is about finding the intersection of interests for primary stakeholders.’ If conflicts between the interests of stakeholders arise, the aim is to create win–win situations between the project and the stakeholders, so that both sides should benefit from the relationship, negative effects are minimised, and an advantage can be drawn for all parties. This approach builds on values such as transparency, especially in decision-making processes, fairness and participation. Freeman et al. (2017) introduce a four-dimensional framework for stakeholder engagement that

Table 14.2  Difference between stakeholder approaches (Adapted from: Huemann et al., 2016)

Perception of stakeholders Range of stakeholders considered

Understanding of conflict

Managing of project stakeholders

Managing for project stakeholders

Stakeholders are instruments for achieving project success, or stakeholders are ignored. The most important stakeholder is the project investor. Only the most important key project stakeholders are considered. Different project-stakeholder interests are considered as obstacles for achieving the project outcomes, not explicitly managed. Conflict is bad and needs to be prevented.

Stakeholders are a source of ideas.

Values

Manipulative orientation, often with a lack of ethical consideration. Solely economic perspective. Rather short-term oriented. Reducing complexity.

Challenge

Short-sighted project outcomes which are not acceptable or do not provide sustainable solutions.

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Many/all project stakeholders are considered, and all their different interests are collected. Different stakeholders are explicitly invited as co-creators to achieve the project outcomes that benefit a broad range of stakeholders.

Conflict is inherent. Different stakeholders have different interests. Conflict is not just considered bad, but the culture to positively deal with conflicts and contradictions needs to be established on a project. Ethical consideration, fairness, transparency, and participation. Values that support sustainable development, such as balancing economic, ecological, and social interests. Short-term and long-term oriented; consideration of impact beyond the project. Increasing complexity. Overburdening of the project, slow decisionmaking processes or even cancellation of the project, or under-ambitious project outcomes.

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consists of (1) Examining stakeholder relations, (2) Communicating with stakeholders, (3) Learning with and from stakeholders and (4) Integrative stakeholder engagement. Therefore, the fourth part aims to put all the other parts together, while it discusses how the study of stakeholder engagement can enrich our understanding of stakeholder alliances and stakeholder-value creation. Of course these stakeholder-management strategies are two extremes on a continuum and the table describes them in black and white terms, while there are many shades in-between. In the IPD context, however, we will find more of a managing-for-stakeholders approach, which also brings some prerequisites, such as that the project needs to be ready to deal with the complexity that is made visible by including different stakeholders and their interests.

Examples of stakeholder engagement We saw in earlier sections that a critical part of ‘stakeholder management’ is to first identify stakeholders who may affect or be affected by a project process or deliverable, then to assess the positive or negative impact that these stakeholders may have, and finally to plan and take prioritised action (Eskerod, 2017, p174). We also see that engaging and dealing with stakeholders has emerged as a significant and now highly valued part of a project delivery process. In Figure 14.2 we see stakeholder influence from two ends of a spectrum ranging from a totally negative experience to a highly positive one. This provides us with an opportunity to illustrate the impact of stakeholder engagement and management from both ends of the spectrum. An important part of the management of stakeholder expectations is the strength and impact of the stakeholder’s ‘voice’. The negative end of the spectrum shows stakeholders with little or no potential to influence what they may consider a vital impact – from a project outcome – on their interests. Their voice, their opinions and arguments, may be not sought, and may be ignored or repressed. The project owner or leadership team may not even have considered engagement with these stakeholders, and not perceive them and their actions to be a potential threat to the project. If the stakeholders can marshal power and influence to counter the

Highly negative impact

Highly positive impact

• Stakeholder ‘voice’ is ignored or repressed • Project owner and PM team fail to perceive threat, or take effective action • Project is stalled or stopped indefinitely • Future engagement is poisoned

• Stakeholder ‘voice’ is sought and valued • Project owner and PM team recognise and encourage engagement and dialogue • The impact of stakeholder engagement is effective action • Project outcome value may be enhanced • Future engagement is fostered

Figure 14.2  Stakeholder engagement action spectrum

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project’s aims and development then this may result in the project being stalled or stopped for an indefinite period. It is likely that outright confrontation and direct action by both sides might poison their relationship. This may be contrasted with the other end of the spectrum as illustrated in Figure 14.2 where we see stakeholder influence both sought and valued. In this situation the project owner and leadership team perceive stakeholder engagement as being a vital, positive part of the project design and delivery process and they encourage collaboration and engagement to define and refine plans for the project. They perceive the stakeholder-engagement processes as value-adding and they foster the collaborative nature of their relationship. We will now provide concrete examples of these two extremes to illustrate our point.

Stakeholder impact from a negative end of the engagement and impact spectrum Some level of stakeholder engagement is inevitable in project management sectors, such as construction and building development, because there are legal and governmental requirements in place that must be conformed to. For example, most, if not all, building and construction projects need an environmental-impact process to be put in place in order to present the case that a project will have negligible negative impact and a possible positive impact. The ‘environment’ and those stakeholders who may ‘have a voice’ relating to the environment would be considered as significantly influential stakeholders in such cases. These projects also require planning permission that involves considering another set of stakeholders: ‘neighbours’ and members of the public who may consider themselves to be impacted by the project’s outcome or building process. On many social infrastructure projects, such as transport, water supply, sewerage and other waste disposal projects, the general public may be seen as front-and-centre key stakeholders. The way that project definition, planning and delivery are undertaken can vary between being highly technocratic to being highly socially oriented. This may significantly affect the way that stakeholder management takes place. For example, a highly technocratic approach may result from the project owner believing that the project proposal is logical and ‘must be done’ and that the owner and delivery team are best qualified to exercise their managerial prerogative. This may trigger resentment and resistance by stakeholders. The root cause of this mindset of ‘prerogative’ is the project owner and/or delivery team’s understanding and perception of what constitutes value. The ‘owner’ of a road, rail or utility pipeline project, for example (that is the responsible government department), may see the value as efficiently delivering the infrastructure on a value-for-money basis. Value is discussed in more depth in Chapter 4. If the mindset is that the facility must be delivered to the public in the most efficient way then the owner and project delivery team may well be best qualified to technically deliver the project. However, there may be relevant aspects of the project, such as the exact route or whether the facility is built at ground level or below or above ground that could gain more value from stakeholder input and engagement. The issue of ethics is also relevant here. Chapter 23 discusses ethics in greater depth. For other areas, such as new product development, the stakeholders considered are restricted mainly to project-output users and supply chain providers (Pons, 2008). Projects may easily be delayed or stalled without careful preparation and stakeholder-engagement planning action. Evidence of this happening on an Australian study extends our understanding, from a project management perspective, of how protest movements mobilise and maintain political pressure when aggrieved by controversial projects (Teo and Loosemore, 2010). The study revealed the power of collective community action and, as the authors highlight, ‘The development was the subject of a long-standing, and sometimes bitter and violent protest that spanned over 20 years, 297

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that included the establishment in 2001 of Australia’s longest-standing 24-community picket that was controversially destroyed by arsonists in 2006’ (Teo and Loosemore, 2010, p220). Figure 14.3 illustrates the key events from 1998 to 2006. Teo’s study (2009) showed how intractable collective action can be when stakeholders believe that justice and ethics are being trampled upon and when they believe that ‘the system’ is so corrupt, or its integrity so compromised, that violent action is their only meaningful and valid response. In that case study the trigger was a developer’s actions concerning discovery of the 6,000-year-old old remains of an Aboriginal man. The site was also an environmentally sensitive one and the planning process was found to be compromised, with various officials being subsequently prosecuted for corruption. This triggered a perfect storm of stakeholder resistance to the development. Teo’s study (2009; Teo and Loosemore, 2010) shows a tragic but highly visible progression towards conflict and negative stakeholder action. The problem started with vague disquiet about the project development approval from various community groups because the site was considered a local beauty spot and a natural common asset that had considerable recreational and environmental value. The burial remains of an Aboriginal elder were found, which were subsequently assessed by experts as being 6,000 years old. The area was part of an Aboriginal settlement and had been occupied for many thousands of years. One highly visible and disruptive stakeholder action was the establishment of a ‘tent embassy’ by protesters who successfully picketed the project. This picket lasted for many years. Readers interested in this case study can access it and the time line account in particular. Appendix A and B of Teo’s (2009) PhD thesis provides interesting reading from both an ethics and stakeholder-engagement perspective. The interesting thesis content relevant to this chapter is the explanation of how stakeholder management was so completely mismanaged. As recently as February 2018, newspaper reports document

Formative

Peak Dec’02 Commissioner of inquiry (CoI) announced

Community interest Jan’01 Developer commences court cases against council and community

Mar’98 Discovery of Aboriginal burial remains

Winding down

Oct’03 Commissioner of inquiry results released Aug’05 Minister appointed planning consultant reviews CoI

Jun’00 Developer announces plans to develop site into 428-lot housing estate

Feb’06 Community picket was burnt down

Feb’02 Blockade by community Mar’01 Community picket set up

Dec’00 Aboriginal tent embassy set up

Before Year 2000

Year 2001 to 2003

After year 2004

Figure 14.3  Stakeholder engagement action event map from case study (Source: Teo, 2009, p126)

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the acrimonious atmosphere and the dispute about the development (see www.illawarramercury. com.au/story/5222876/sandon-point-aboriginal-tent-embassy-to-be-cleared-out-by-council). Clearly, this is a prime example of poor stakeholder engagement. One can only speculate about the impact of this misjudgement by the original project developers. The cost of legal fees and wasted management energy that could have been productively deployed on other projects, and the costs associated with wasted time, materials, and damaged equipment represents just the tip of the iceberg. Community anger, indeed communities’ anger was palpable. This dispute enraged not only the Aboriginal community but also local residents, environmentalists and other groups that believed that justice had been subverted and that this was a totally unethical project. Parties associated with the project bore the stigma of being considered at best complicit and at worst exhibiting corrupt ethical values and reprehensible behaviour. The thesis written by Teo and several subsequent academic papers (2009; Teo and Loosemore, 2010) take a measured view in writing this case study. However, it is clear from newspaper reports cited in the thesis and various other available internet sources (perhaps of questionable value due to possible bias) that this case study illustrated a lack of consideration of stakeholders, who were assumed to be powerless. Despite their lack of formal power, they managed to influence a broad coalition of interests that were similarly ignored but proved to be a powerful and effective restraining force to the project’s execution. This case provides a salutary lesson in how not to manage stakeholders.

Stakeholder impact from a positive end of the engagement and impact spectrum Chapter 23 in this book focuses on ethics. Of particular interest to Chapter 14 is the issue of ethical perspectives and how they may impact stakeholder management. In Chapter 23, several salient stakeholder issues are discussed. One issue is the perspective of ethics as ‘the greater good’ in which it is believed that the interests of those that benefit from a project’s outcome and the process of its output are of greater value than the interests of those who may be adversely affected but are in the minority. This classic ‘ends justify the means’ approach has some ethical foundation from a utilitarian perspective but is totally lacking in validity from the perspective of the ethics of justice. The justice-ethics perspective favours due process and respect for an individual’s rights despite their potentially being in conflict with the wishes of the majority. Taking a stakeholder perspective, this ethical argument can be framed as follows. Is it reasonable to trample on the rights of some stakeholder groups to facilitate a benefit or advantage to a majority stakeholder group? In the above case study this question may be re-phrased as: why should a housing development that provides shelter for a great number of people be held up or stalled by a vocal minority group of protesters who are concerned about some ‘old bones’ and infringement of local beach access, when Australia has thousands of kilometres of coastline and as an island-continent has abundant environmental habitat for wildlife? We do not attempt to answer this provocative question here but mention it as an issue often raised when taking a stakeholder perspective on the validity of concepts of value, and what type of value may be delivered to stakeholders of a project. Chapter 23 discusses a project undertaken in Australia – the Sugarloaf North-South water pipeline – in which a wide range of stakeholder issues were considered and addressed. An important point to be made here is that the case study discussed in Chapter 23 presented a totally different mindset to that of the case study reported upon by Teo (2009) in this chapter. The Sugarloaf NorthSouth water pipeline project explicitly sought out ways in which engagement with a wide range of stakeholders could not merely help risk-manage the project but also add value (Smith et al., 2010; Lloyd-Walker and Walker, 2017). We now discuss in more detail the mindset that supports a stakeholder as a valueadding, or value-creation activity. The collaboration of project designers and implementers 299

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with stakeholders in terms of better understanding true needs and details of how projects may be delivered has been well documented in the organisational learning literature, where learning from the users of a project’s output contributes greatly in refining details of how the project is managed (Leonard-Barton, 1992;1995; Leonard and Straus, 1997). Supply chain member stakeholders and operational users of a facility often best know the intricacies of how systems may interrelate and how to avoid unintended adverse consequences. This is what Leonard-Barton refers to as empathic learning (Leonard-Barton, 1992;1995). However, it is not only supply chain stakeholders who have knowledge of the context of a project that may be highly valuable in adding value to an infrastructure project outcome, as was revealed in the way that another Australian project delivery agency transformed itself. VicRoads is the government instrumentality that manages the public road system in Victoria, Australia. Its website home page states that, ‘VicRoads plans, develops and manages the arterial road network and delivers road safety initiatives and customer focussed registration and licensing services’ (www.vicroads.vic.gov.au/about-vicroads, accessed April 2nd 2018). In 2017 it published its five-year engagement strategy (VicRoads, 2017). An important new development in the way that VicRoads sees its mission can be observed from its comment: The road network is for everyone, and we need to make the smartest use of it. Whether you live in the growing outer suburbs, small rural towns or in the centre of Melbourne. We believe communities and stakeholders are best placed to identify and understand the challenges, and co-design and implement solutions. Engage VicRoads is the start of a continuing conversation with citizens and communities to drive a culture of high-quality engagement at VicRoads to get better outcomes for people. (p2) The comment best illustrates two points with this government agency’s attitude towards stakeholders. First, it places people at the centre of its focus. The engagement strategy also refers to the importance of commuters and freight sharing the use of roads. The tone of the document is inclusive and responsive. Second, it acknowledges that the agency has much to learn from others and cites several other jurisdictions that have developed engagement strategies and that VicRoads has learned from. It also makes clear that people, and the values of people, are a vital focus of the agency’s efforts. The engagement strategy explains its seven guiding strategy principles (VicRoads, 2017, pp6–7). The language used in this document is interesting in that it is set, in both power and information symmetrical terms, in a situation in which VicRoads and stakeholders are connected as collaborative participants contributing to the intended project design and delivery. This is consistent with IPD ideals. The engagement strategy is also presented with an interesting illustrated figure to explain its five-year journey, with milestones along the way. The starting point is marked with a quote-bubble containing the words ‘starting point’, ‘less engaged’, ‘lower performing’ and the implementation of ‘change’. This image clearly acknowledges past failures that are typically made by many bureaucratic organisations that appear to dehumanise service delivery. They illustrate a similar quote-bubble marker at the end of the five-year journey. This bubble contains words such as: ‘realised benefits of high performance’ and ‘high engagement’. Each bubble has a list of statements below it to illustrate the bubble content. Along the journey path there are milestone events: ‘develop an engagement plan’; ‘build

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IPD from a stakeholder perspective Table 14.3  Engagement-strategy principles Principle

Explanation of the principle

We know why we are engaging and we communicate clearly

VicRoads uses terms such as genuine, authentic and innovative, pointing out that it is clear about the extent to which customers and communities may influence the outcome with ideas and feedback on proposals. Their wording includes ‘Our aim is to hear the views and ideas of the quiet majority, not only the noisy minority’. They also talk about targeting their messages to fit their audience and they identify interested stakeholders as ‘non-government organisations, advocacy groups, universities and think tanks, whose insights can add to the first-hand experience of people directly affected’. They acknowledge the different approaches to the agency’s past actions and how they may have shaped opinions and perspectives. It also speaks about wanting to understand the values of stakeholders and communities. They stress that early involvement and engagement opens up options to better identify challenges rather that advocate pre-held solutions. This principle is about the art of listening and taking perspectives. They use the term ‘active listening’ and co-design solutions and mobilising ideas to be talked and thought through for ramifications and consequences. VicRoads dismisses a ‘tick-the-box’ approach to engagement. It also promises to openly acknowledge its mistakes when made, rather than hide them. They opened up an online hub forum for ideas and discussion-sharing in addition to a range of other forms of community and stakeholder engagement to avoid people’s voices being drowned out by noisy interest groups or others who have the resources to advocate with slick presentations.

We deliberately include as many people as we can

We are sensitive to the history and know the context We engage early on the challenges and not the solutions We listen at every stage and we keep coming back We are genuine

We are relevant and purposeful

our capability’; ‘develop our relationships’; ‘put community and stakeholder programs into place’; and ‘passionate and capable staff’ (VicRoads, 2017, p11). This plan demonstrates a willingness and a plan to radically address the ways in which stakeholders may be engaged with as collaborators. It acknowledges that in the past VicRoads staff tended to spend most of their time, energy and committed resources on infrastructure projects’ issue management, with considerably less effort made on project-stakeholder engagement and very little effort on strategic engagement and relationship management. This model was reflected upon as being ineffective, wasteful and representing poor value for money. The proposed new model for the five-year plan shows most of the effort, resources and energy being committed to relationship engagement and partnerships, with a significant focus on strategic engagement. This results in far smaller effort and resources being needed for issue management. The plan is ambitious. Less than 12 months after its publication there is considerable effort being applied, which we cite and discuss below.

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This model of engagement is instructive. It fits the high, positive end, of the spectrum illustrated in Figure 14.2. The VicRoads strategic engagement plan presents three case studies to illustrate how their principles were applied in practice. Case Study 1 recounts how, on a 55-kilometre highway duplication project to improve road safety and provide a more efficient route, the estimated removal of 221 mature large trees turned into the reality of removing 1,600 trees. This consequently triggered community outrage. The traditional approach would be to engage with stakeholders to manage the issue. The sequence would follow: stakeholder engagement, planning, seeking and approving the funding, then actually commencing the project sequence. However, this proved disjointed and consequently the reasons for making various decisions (and, no doubt, compromises) were lost in the mists of time. When the fact that 1,600 trees had been removed became known, nobody was able to explain why and how this could have happened. The lesson that VicRoads learned from that experience informed their conviction to change their stakeholder-engagement approach. The approach to planning for the next stretch of highway duplication is being handled radically differently with a more open, transparent and collaborative approach with stakeholders. This helps to present contextual knowledge about how decisions were previously made and how the process was changed to inhibit repeating errors. Case Study 2 is a project underway at the time of writing this chapter (April 2018). The Hoddle Street and Punt Road stretch of continuous road each side of the Yarra River in Melbourne is a major arterial traffic road that has been neglected for decades in terms of how to increase its carrying capacity. Various schemes were proposed over the years, including demolition of hundreds of homes to make way for road widening, building a tunnel-road beneath the road, and a range of other contested and rejected proposals. In April 2016, the State Government committed AUS$60 million to fund the first stage of the Streamlining Hoddle Street project to upgrade four key intersections between the Eastern and Monash freeways. Explaining the traffic-flow complexities and various technical engineering and safety issues proved a challenge because gaining stakeholder input into addressing conflicting interests, seeking an ethical and just solution, and rectifying the increasingly escalating traffic-flow problems required some breakthrough thinking. The problem faced was essentially a ‘wicked problem’. A wicked problem is one in which there is no ‘right answer’ and all solutions are in some way unsatisfactory (Rittel and Webber, 1973; Finegan, 2010; Hancock, 2010). Addressing a wicked problem requires sophistication, goodwill, trust between all parties to the decision and their having highly advanced negotiation skills. One major challenge is to create a meaningful dialogue in which bias is minimised, relevant information is made freely available and a just and authentic conversation is had about options – including the impact of procrastination on the wicked-problem situation. Case Study 2 followed an approach to make the debate and discussion as open and inclusive as possible. VicRoads held numerous ‘town hall’ meetings, face-toface sessions, expert panels with participants from various communities (academic. local and others), as well as creating an online forum for posting and following discussion points. Every effort was made to communicate in simple terms because the technical issues were complex and not easy to explain without expert background knowledge. There was a high need for credible and honest communication styles, and forms, and delivery platforms. The VicRoads document indicates that: A live, online community event on the design of the Swan Street intersection was held on 6 September 2016. More than 400 people visited the broadcast page, and 173 people tuned into the live stream – listening, watching, providing feedback and asking questions for 45 minutes. 302

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The session received extremely positive feedback from members of the community and key stakeholders, with colloquial descriptions of the ‘glorified u-turns’ and pen markings on maps giving people a much better sense of what is being proposed. (VicRoads, 2017, p18) This project is still not without its critics and there remains the inevitable political point-scoring in the Victorian Parliament but the process they followed, as illustrated above, highlights how engagement can at least lead to a sensible understanding of a project’s aims, design, expected delivery complications and likely potential consequences. Case Study 3 discusses the stakeholder-engagement process for another overdue project: a bridge crossing. This process is important, according to the VicRoads Chief Executive, because VicRoads wanted to find out ‘what was really going on at the family level, and what matters to most people’. The engagement plan included hiring an independent research company to conduct a door-to-door community survey that reached 87% of households in the area with a 59% response rate. The existing bridge was notoriously difficult and dangerous for cyclists. This degraded an amenity for bike riders, as the area is set among beautiful riverside parklands and a large nature reserve. The engagement plan’s focus is now on ‘supporting the best local design solutions to on-road cycling lanes on both sides of the highway, separating the shared user paths and celebrating local heritage and the environment through the public open space designs’ (2017, p21). This illustrates how additional (communal and recreational amenity) value from a project may be achieved through taking an integrated collaborative approach. Feedback was gained directly from a cycling group. The report states: Tessa Salmon from Metro Projects joined in a morning ride to understand the group’s views and concerns. They wrote, ‘The old VicRoads were about roads: the new VicRoads seems to be much more about people . . . Your willingness to see things from other perspectives to a variety of views makes you a great ambassador for the organisation.’ (p21). Each of these three case studies illustrates a mindset that has shifted from the left side of Figure 14.2 to the right-hand side. Different techniques were deployed to engage with identified stakeholders and the VicRoads five-year priorities, 2016–2020 of: 1 Developing an engagement framework with the Engage VicRoads specialist team and interactive website at URL https://engage.vicroads.vic.gov.au; 2 Building capability with regional plans, capability audits, funding models for early engagement and processes; 3 Broadening the VicRoads stakeholder audience through applying a range of processes, tools, training, career development and performance accountability of staff; 4 Listening and learning through reflection, auditing improvement initiatives, and learning through coaching and mentoring; 5 Developing passionate and capable staff through engagement, by embedding the stakeholder-engagement culture and community-development programs in the strategic planning process. While the five-year plan may appear at one level to be highly effective ‘spin doctoring’ to some observers, it nevertheless documents evidence to demonstrate that VicRoads is 303

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progressing along the journey implied by their list of priorities. Further evidence of this being an institutionalised, organisational change is apparent with another major infrastructure program of works being undertaken in Melbourne in which VicRoads is a participant.

Digitisation as a game changer for project stakeholder engagement In several chapters in this book we discuss the Victorian Level Crossing Removal Program (LXRP). We discuss its various innovations; supply chain management (SCM) and lean-construction aspects; and other illustrations of how the program is engaging more fully with not only the direct alliance internal-stakeholder team (the alliance-owner participant (OP) but also the alliance non-owner participants (NOPs) such as the facility operators, design and delivery team) but also how it has affected residents adjacent to the project sites and the wider community. An important part of the engagement process increasingly involves digital sources. A relevant example that clearly illustrates the use of visualisation and virtual-immersion digital technologies, is the use of simulators to help stakeholders better understand what they may expect of the project and how it may affect their work for facility-operator stakeholders. The LXRP-1 interviewee explained how the design and development team were designing the details of the signalling systems by working with experienced train drivers who used the simulator to assess the practicalities of the proposed design: This is Sky Road. This is what it will look like just before we start our occupation. So, this is the point cloud survey . . . you set up all these things around the place, you don’t have to get into the rail corridor. . . . they set up little scanners all over the place and they just take images for two days. . . . The reason we’ve done this video, that’s a signal there, so we want to show the train drivers, ‘This is what it will look like just before this closure, can you still see the signal there? Are you happy with that?’ So, we’re building this all in 3D, fully offline, so you know how far your clearances are to all the powerlines here . . . We’re going to start planning our future occupations in here, so when we go and talk to a stakeholder we say, ‘Okay, let’s push the button and we’ll see what happens on day one and day two’. That’s already paying dividends, particularly with talking to stakeholders, so you can go and show stakeholders where this service is in the ground, ‘Here’s where the piles are going to be, here’s where we set up our piling rig, here’s where the concrete is going to arrive’, and it gives them a bit of comfort that their service is going to be protected. This clearly shows two important aspects of stakeholder engagement for value-added activities. First, the simulation helps the designers and delivery team to identify potential dangerous hot-spots to design-out such problems, as well as to visualise the work being undertaken. Second, by engaging with the train operators, drivers, managers or specialists of one kind or another, the practicalities of the proposed design can be explored so that fine-tuning radical change, even though new bright ideas can be made at the early design stage at far less cost and time interference than would be the case afterwards. Love et al. (2004; 2008), for example, has demonstrated the value of preventing rework and even how that may lead to a reduction in safety-breaching incidents (Love et al., 2018). Stakeholder participants engaged in a simulation dialogue, such as that described above gain value through better understanding what the new facilities will look and ‘feel’ like but, more importantly, they can flag concerns and trigger improvements before the design has been finalised. Another example of early stakeholder involvement can be seen in projects that use gamification for stakeholder engagement. Digitalisation has enabled construction projects to use digital 304

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infrastructure for games, which can directly relate to the concept of managing for stakeholders presented earlier in this chapter. Game thinking can be used to engage people, motivate action, promote learning and solve problems while integrating stakeholder groups to participate in early planning phases (Kier and Huemann, 2018). The Werken aan de Ring, i.e. the work on the Brussels Ring Road, provides a European example of gamification in stakeholder communication. The project involves about 20 kilometre of renovated road, 20 kilometre of new cycle lanes and 60 kilometres of new tramlines around Brussels in Belgium. The Brussels Ring Road has a long history, with parts being 65 years old, and is not, in general, able to cope with today’s volume of traffic. The renovation wants to inject new life into the Ring Road, making it ready for today’s traffic while making the surroundings more liveable for communities, but it changes the concept of how to utilise the Ring Road. To get the municipalities or communities involved in the project, the project not only set up several information sessions to give stakeholders the opportunity to share and engage, but the project also opened their digital models for a broad audience. The digital models were used to program a driving simulator, to give all stakeholders the look and feel of the project and introduce them to the new traffic situation after the reconstruction of the Brussels Ring Road, while playing a game. The user can see the dashboard of a virtual car on the Simulator Website, while choosing a departure point (Dilbeek, E40 Gent, A12 Antwerp, E19 Antwerp, E40 Brussels or WezembeekOppem). The online driving simulator is based on a preliminary design and therefore does not correspond 100% to the future Ring, but it is used to get a first acquaintance with the structure of the Ring. With the online driving simulator, the Flemish government wants to introduce drivers to the parallel structure of the future Ring, where lanes are separated from each other via a main and parallel runway. The road will consist of main and parallel lanes and several nodes or junctions: a completely new concept and structure for the road network in Flanders, which therefore needs new ways of stakeholder communication.

Figure 14.4  D  riving Simulator at the interchange of Groot-Bijgaarden, an interchange of two junctions (picture taken from the simulator) (Kier and Huemann, 2018)

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This form of stakeholder communication enables stakeholder engagement in a more informal way and allows them to make contributions by, for instance, providing feedback to the plans. It allows integrating stakeholder groups that are not so easy to reach with roadshows and other information events. Gamification can be considered a medium through which to reach out to stakeholder groups to become members of the project coalition and to allow for value cocreation based on their voluntary involvement.

Stakeholder engagement from an IPD-alliancing Perspective We have now explored and explained stakeholder management and engagement in general terms and provided examples of both good and bad practices. In this section we will provide insights purely from an IPD, and more specifically an alliancing perspective, based on experiences of alliancing in Australia and Finland.

Stakeholder-engagement experiences from an Australian alliancing perspective The Level Crossing Removal Program (LXRP) (see URL https://levelcrossings.vic.gov.au/ projects) is an initiative to remove 50 of the most dangerous road-rail crossings for an estimated cost (at July 2017) of AUS$8.3 billion (Victorian Auditor-General’s Office, 2017, p9). The program commenced in 2015 and is scheduled to remove the 50 crossings plus associated works that include new or refurbished railway stations and urban parkland works, by 2022. This program is discussed in more detail in Chapter 17 from the supply chain management and lean-construction perspectives of IPD in which links to a number of YouTube videos are provided to illustrate how the project was delivered. Those videos are part of an open and transparent communications strategy to allow stakeholders to better understand the purpose and progress of the program of work. The following discussion aims to provide further evidence of the shift in mindset towards stakeholder engagement as a seriously undertaken project management process that is clearly present in Victoria. It provides a concrete example of measures and initiatives that are explored, experimented with and enacted. This shifts the stakeholder practices to the right-hand side of the continuum illustrated in Figure 14.2. The LXRP has a substantial staff of dedicated stakeholder-engagement professionals and each alliance participant is keenly aware of their need to effectively engage with stakeholders as part of the alliancing approach adopted to deliver these projects. According to a recent study of the program, key alliance team members who were interviewed observed that each alliance member is made aware of the importance of the way that project participants interact with its stakeholders (Walker et al., 2018). The program is managed through a series of 11 project-alliance work packages. All but two packages involve work on a multi-site basis with four to nine sites being worked on (Victorian Auditor-General’s Office, 2017, p48). The following high-level benefits were identified, which indicate the range of stakeholders to be engaged (p61): •• •• ••

Improved productivity from more reliable and efficient transport networks – addressing the congestion and delays caused by level crossings will improve the efficiency of Melbourne’s transport networks; Better connected, liveable and thriving communities – removal of level crossings will reduce delays and increase the attractiveness of living and investing in areas surrounding the crossings; Safer communities – removing rail and road intersections will eliminate the conflict points between trains and road users, and trains and pedestrians, reducing the number of crashes. 306

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The stakeholder-engagement process has been extensive and intensive. The Level Crossing Removal Authority (LXRA) website (URL https://levelcrossings.vic.gov.au/media/publications#) page for Media > Publications provides readers with some idea of the range, the website further will find a series of videos (URL https://levelcrossings.vic.gov.au/media/videos) as well as updates on disruptions, news and general information and communication about the various projects. The website also has a platform to provide feedback and commentary. One initiative that is illustrative of the way that this program of works presents itself to the public was the ‘Super-sized Machines on Show at Scienceworks’. Scienceworks is a science and technology museum in Melbourne. The show held between 31st March and 15th April 2018 showcased the big blue ‘monster machines’ that were used to remove level crossings on a narrow part of the Cranbourne/Pakenham rail line in Melbourne’s south east. A replica of specialist equipment comprising two gantry cranes, a straddle carrier and 90-metre support beams made up of 5,000 Lego bricks showed how they combine to lift, shift and install the ‘building blocks’ for the new 2.4-kilometre section of elevated rail. Also, engineers who had worked on the project gave short talks for children on the 10th, 11th and 12th April, 2018 (10:30am and 11:30am each day). Regular updates on progress on the LXRP were provided by subscriber emails so that interested stakeholders could be kept informed automatically. The engagement strategy was also highly collaborative in nature, in terms of shaping the design. Most of the stations’ design development, for example, comprised an iterative process of initial design ideas being presented in ‘town hall’ type meetings and other similar forums to gather feedback – for the design and delivery team to better understand the issues of local residents’ concerns so that as many concerns could be addressed as possible through dialogue. Community involvement is particularly focussed on by viewings of environmental impact statements for comment and being made available through online access. Projects have viewing platforms being constructed. Events are scheduled to showcase work being undertaken. In general there is a wealth of information and communication made highly accessible through a variety of media vehicles. Discussions through interviews with key senior alliance participants involved in the Program Alliance 1 work package, were considered particularly successful, and confirmed that stakeholder engagement was also vital for internal stakeholders. The rail operator, for example, was a central and highly engaged non-owner participant (NOP) of the alliance. The operator’s alliance management-team representative stated, in a recorded interview, that the rail operator’s role was critical in helping the design and delivery team understand critical issues affecting the operator. The highly intensive interaction with the rail operator being an active part of the alliance team meant that significant innovations were identified and experimented with and that processes and other innovations became possible through the integration of this participant in the alliance (Walker et al., forthcoming).

Stakeholder experiences from an IPD-alliance perspective in Finland The number of IPD and project alliances has increased significantly in the Finnish infrastructure and construction sector over recent years. The first project alliance was Liekki, a 100-million euro railway renovation project that started in 2011. According to the latest statistics, since 2011, 50 integrated project deliveries have been or are being executed, and the overall value of these is three billion euros (Petäjäniemi, 2018). The results and experiences of the use of integrated forms of project delivery have been highly encouraging, particularly in the context of complex and uncertain projects. For example, in the delivery of a highly complex 180-million euro tunnel-construction project, Rantatunneli, all the owners’ targets were met or outperformed, 307

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and the project alliance that consisted of five organisations was able to implement the project in a manner that made effective use of collaborative practices and platforms as well as leanconstruction methods (Finnish Transport Agency, 2018). The introduction of more integrative and collaborative methods for delivering projects has also brought about a significant philosophical change in how both internal and external stakeholders are engaged with the project planning and decision-making processes in the Finnish construction sector. Instead of the management of stakeholders’ perspectives prevalent in traditional project delivery models, stakeholders are now being considered more and more as knowledge co-creators, with and for whom the value is produced through multi-stakeholder collaborations in the project system. The paradigm change, from management of stakeholders to systemic stakeholder engagement and management for stakeholders, involves extensive integration of clients, designers, contractors, and other specialist suppliers relatively early on in the project life-cycle and also the use of novel and sophisticated methods of engaging with end users and external stakeholders. Over the course of these integrated project deliveries in Finland, various new methods and tools have been introduced and implemented in order to facilitate proper stakeholder-engagement processes and to optimise the value of the whole system, rather than creating a zero-sum game between actors (Hietajärvi et al., 2017). Selected methods for more in-depth internal and external stakeholder engagement include the following: •• •• •• •• •• •• •• ••

Novel visualisation and simulation techniques to improve stakeholder communication and to help with receiving stakeholder inputs; Early and constant integration of various stakeholders into the project planning processes and use of joint co-locational project working spaces to facilitate stakeholder collaboration and dialogue; Value planning and mapping processes to facilitate value co-creation processes and ensure value-for-money and value-for-stakeholders thinking; Implementation of incentive systems that incorporate a strong stakeholder-value perspective and KPIs related to stakeholder engagement; Extensive, inclusive, and transparent engagement of stakeholders through social media channels and special events and workshops organised for diverse stakeholders; Assigned resources and roles for external stakeholder engagement and communication in complex projects; Establishment of a collaborative project identity to facilitate stakeholder identification with, loyalty to, and commitment to the project; Formal demonstration and reporting of the benefits that can be achieved through stakeholder engagement.

For example, in a 500-million euro university-hospital construction and renewal program in Northern Finland1, ‘The Future Hospital OYS 2030,’ different kinds of visualisation processes and tools were utilised as a method for stakeholder engagement (www.oys2030.fi/english.php). Computer-Aided Virtual Environment (CAVE), a virtual environment, is one example of the use of visualisation for stakeholder engagement that has been employed extremely beneficially for interactive end-user engagement. With CAVE, designs can be explored at their real scale while the users of the space evaluate them under the guidance of an architect. Different user groups can explore the building at its real size and engage in planning the spaces intelligently, based on their future-use needs. The exploration of alternative futures through advanced visual means and technologies also supports stakeholders in the development of their own future operating processes. 308

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The early integration of designers, contractors, clients, and other relevant stakeholders through collaborative contractual, organisational, and technical arrangements has been one of the cornerstones of the Finnish integrated project deliveries (Hietajärvi et al., 2017; Hietajärvi and Aaltonen, 2018). For example, in the Rantatunneli project alliance, the elements that produce value for the owners and for different stakeholders were mapped, and a Target Value Design process was systematically implemented to support and ensure the guidance of the project towards its target value. This value-engineering process also supported the balancing process between different stakeholders’ claims. Furthermore, stakeholders were engaged with the value-creation processes through an idea-and-innovation-management program and system that aimed at crowdsourcing novel ideas and innovations from the stakeholder network and implementing them efficiently. According to the project’s value-for-money report, the generated innovations resulted in a total saving of approximately 20-million euros in connection with the setting of the target outturn cost during the development phase (Finnish Transport Agency, 2018). Overall, a well-planned incentive system that also encourages more peripheral stakeholders, such as suppliers at sites to generate and voice their innovations related to, for example, work processes or safety management, as well as replicating these innovations across sites, is considered important in the Finnish alliances. To ensure that long-term perspectives and the needs of the operational phase are also incorporated into the project development scheme, representatives from service providers, operators and the respective authorities are typically integrated into the project management team early on. Broader and inclusive stakeholder engagement also requires incentives and performance metrics that ensure that the voices of the stakeholders are truly heard and appreciated (Kivilä et al., 2017). Integrated project deliveries typically incorporate key result areas that have an effect on how the bonuses and sanctions are shared in the project. What has been highly positive from the perspective of external stakeholder engagement is that more and more stakeholder-related key result areas, such as the public image of the project or the level of stakeholder collaboration, have become areas that are measured and controlled. For example, the 280-million euros Tampere Tramway project, which is delivered through a project alliance, regularly measures the public image of the project (level of positive, neutral, and negative communication regarding the project in the media) and, for example, the effects of the construction work on the local community and citizens (URL https://raitiotieallianssi.fi/in-english). Engagement of diverse groups has also taken innovative forms; for example, children’s drawings on the tramway have been used for the project’s Christmas cards and blogs, with children’s experiences of and stories about the construction sites published on the project website. Collaboration and the embrace of diverse stakeholders are therefore truly part of the lived values of the project. The Rantatunneli project also used various novel channels for building a dialogue with stakeholders, such as the development of social media groups (Facebook, Twitter) for exchanging information and ideas about the project, organising special visiting events and collaborative workshops at the co-locational spaces of the project, and organising memorable visits of the actual tunnel-construction sites. Extra coordination resources were assigned to manage and take care of the external communications and stakeholder relations. The establishment of a strong, collaborative project identity is one means for overcoming silos and boundaries across stakeholders and ensuring identification with, and commitment to, the project. An ‘us versus them’ mentality should be transformed into the mentality that everyone is in the same boat. Visual signs, such as joint symbols, logos, and batches, in addition to a joint co-locational space ‘big room’ (for a detailed explanation of how a big room works, see Alhava et al., 2015; Dave et al., 2015) are visible means of building an understanding of who everyone is as unified by the project. In the first Finnish alliance, the Liekki project, the 309

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importance of establishing a strong collaborative identity was considered crucial, and various socialisation mechanisms were used to facilitate this. Informal gatherings and the joint development and explication of collaborative values, for example, supported the development of an alliance ambience and joint cooperation in the project (Aaltonen and Turkulainen, 2018). Engaging stakeholders in a value-adding manner is not only a question of introducing novel tools and processes for stakeholder management. More importantly, it is a question of a deep cultural change, demanding new kinds of attitudes, mentalities, mindsets, and values toward stakeholder engagement. The transformation process from more closed project setups to transparent, collaborative, and open processes may take time and may also, at first, pose socialisation tensions and struggles affecting daily project work that need to be resolved. The findings from the Finnish project alliances imply that proper collaborative facilitation for working in co-locational spaces and crossing disciplinary boundaries is needed to ensure that stakeholders and actors do not revert to old ways of working in establishing sub-groups across disciplines (Matinheikki et al., 2019). Particularly, the roles of the project manager and the client’s representatives are crucial in rooting the new, open ways of sharing information and building transparent dialogues with diverse stakeholders. However, when collaboration is persistently fostered within the project, stakeholders gradually learn to really value the new ways of integrating and collaborating and start valuing the learning benefits of, for example, designer–contractor collaboration. In addition, the formal demonstration (e.g. in value-for-money reports) of how the involvement of diverse stakeholders can actually produce valuable innovations and even improve well-being at work is important for the legitimacy of broad stakeholder engagement. As one interviewee from the Finnish alliance project researched by Hietajärvi and Aaltonen (2018) stated, ‘Now that I can see what can be achieved through stakeholder engagement, it will be highly challenging for me to return to working in more traditional projects with their negative atmosphere.’ The level and spirit of collaboration has clearly changed in the Finnish construction sector because of the introduction of projectalliancing principles and lean thinking, but more work is still needed in terms of integrating the wider supply chain more extensively into collaborative project processes.

Conclusion This chapter began by providing an explanation of what the literature has to say about stakeholder engagement and the entities that may be considered legitimate stakeholders. It went on to present a stakeholder spectrum in Figure 14.1, ranging from those with direct to those with indirect impact and interactions, and the discussion led towards stakeholder legitimacy, with Table 14.2 describing differences between stakeholder approaches and Figure 14.2 illustrating the stakeholder-engagement spectrum. The discussion then moved from a general to a specific IPD-stakeholder perspective. The chapter’s aim in shaping the discussion of current best practice in stakeholder engagement was focussed by posing two questions: 1

What processes best facilitate stakeholders engagement and action with both external and internal stakeholders to successfully realise a project? 2 How are these stakeholder-engagement processes enacted in practice within an IPDalliancing context? The first question was answered by analysis of the general stakeholder-engagement processes reported upon in several case study examples. The first case study illustrated an extremely negative stakeholder impact upon a project and the consequences of this level and type of 310

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engagement. The case study that followed discussed stakeholder impact from the positive end of the stakeholder-engagement spectrum, with Table 14.3 illustrating six engagement-strategy principles adopted by VicRoads in Australia, who are participants in a number of project and program alliances that were also highlighted in the chapter. The following section discussed digitisation as a game changer with examples of how augmented reality and visualisation may be used to help stakeholders better understand various elements of the project design by using digital visualisation technologies. This provided an answer to question 1 by detailing practices used for stakeholder engagement in a dialogue to try to co-develop greater value for a range of project stakeholders. We saw that this value was delivered through the following best practices: 1

True dialogue to share ideas and opinions on how stakeholders may perceive value. The process of dialogue helps uncover aspects of value to one party or another that may not have been understood or even considered without that process. Social value, environmental value as well as cost and time savings may be identified and achieved through dialogue. 2 Practices we saw implemented included intense stakeholder engagement through a variety of mechanisms, including ‘town hall’ discussions, panel presentations, and question and answer sessions, interview surveys through face-to-face and door-to-door means, extensive online website interaction, and making available YouTube videos, reports and discussion documents, and a range of other relevant publications and literature. 3 Ensuring that the organisation delivering the projects have a shared mindset that values stakeholder involvement and welcomes and fosters it. 4 We also saw that augmented reality tools such as simulators and virtual reality digital systems can help stakeholders better feel and experience the project output than is possible using many traditional modelling tools. 5 In terms of bad practice, our illustration of the Teo PhD study (2009), and particularly Figure 14.3, showed how far things can go wrong and get out of control when stakeholder engagement is ignored or poorly handled. 6 Figure 14.2 illustrates a continuum of negative to positive stakeholder-engagement processes. This last section of the chapter answered research question 2 by providing examples of how stakeholder practice takes place in alliancing with case study insights from both Australia and Finland. The chapter provided a valuable new contribution to stakeholder literature with its specific focus on stakeholder engagement from an IPD-alliancing perspective.

Note 1 For a summary of the project, see www.oys2030.fi/english.php.

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IPD from a stakeholder perspective Keeys, L. A. and Huemann, M. (2017b). “Project benefits co-creation: shaping sustainable development benefits.” International Journal of Project Management. 35 (6): 1196–1212. Kier, C. and Huemann, M. (2018). Digitalization as Game Changer in Project Stakeholder Management. 2018 IRNOP – A skilled hand and a cultivated mind. Walker D. Melbourne, RMIT: 18pp. Kivilä, J., Martinsuo, M. and Vuorinen, L. (2017). “Sustainable project management through project control in infrastructure projects.” International Journal of Project Management. 35 (6): 1167–1183. Kolar, D. (2017). Improving the link between project management and strategy to optimise project success. PhD, School of Property, Construction and Project Management. Melbourne, RMIT University. Leonard-Barton, D. (1992). “The factory as a learning laboratory.” Sloan Management Review. 34 (1): 23–38. Leonard-Barton, D. (1995). Wellsprings of Knowledge – Building and Sustaining the Sources of Innovation, Boston, MA, Harvard Business School Press. Leonard, D. and Straus, S. (1997). “Putting your company’s whole brain to work.” Harvard Business Review. 75 (4): 110–121. Linde, A. and Linderoth, H. (2006). An Actor Network Theory Perspective on IT Projects. Making Projects Critical. Hodgson D. and S. Cicmil. Basingstoke, UK, Palgrave MacMillan: 155–170. Lloyd-Walker, B. M. and Walker, D. H. T. (2017). The Sugar Loaf Water Alliance – An Ethical Governance Perspective. Governance & governmentality for projects – Enablers, Practices and Consequences. Muller R. Abingdon, Oxon, Routledge: 197–220. Love, P. E. D., Edwards, D. J. and Irani, Z. (2008). “Forensic project management: an exploratory examination of the causal behaviour of design induced rework.” Engineering Management, IEEE Transactions on. 55 (2): 234–247. Love, P. E. D., Irani, Z. and Edwards, D. J. (2004). “A rework reduction model for construction projects.” IEEE Transactions on Engineering Management. 51 (4): 426–440. Love, P. E. D., Teo, P., Ackermann, F., Smith, J., Alexander, J., Palaneeswaran, E. and Morrison, J. (2018). “Reduce rework, improve safety: an empirical inquiry into the precursors to error in construction.” Production Planning & Control. 29 (5): 1–14. Matinheikki, J., Aaltonen, K. and Walker, D. H. T. (2019). “Politics, public servants, and profits: institutional complexity and temporary hybridization in a public infrastructure alliance project.” International Journal of Project Management.37 (2): 298–317. Petäjäniemi, P. (2018). Alliancing in Finnish Transport Agency, Finland. Baarn, Netherlands, NETLIPSE, Network for the dissemination of knowledge on the management and organisation of large infrastructure projects in Europe: 25pp. PMI (2013). A Guide to the Project Management Body of Knowledge, 5th Edition, Sylva, NC, Project Management Institute. Pons, D. (2008). “Project management for new product development.” Project Management Journal. 39 (2): 82–97. Rittel, H. W. J. and Webber, M. M. (1973). “Dilemmas in a general theory of planning.” Policy Sciences. 4 (2): 155–169. Senge, P. M. (1990). The Fifth Discipline – The Art & Practice of the Learning Organization, Sydney, Australia, Random House. Smith, S., Anglin, T. and Harrisson, K. (2010). Sugarloaf Pipeline: A Pipe in Time, Melbourne, Sugarloaf Pipeline Alliance, Melbourne Water. Teo, M. M. M. (2009). An investigation of community-based protest movement continuity against construction projects. PhD, Built Environment Faculty of Built Environment. Sydney, University of New South Wales. Teo, M. M. M. and Loosemore, M. (2010). “Community-based protest against construction projects: the social determinants of protest movement continuity.” International Journal of Managing Projects in Business. 3 (2): 216–235. VicRoads (2017). Engage VicRoads, Strategy. Melbourne, Victoria State Government: 18pp. Victorian Auditor-General’s Office (2017). Managing the Level Crossing Removal Program, Melbourne, ISBN 978 1 925226 58 4 101. Walker, D. H. T., Bourne, L. and Rowlinson, S. (2008a). Stakeholders and the Supply Chain. Procurement Systems – A Cross Industry Project Management Perspective. Walker D. H. T. and S. Rowlinson. Abingdon, Oxon, Taylor & Francis: 70–100. Walker, D. H. T., Bourne, L. and Shelley, A. (2008b). “Influence, stakeholder mapping and visualisation.” Construction Management & Economics. 26 (6): 645–658.

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Aaltonen, Huemann, Kier, Eskerod and Walker Walker, D. H. T., Matinheikki , J. and Maqsood, T. (2018). Level Crossing Removal Authority Package 1 Case Study, Melbourne, Australia, BIM+ Research Group, School of Property, Construction and Project Management, RMIT University: 38pp. Winch, G. M. (2004). Managing Project Stakeholders. The Wiley Guide to Managing Projects. Morris P. W. G. and J. K. Pinto. New York, John Wiley & Sons: 321–339. Young, R. and Grant, J. (2015). “Is strategy implemented by projects? Disturbing evidence in the State of NSW.” International Journal of Project Management. 33 (1): 15–28. Young, R., Young, M., Jordan, E. and O’Connor, P. (2012). “Is strategy being implemented through projects? Contrary evidence from a leader in New Public Management.” International Journal of Project Management. 30 (8): 887–900. Zwikael, O. and Smyrk, J. (2011). Project Management for the Creation of Organisational Value, London, Springer.

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15 BEHAVIOURAL ELEMENTS OF THE IPD COLLABORATION FRAMEWORK Derek H. T. Walker and Beverley Lloyd-Walker

Introduction Chapter 2 presented an overview of the Collaboration Framework in broad terms. Three components of the Collaboration Framework were illustrated in Figure 2.2, comprising platform facilities, behaviours and processes, routines and means, together with the 16 elements of the framework (Walker and Lloyd-Walker, 2015). This chapter is focussed on the second component of the framework and is composed of five elements, each with several sub-elements. The first component group of elements and sub-elements of the Collaboration Framework are discussed in detail in Chapter 9. In essence we argued from our analysis of the study’s data that effective collaboration in IPD projects is dependent on the complementary interaction of three components. Figure 15.1 illustrates this concept together with the focus for this chapter. Chapter 2 and Chapter 9 discuss the institutional-theory perspective (Scott, 2014) applied to alliancing. Figure 15.1 may be viewed from this perspective, where the platform foundational facilities contain elements that require a common regulative platform to shape what may be possible in terms of decisions and actions. The normative pillar could be seen as the cultural mindset that shapes behaviours and this shaping is in turn influenced and directed through the processes, routines and means that comprise this third component. The purpose of this chapter is to provide more detailed discussion and explanation of the five elements comprising the second component, the behavioural component, together with subelements that were identified from research work. Chapter 9 provides details of component one elements and sub-elements and Chapter 21 does so for component three. We now explain each of the elements and sub-elements and how they fit with theory and we also provide empirical evidence to illuminate our argument from quotes by those we have interviewed. The elements and sub-elements are illustrated in Figure 15.2. At the end of each section we provide a rating for each element based on results from a research project undertaken on the Level Crossing Removal Program (LXRP) alliance, based on recorded and transcribed interviews with five senior alliance team managers who were members of the Alliance Management Team (AMT) or Alliance Leadership Team (ALT). These alliance subject matter experts were interviewed for the study by Walker et al. (2018) undertaken in 2017–2018 about the LXRP Alliance Package 1 (outlined in Chapter 9). This data is used to rate each Collaboration Framework element for the behavioural factors component of the framework. 315

The focus of this chapter

The project outcome achieving KRAs through IPD collaboration

Processes, routines and means – drivers as PM enacted practice

Behavioural factors – drivers as normative practices

Platform foundational facilities Centre for Integrated Project Solutions

[email protected]

Figure 15.1  The Collaboration Framework concept

Reflectiveness Pragmatism Appreciativeness Resilience Wisdom Spirit Authenticity

6 – Degree of authentic leadership

Behavioural factors driving normative practices

Autonomy Forms of trust Safe working environment Trust relationship building

7 – Trust-control balance

Innovation types Commitment to continuous improvement Testing, prototyping and experimenting

8 – Commitment to be innovative

Alignment of common goals Outcomes and performance levels Challenging for excellence Value for money reporting Recruiting support

9 – Common best-for-project mindset and culture

10 – No-blame culture

Rationale for a no-blame culture Facilitating mechanisms for no-blame

Figure 15.2  Behavioural factors driving normative practices

Behavioural elements of the IPD Framework

Element 7 – Authentic leadership Toor and Ofori (2008) undertook a research study into the concept of authentic leadership within a project management (PM) context and contrasted the traditional PM-leadership style of command and control to that of a relational and collaborative leadership style. They draw upon and critically review the relevant general management-leadership theory and PM-leadership theory and practice, from a construction-industry perspective, citing practice in the United Kingdom, Hong Kong, and Thailand. Their paper provides a literature review of the period up to its publication from a traditional general and engineering-construction industry PM perspective. Lloyd-Walker and Walker (2011) investigated authentic leadership styles specifically from an alliancing perspective based on a study of leadership in an Australian and New Zealand alliance context, based on interviews with 22 engineering-infrastructure-alliancing experts (Walker and Lloyd-Walker, 2011). Their analysis of data from that study reveals authentic leadership as being vital for creating an environment that encourages and supports collaborative behaviour. This informed development of the Collaborative Framework (Walker and Lloyd-Walker, 2015). Subsequently and more recently, the concept of balanced leadership (Müller et al., 2017) was offered as an explanation of the way that team members balance vertical leadership styles of hierarchical responsibility and accountability with horizontal leadership styles of collaboration and initiative-driven shared operational leadership, based on expertise and resources. This leadership style was seen as effective for complex situations where the expertise of team members, and their capacity to be flexible and resilient to cope with turbulence and uncertainty, suited that specific context (Snowden and Boone, 2007). These conditions have been identified as relevant to IPD alliancing and other highly collaborative forms of project delivery. Authenticity in leadership is also important in collaborative situations, especially when team members are willing to take greater responsibility and accountability for planning and action. Authentic leaders are easier to trust because they act in accordance with their espoused values. Toor and Ofori (2008, p620) describe authentic leadership from a PM perspective as follows: Authentic project leaders possess positive values, lead from the heart, set highest levels of ethics and morality, and go beyond their personal interests for well-being of their followers. They capitalize on the environment of trust and are able to motivate people and accomplish challenging tasks. This description fits the situation found on many successful IPD and alliancing projects. The criterion for rating the level of authentic leadership on IPD-alliancing projects, according to Walker and Lloyd-Walker (2015, p160) is that: Low levels are revealed when espoused principled values are not demonstrated in action, manifested through a gap between the rhetoric and reality of leading teams. High levels demonstrate consistency in espoused and enacted values that are genuinely principled.

Much of the impact of authentic leadership on IPD-alliancing performance is based on mutual trust and commitment within and between team members and the team’s leaders. This aspect of trust is discussed in detail in Chapter 13.

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Reflectiveness Walker and Lloyd-Walker (2015, p178) identify project participants demonstrating reflective thinking by: understanding a situation through critical analysis and questioning assumptions and pattern-matching what is known, felt and observed as compared to how the situation should systemically behave; actively seeking a range of perceptions about a situation to question how relevant these may be in confirming, rejecting or modifying a working hypothesis or theory; and being confident to cease action and let reflection guide further decision-making and action-taking when necessary. In Chapter 9 we discussed the Cynefin Framework (Kurtz and Snowden, 2003; Snowden and Boone, 2007) where situations, such as the context and situation facing people engaged in project design and delivery are perceived as ordered, unordered or disordered systems. According to the Cynefin Framework, we suggest, IPD-alliancing projects are particularly prone to high levels of complexity, significant chaos and are highly complicated. Rarely are easy and stable ‘tick-the-box’ solutions to problems applicable. Even when a process, i.e. excavating and carting away excavated material, may be simple, the context surrounding this ‘simple’ task may be complicated, complex or even chaotic. Project participants are systems thinkers and often follow a strategic-thinking approach about the situational context and know that this context is crucial to effective decision-making. Reflection is the act of temporarily detaching oneself from a situation to think about and make sense of it in terms of one’s role and that of others, as well as reflecting upon systemic aspects of the phenomenon (Raelin, 2001). This is what Kaneman (2011) refers to as ‘thinking slow’ as opposed to ‘thinking fast’, which is automatically following intuition in perceiving problems and their solutions. The key to being reflective is the ability to engage in thought that is beyond single-loop learning where the a simple cause-and-effect investigation leads to a category-based analysis, such as the solution to a perceived problem did or did not work the last time it was encountered. Double-loop learning reflection and thought seeks to probe deeper to think of the context in which the situation is set and events that led to the condition under study, and to further examine inconsistencies between planned ideal and actual actions (Argyris, 1977; Schön, 1983). Triple-loop learning moves beyond double-loop learning to question and consider systemic environmental conditions that led to the context considered, and often leads to radically reframing the question asked and any underlying assumptions. Raelin (2007, p501) expresses this in terms of types of learning: In first-order learning, we move from using pre-existing habitual responses (zero-order learning) to learning about them. In second-order learning, we learn about contexts sufficiently to challenge the standard meanings underlying our habitual responses. Using second-order learning, we find ourselves capable of transferring our learning from one context to the other. By third-order learning, we become aware that our whole way of perceiving the world has been based on questionable premises. It is learning about the ‘context of contexts’ such that our entire assumptive frame of reference can be challenged. The reflectiveness sub-element in the Collaboration Framework, therefore, relates to the extent to which individuals and teams reflect and think about the context of challenges they address along with the systemic assumptions, as well as any gaps between rhetoric and reality. In doing so, teams reflect at both the individual level as well as at the group level through challenging assumptions and eliciting explanations and rationalisations of proposed plans or actions. 318

Behavioural elements of the IPD Framework

Authentic leadership requires reflection at the three levels or orders of learning about the relationship between people and themselves in order to resolve conflicts of interest in terms of any rhetoric–reality and espoused–actual values gaps, and in terms of systemic considerations relating to the way the system being operated within helps or hinders authenticity.

Pragmatism Walker and Lloyd-Walker (2015, p181) identify examples of pragmatic thinking: having a technically practical approach to understanding and making sense of all forms of power and influence used to steer decision-making and action; and having a greater focus on effectiveness over efficiency to win wars rather than win battles. Being pragmatic refers to getting on with the job in a way that is practical (capable of being done), reasonable (ethical and consistent with the group norms), defensible (the rationale can be explained and understood) and sustainable (meets both short- and longer-term needs). Volbers (2012), for example, draws upon the philosophical arguments about pragmatism offered by seminal writers Dewey and Wittgenstein. He suggests that pragmatism does not dismiss theory in favour of doing what has traditionally been done, or conform to what may be considered ‘best practice’. However, he recognises multiple truths or ways of seeing things, thereby recognising that ‘best practice’ may refer to a different context and that tacit knowledge is of great value when embedded in reflection on the appropriate action to be taken within a particular context. Cavaleri offers a 10-element pragmatism framework for preparing to collaborate. His framework is grounded in people learning to collaborate and learn together (2008, p478) through:   1   2   3   4   5   6   7   8   9 10

Thoughtful interpretation and enactment of one’s environment; Learning from the feedback of experiences; Reflecting on past experiences; Imagining how discovered patterns of cause-effect will potentially impacts future states; Engaging in inquiry to assuage the irritation of doubt; Taking targeted action to achieve a desired result or state of affairs; Carefully reasoning to apply rules for action or create new rules; Building knowledge through experimenting with one’s actions; Improving the quality of one’s knowledge by incorporating discoveries from action; Clarifying beliefs by paying heed to doubt, and using inquiry to improve performance.

This is clearly an intellectual, collaborative process of sharing information and knowledge through interacting with an assumed or accredited concept of knowledge as some form of truth. We can see from this framework that pragmatism is complemented by reflection-in-action as a dynamic process of evaluation of what should be done and how it was done, as well as a more detached process of enquiry. It is also undertaken with a sense of humility and not automatically doing what is convenient to get a desired result but, rather, it is about seeking a best outcome through fully engaging with one’s formal and experiential self-knowledge and with others, to share knowledge to apply to a particular situation. Pragmatism also fits with authenticity because it is governed by ‘truth’ and consistency of espoused and enacted values.

Appreciativeness Walker and Lloyd-Walker (2015, p181) identify examples of appreciative thinking: making sense other people’s perspective through active listening and also being pragmatic about sources 319

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of ideas; focusing on effectiveness through appreciating that innovation often begins with novel, unusual or even crazy ideas that are explored and developed through multiple perspectives; and having sufficient humility to recognise the value of practical knowledge. To be appreciative means to humbly respect the values, knowledge and expertise of others as well as understanding the context and perspective of others. Parker, Atkins and Axtell (2008) undertook a literature review on perspective-taking and found that a common understanding of being appreciative related to an ability to see a situation from the perspective of others and being able to ‘stand in their shoes’. They define this term as actively taking the perspective of others in a dialogue and state that ‘Active perspective taking occurs when an observer tries to understand, in a non-judgmental way, the thoughts, motives, and/or feelings of a target, as well as why they think and/or feel the way they do’ (2008, p151). We argue that appreciativeness is wrapped up with concepts of humility because there needs to be an ability to accept one’s limitations and therefore be prepared to learn from others. Given that state of readiness, an individual is ready to collaborate through dialogue. Senge (1990, p226) explains the process of dialogue as not being about advocating a particular position to win over another person to accept one’s own view but rather to exchange perspectives on an issue to steer a path towards greater joint understanding and commitment towards a particular course of action. Appreciativeness is clearly linked to collaboration and active perspective-taking. A significant contribution in understanding how pragmatism is linked to effective perspective-taking is made by Parker et al. (2008, p170). They present a model showing five influences on active perspective-taking: 1 2

3

4

5

Beliefs and role readiness – being convinced that sharing perspectives is worthwhile; Affect, mood emotions – being well disposed towards sharing knowledge and experiences to collaborate with others (note: this is bound up with trust as explained in more depth in Chapter 13 of this book); Social processes – being in a group that the person respects, likes and identifies with (note: this is bound up with other Collaboration Framework behavioural factors, being supported by the platform foundational facilities, such as joint communication and governance arrangements as well as several of the third component of processes, routines and means); Task and work design – the nature of how work is done being shaped by levels of task/job meaningfulness, responsibility and feedback quality, as discussed in Chapter 11 of this book and illustrated in Figure 11.1); Cooperative and relational, work context – the rewards for collaboration and the general supportive norms surrounding the group.

These influences are moderated by their: emotional intelligence leadership/followership style ability (Turner et al., 2009); strategies for communicating and developing their feelings and desires for perspective-taking; specific knowledge about the situational context and prior experience of collaborating with other participants; and the mood of those engaged in collaboration through active perspective-taking. The actuality of perspective-taking is also mediated by the demands placed upon a person by the task and situational context. This could include: the accessibility of appropriate communication media and facilities; complexity of the issue being discussed; level of conflicting value compatibility; and the demands of the tasks, such as urgency, distraction and workload stress. Appreciativeness, therefore, is about project participants understanding the motivations and value propositions of influential internal stakeholders involved in the project; for general workplace collaboration and external stakeholders when resolving dilemmas, seeking win–win solutions to conflicting interests; and resolving ethical issues. Appreciative people are consciously 320

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engaged with their team members and exhibit signs of having a high emotional intelligence. Appreciativeness links in particularly strongly with the discussion in Chapter 23 on ethics and creating shared value as well as with Chapter 14 on stakeholder engagement. In summary, appreciativeness is about being able to judge the most effective response to teams and individuals about their value as being the key in influencing others and being influenced by them.

Resilience Walker and Lloyd-Walker (2015, p182) identify examples of reliance-thinking through: understanding that projects seldom if ever run to plan where ‘unknown unknowns’ appear regularly to disrupt plans and actions and addressing issues may take unexpected turns; and understanding the need to be versatile and adaptive and understanding the importance of local culture and context. Authentic leadership requires project participants to exhibit adaptability, versatility, flexibility and to be persistent when faced with adversity. Participants are able to effectively learn from experience. The literal definition of the word resilience comes from the ability to recover and spring back into shape. The quality of being able to recover from difficult or challenging situations fits in well with our earlier discussion of the Cynefin Framework and the skills needed to cope with complexity and chaos by probing, sensing and responding to situations (Kurtz and Snowden, 2003; Snowden and Boone, 2007). It is also associated with ambidexterity. Turner undertook a study of ambidexterity in an information-technology PM context (Turner, 2011). He describes ambidexterity as being the ability of people and organisations to juggle their application of available human capital, social capital and organisational projectcapital resources. He explains human capital as the knowledge, skills, experience and leadership capability embedded within the individual; social capital as the network of formal and informal relationships to enable knowledge generation and transfer; and project capital as existing organisational knowledge, together with the formal and informal processes and routines that operate within the boundary of the project (Turner, 2011, p11). People juggle their applications in terms of switching between exploitation and exploration knowledge and learning strategies. Turner (2011) drew upon March’s (1991) concept of organisational learning governed by processes of exploitation (refining existing knowledge) and exploration (developing new solutions). He (2011, p13) developed a matrix and adapted the Kang and Snell (2009, p74) intellectual capital architectures and ambidextrous learning model that referred to organisational capital but taking his study from a PM perspective. Thus, his model refers to organisational (project) capital. We further adapt the Turner model to reflect resilience and ambidexterity, as illustrated in Figure 15.3. Figure 15.3 illustrates two important aspects of resilience that relate to authentic leadership of IPD-alliancing projects. First is that the IPD collaborative process is often one of creating new or refined knowledge to recover or take advantage of the uncertain and often turbulent disturbance of planned actions. Collaborating enhances and builds upon existing knowledge drawn from the human capital of those involved in the collaboration plus the social capital developed through team member interactions (such as developing trust and joint commitment, gaining mutual trust, becoming friends, perhaps) and the organisational project capital developed through project activities as well as the knowledge and experience that each IPD participant brings from their home-base organisation. This is represented in Figure 15.3 by the thick dashed lines that draw upon generalists and entrepreneurial capital bases for exploration while team members juggle their use of mechanistic knowledge from the project and the IPD participant home-based organisations. They also juggle their use of specialist human capital and cooperative capital for exploitation while accessing organic project and organisational capital resources for 321

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Resilience through collaborating in creating new/refined knowledge

EXPLOITATION

EXPLORATION

Generalist

Human Capital

Specialist

Entrepreneurial

Social Capital

Cooperative

Organic

Organisational Project Capital

Mechanistic

Resilience through collaborating in exploiting existing knowledge

Figure 15.3  Resilience, ambidexterity and ambidextrous learning (Adapted from: Turner, 2011, p13)

exploration, to marshal existing knowledge and learning to focus on resilient action when facing challenges represented by the dotted lines.

Wisdom Walker and Lloyd-Walker (2015, p183) identify examples of wise thinking: understanding the value of making sense of other people’s perspective through active listening and being pragmatic about sources of ideas; focusing on effectiveness through appreciating that innovation often begins with a variety of ideas from diverse perspectives; framing and justifying changes in direction in response to difficult, broadly accepted choices and challenges; and being able to move from divergent exploratory thinking to convergent thinking in response to varying situations, by knowing which questions to ask and which answers to accept as most relevant to the situational context. Rowley (2006) provides a useful discourse on the nature of wisdom and how it has been defined and explained in the literature from ancient philosophers to modern concepts of organisational learning and best-practice decision-making. She argues that wisdom is embedded in or exhibited by action; that it involves the sophisticated and sensitive use of knowledge; and that it involves judgement that accommodates multiple realities, and wider social and ethical considerations; and is exercised in decision-making and the implementation of decisions (2006, pp1249–1250). Her appraisal of wisdom in relation to leadership is relevant here. She maintains that ‘Wisdom (and leadership) can be seen to involve the formulation of a plan that works within the context of the organisation, and can be implemented within a social context’ (2006, p1251). This observation links a leadership style that implies high levels of stakeholder engagement and understanding the practical limitations of what is possible, what enables or inhibits shaping a particular path, and where the boundaries to problems and potential solutions lie. Taking an IPD-alliancing perspective of wisdom, we argue that wise project participants have opinions and advice that are valued, consistent and reliable, so that others will instinctively refer to them. Their judgement abilities make their brokering advice crucial. They are perceived as having high levels of integrity based on inner strength of character, knowledge and experience. This is consistent with being authentic and with authentic leadership characteristics. It infers not only understanding the what, how and why of a decision but also understanding the timing and framing processes to reach that point. Söderlund (2010) discusses the concept of 322

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entrainment with respect to knowledge and its use and application. He argues that knowledge is also about timing and that people often have knowledge about something but may not be able to recall or fully comprehend it until triggered by an event occurring when that knowledge is needed and is perceived as contextually relevant and fitting. This wisdom aspect of IPD collaboration – wisdom in authentic leadership – is also about the process and timing of drawing decisions to a conclusion.

Spirit Walker and Lloyd-Walker (2015, p184) identify examples of spirited thinking as: being unafraid to express opinions, feedback, views on plans and action when contributing ideas; having sufficient expertise to frame views constructively yet firmly, so that they are effectively considered and valued; and being committed to challenge BAU when actively seeking continuous improvement and best-for-project outcomes through persuasive argument. Spirit is the quality of having the courage to effectively challenge assumptions and act according to people’s ethical norms. Project participants demonstrate the courage, and have sufficient influence and respect, to effectively challenge assumptions and frequently offer radical alternative solutions to resolve complex and difficult situations. Courageously disagreeing with the majority view is an important quality in leaders and followers alike if a consensus appears flawed or contrived. The dangers of ‘groupthink’ have been well documented in terms of historical and political actions, such as the situation leading up to the fall of France to the Nazis in 1940 (Ahlstrom and Wang, 2009), the Cuban Missile Crisis (Whyte and Levi, 1994) and in the PM domain (Loosemore, 2000; Hällgren, 2010). One aspect of groupthink that may explain this behaviour relates to problems of bias when making decisions in conditions of uncertainty (Tversky and Kahneman, 1974) and this is closely linked to Prospect Theory, in which the fear or regret of loss is perceived by people more strongly than the desire for gains (Kahneman and Tversky, 1979; Kahneman, 2011). If people are placed in a position where their reference anchors are biased towards limiting loss rather than having a chance of gain they will value the loss more highly than the potential gain, mainly because it is easier to visualise what is potentially being lost as opposed to imagining the benefits of a gain. Being spirited in the authentic-leadership context relates to having the wisdom to remain as unbiased as possible while having the courage to question assumptions even if these are firmly held by others in an influential group. Being spirited may lead to out-of-the-box thinking where totally fresh perspectives may occur if people feel that they are supported to offer what may be seen as wild ideas. This kind of thinking is common in what may be institutionally established by encouraging unconventional thinking, for example as seen in an experimental-project ‘skunk works’ situation (Wolff, 1987; Gwynne, 1997; Tulley, 1998). Here iconoclastic thinking is encouraged to trigger radical innovation and transform risks into opportunities.

Authenticity Walker and Lloyd-Walker (2015, p184) identify examples of authentic thinking: demonstrating consideration of an actions’ impact on others; genuine enthusiasm about achieving best-forproject outcomes; and being trustworthy and effective in championing collaboration. Being authentic is about having consistency between espoused values and visible action. Authentic leadership not only needs this alignment between what is said and what is done, but also it needs to openly do so. This may often require communicating complex actions that 323

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are perceived to fail to live up to expectations. This is particularly relevant when dealing with dilemmas as discussed in Chapter 23, on the IPD-alliancing ethics perspective. It is highly relevant when having to deal with wicked problems in which there are no ‘right’ answers when action is forced, perhaps due to a dangerous, deteriorating situation and when choices have to be made and need to be based on inflicting minimum damage rather than optimising positive outcomes (Rittel and Webber, 1973; Hancock, 2010). Project participants demonstrate authentic qualities of being approachable and trustworthy and open to ideas when they encourage and advance collaboration, discussion and new ways of thinking.

Rating the authentic-leadership element The indicative rating for the LXRP Package 1 alliance for this element is based upon analysis of transcripts from interviewed participants LXRP-1 to LXRP-5 in the Level Crossing Removal Authority (LXRA) Package 1 case study research (Walker et al., 2018). Based on the criterion for the element presented at the beginning of this section, with 1 represented as very low and 5 for very high, we rate this as 4.5. Our rationale for this score is based on the following: 1

Senior managers who worked in Alliance Package 1 all cited examples of what we considered to be reflectiveness. There was a deep level of consideration of the context of the projects within the package program alliance; their response to its complex nature being a brownfield site with highly dynamic stakeholder issues to reconcile and thus the need to engage in triple-loop learning. The program nature of the package allowed reflection on projects within the program to guide the leadership style and collaborative followership engagement. One illustrative quote given to us by LXRP-2 was one of many similar quotes: ‘So one thing was whatever idea we came up with, whether it be the acceleration or just staying on program or finding a better way to do things, the key difference was the people that we engaged to do that were picked because of their approach that they would do that. Now, just lucky enough to work with a really good team of people that – we had these ridiculous ideas, we just had to make it happen’. This illustrates reflection by openly challenging ‘the plan’, finding innovative solutions and fully comprehending the systemic context of contexts, thus demonstrating triple-loop learning. 2 The impression gained from those interviewed was that the leadership style was highly pragmatic. There was clear evidence of them ‘getting on with the job’ through continually scanning the environment and seeking perspectives from their expert collaborative team so that problems and issues could be tackled innovatively and that reflection-in-action was continually adopted. They appear to be highly skilled at adapting past knowledge to achieve remarkable results within the urban congested-site context. LXRP-3 said, for example: ‘certainly the alliance put in a lot of effort to ensure that key suppliers were embedded in the process, and there was lots of work done in advance with them to make sure they could provide their peak level of resource, and they got certain advantages or benefits out of that. And so, like, if I reflect, like, the five week closure – the 35 days – the first two weeks was essentially bulk earthworks. So we moved 250,000 cubic metres of dirt in two weeks’. 3 Much appreciativeness was evident, as the alliance agreement structurally pushes people into being collaborative and engaging in an atmosphere of mutual trust and respect for each participant’s expertise and access to knowledge within their teams. Thus, the level of active perspective-taking was very high. LXRP-1 made a comment that supports the evidence of 324

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the team’s appreciative culture and the alliance manager’s leadership style: ‘if someone fails then we all fail . . . it’s kind of a weakest link sort of thing. So, there’s no point everyone else going well, and one element of the job not going well. They’re usually collaborative and people will help each other out. I think there’s a perspective that the teams do approach it as, ‘How can we all succeed and what do we have to do to do that?’ 4 The level of resilience demonstrated was also high. The alliance team demonstrated high levels of adaptability, versatility and flexibility and their actions followed Figure 15.3 closely. LXRP-1 provides a good illustrative quote of this: ‘constant planning right up until the start of it to a huge level of detail is very, very important, as the site changes and it’s so dynamic, how do you access it? How do you keep it safe for everyone? What’s your contingency plan if it rains? What happens if your plant breaks down? Where are your points of failure? Where are your single points of failure? And, having plans so that you’re not making it up in the middle of it all, having plans that everyone knows about, where you just (say), ‘Okay, this machine’s broken down. We know what we’ve got to do. Let’s go and get the next one’, whatever it is’’. 5 There were also high levels of wisdom demonstrated as the level of thinking went beyond rushed convenience, even though the time pressure was intense. The team seemed to understand the project context well because of the IPD approach and, in particular, the integration of the rail operator. One aspect of wisdom is the ability to understand the higher-level demands and objectives. RLXP-2 expresses this well: ‘So to be successful in these program alliances and in project alliances you’ve got to understand your alliance objectives in the first place. So to actually read the projects alliance agreements we’ve got a set of alliance objectives, which are cost performance/time performance (which are relatable to the key result areas (KRAs)) and we’ve got industry capability and training in there as well, but we’ve also got quality performance, so this is around the standard of the design solution that we come up with’. 6 We have discussed spirit as the quality of being brave enough to challenge assumptions and act ethically, even when others may be sceptical about what may be proposed. This was particularly relevant in this Alliance 1 Package because the contract was awarded late, had severe time constraints imposed upon it and the AMT proposed a radical re-think of the project that actually led it to be completed early. RXLP-2 states: ‘I’d go present to my CEO and I’d do the quarterly report and say ‘this is what we’re doing’ and he’d look at me and he’d say ‘really?’ He never said ‘you’re bonkers, you’re crazy, you can’t do it’ but it was always that ‘really?’ And it was just that confidence just to be able to sit there and say ‘Yeah, it’s no problem, we’ve done this, this and this, we’ve got all the planning in place, it’s sweet as, no problem’ . . . It was after the occupation where quite a number of very senior people in various organisations and on various committees said to me ‘yeah, we didn’t actually think you’d make it, we didn’t actually think you’d hand back on the right day, but we all agreed it was worth a try. Nobody believed you but we thought we’d give you a go’. I was shocked to find that out after the event’. 7 We saw high levels of authenticity in general. The alliance agreement gave a lot of support for this in terms of it being specifically focussed on collaboration, a no-blame workplace, and the high regard for unanimous decisions that are based on low power–information asymmetry. Two quotes illustrate this well the first from LXRP-3 providing the ownerparticipant (OP) view and the second from LXRP-1 illustrating a non-owner participant (NOP) view. LXRP-3 stated that: ‘the client is instrumental in how an alliance performs, because you’ve got to be open to challenge and testing, and you’ve got to help solve the problem. So, I mean, the client has so much ability to influence approvals and the ultimate 325

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plan that the alliance tries to put in place, because we’ve got the ability to brief government, we’ve got the ability to influence other parts of government, and we’ve got the ability to use legislative powers’. This illustrates how the OP can and did act authentically to support the alliance. LXRP-1 stated: ‘That cultural element is key. If you get that right you will have success, because the finger pointing and the blame goes away and you get into problem solving, and usually that yields good outcomes, whereas, if you don’t get the culture right, you’re stuffed, you won’t get there’.

Element 7 - The trust–control balance An alliance contract confers great trust in the alliance relationship to mediate any potential opportunistic behaviour of parties, while reducing direct client-control measures. The alliance paradigm is different because the OP is a participant of the alliance and the alliance requires open-book transparency and has clear KRAs to measure performance. This might be seen as controlling, however, much of that control is self-control. The governance arrangements (See Chapter 19 for greater depth of discussion) through the ALT and AMT, for example, increased control while increasing trust through collaboration across the project’s united one-team. The project owner in an alliance pays the direct project costs and therefore may appear to be highly trusting, perhaps naïvely so, but at the same time the selection process provides a rigorous filter for weeding out potential participants who are not entirely trustworthy or who are opportunistic. The KRA performance measures for the project, and the way that they are administered, should provide a compensating control mechanism. Chapter 13 discusses trust in depth and Chapter 26 discusses performance and the incentive arrangements. Trust balance is also about trust in others to suggest improvements and to discuss sensitive (possibly political) issues and to do so with a best-for-project objective, rather than for individual gain or convenience. The criterion for rating trust control on IPD-alliancing projects, according to Walker and Lloyd-Walker (2015, p161) is:

Low balance is demonstrated by the extreme naivety of participants about trusting others implicitly, or alternatively by exhibiting high levels of suspicion and/or unreasonable demands for formal and informal control and monitoring that imply a cynical attitude towards trusting others. High balance is demonstrated by an innate sensibility to juggle transparency and accountability demands with the need for trust and necessary due diligence. It also demonstrates a professional understanding of the nature of project-participant accountability constraints and opportunities for resolving and possibly helping to resolve institutional paradoxes, so that accountability is consistent with accepted responsibility

Autonomy Trust in project alliance participants is expressed by their autonomy in responding to the situational context. Their responsiveness is complicated by institutional and cultural norms that may either restrain their autonomy, and therefore their capacity to respond to new initiatives and changes to the ‘plan’, or enhance it through organisational culture and governance arrangements. This may leave them with enough autonomy to act independently. Walker and Lloyd-Walker (2015, p186) identify examples of autonomous thinking: considering constraints or opportunities when making commitments to deliver on promises; understanding 326

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the nature and limits of one’s power and influence; renegotiating one’s level of autonomy from a trust– and control–balance perspective; and initiating scope changes based on changes in information relating to the value achievable from any potential scope or scale changes. We discussed institutional theory (Scott, 2014) earlier. This element is explained in part by the norms and behaviours that the alliance form used for infrastructure projects in Australia. For example, it promotes norms that are consistent with integration, collaboration and ethical conduct towards a far wider set of stakeholders than do many other project delivery forms. The governance mechanisms provide the rules for the institutionalisation of the alliance and the way that the various teams become integrated in an alliance. This helps the cultural-cognitive aspects of rationalisation of an alliance-delivery cultural logic, as was demonstrated in a recent Finnish alliance case study (Matinheikki et al., 2017). Autonomy is aligned with the concept of an integrated, united team. Each alliance-participant team may lose its individual autonomy as ‘the design team from organisation X’ or ‘delivery team from organisation Y’ or ‘the project operator team participants from organisation Z’, but participants gains autonomy as an alliance united team. Their unified focus on a best-for-project outcome provides a source of trust between participants from being aligned to a common goal. KRAs, KPIs, performance-control measures and AMT and ALT governance roles provide balancing control trust mechanisms. As the above element criterion suggests, the question of the extent of autonomy may be framed in terms of the degree to which participants are as free as NOP teams, or individuals, to be able to question assumptions about their unanimous support for a position and not be subsumed: that is, being forced into acquiescence or conformity. Alliance participants may exercise ‘within-alliance’ autonomy to be free of hierarchical control and the contractual obligations of their ‘home-base’ organisation, to take initiative and assume autonomy. However, while they may still be within the alliance they may remain obliged to pursue the interests of their home NOP organisation, There is clearly a balance required of participants, as well as the project owner, to understand the pressure of obligation that alliance participants feel towards the alliance and their home base. Central to resolving this dilemma are the project (and not organisational home-base-focussed) KRAs that reward project performance and not individual, or participating-organisation level, performance. To take initiatives, be highly flexible and resilient, there needs to be high levels of trust by the ALT in the AMT to deliver the project KRAs. From a negative perspective this may be accomplished by individual NOPs taking advantage of their position by favouring their home NOP organisation, for example through obtaining specialised training paid for by the alliance or over-staffing the alliance to the commercial or other advantage of the NOP home organisation, rather than seeking a needs-based decision about training. Decisions of this kind should be evidence-based to avoid any NOP being perceived to be biased about decisions where their home-based organisation might appear to have benefited. The trust–control balance criterion above does not seek to measure where that balance lies: what may be reasonable training, or switching of resources, or the scope of work between NOPs. It is specifically focussed on the behaviours and rationale because the issue of the mechanism for ensuring trust and an appropriate level of control is left to element 15: transparency and open-book processes. It is also a concept that relates to the united alliance team’s understanding of their boundaries and what space they are free to navigate within. This includes the scope of the project as well as the design solution and project-delivery methods. While boundaries may constrain, they also provide a free space within which to work and address various stakeholder value propositions. An example of boundary autonomy can be understood from a comment 327

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cited by LXRP-3 from the LXRP research alliance Package 1 study, relating to what they interpreted as the meaning of community involvement and legacy value to the affected community and how this informed their understanding of that boundary. The alliance teams that were bidding for the project had autonomy to interpret the project needs in developing an appropriate design and delivery project solution: We develop urban design guidelines, which are extensively developed with key stakeholders that are very specific to each individual site. So when contracting teams bid for a job, they’ve got very clear information, not only from a technical requirements perspective for operating a rail network and delivering a level crossing removal, but they’ve got quite clear information on what stakeholders and the broader community are, sort of, looking for as part of the product as well. (LXRP-3) Autonomy also relates to the freedom of action that the alliance has in changing plans when opportunities are encountered, or to cope with emerging challenges. LXRP-2 provides an illustration of this when developing a radical plan to change the construction approach to save time and money: we said ‘okay, to keep three tracks open we’re going to be able to work four hours each night; we’ll get two hours predicted work and then we pack up, we’re going to be creating noise all night for the public, and nuisance and lights and everything’. So we went back to the rail operator and we said ‘let’s have another look at this: let’s close that third track and assess by working with the rail operator and the alliance now, if we cancel the express services, how much longer does it take somebody to get into the city on the train from [X]?’ Like way, way out of town. It’s five minutes. So we said ‘close the track, let’s just shut the express service down and we’ll just work on two tracks’. So that just gave us the ability to increase productivity on these two retaining walls and swap over, and then put the track back. LXRP-2 explained that he sought and gained approval to deliver the changed plan which achieved a significantly successful outcome with a radically shorter delivery time. He was able to do so because he had the trust and confidence of his project director and the stakeholders he reported to, including the program director. That trust was gained through competence and a well-reasoned and well-supported detailed technical argument. This demonstrated very high-level relaxation of strict to-the-plan monitoring and control, replaced by a more watchful oversight and monitoring.

Forms of trust Walker and Lloyd-Walker (2015, p187) identify examples of thinking about different forms of trust: understanding the contextual logic for project-procurement forms; assuming or specifying specific accountability and transparent ‘behavioural-trust’ requirements; appreciating underlying concepts of trust to facilitate project participants sharing a common understanding of the trust concept; accepting the validity of trust-with-caution as being a valid balance of unreservedly expecting other parties to deliver on commitments while respecting accountabilitymonitoring requirements. Chapter 13 provides a detailed discussion of trust and commitment. The focus in this chapter is on understanding that trust may be genuinely balanced. On the one hand, the person or group 328

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ultimately accountable and responsible takes a sentinel or macro-level oversight role in supervising those delivering a project, by having confidence in their trustworthiness to deliver the promise. On the other hand, this requires them to have scrutinised the viability and practicality of the planned actions to be taken at a micro-level. This is what Lewicki, through decades of research and review of trust (Lewicki et al., 1998; Lewicki et al., 2006), refers to as the trust–distrust balance. The confidence that the person/group that invests trust has in the promise being delivered by those being trusted is contingent upon understanding the rationale and basis of actions taken, as well as having confidence in their ability, benevolence and motivation within the given context. This balanced trust can be contrasted with naïve wishful thinking and sceptical disbelief. Trust is healthy but it requires high levels of wisdom and judgement from those doing the trusting. They need to have the qualities of understanding when to hold-back and let events take their course, while ensuring that the plan to be executed is workable. In the previously mentioned LXRP project example, LXRP-2 and his project director LXRP-4 said that not only should the proposed changed plan be robust, viable and convincing but that a ‘Plan B’ should be established. Plan B ensured that, should circumstances change radically – such as exceptionally adverse weather or other catastrophic conditions – then an alternative plan could be quickly implemented. Some forms of trust are fixed and statutory, for example legal requirements about safety. One of the LXRP project participants, the rail operator, had a statutory limitation placed upon it that all other alliance parties had to understand, respect and work with to ensure that the obligation was fully complied with. LXRP-4, the rail operator expert had several roles: ALT member and ‘policeman’ to ensure that the rail system was safe for passengers and the general public. He expressed the situation this way: The challenge that [the rail operator] has . . . is with the Rail Safety Act, caught up in a court of law when we’ve hurt someone or even killed someone; under the Rail Safety Act the powers are very strong. And whilst there’s a tier-one principle contracting model, the rail operator will always end up in front of the guy with the curly wig. Fact. This legal responsibility formed a distinct boundary. It did not proscribe actions of the operator but it was clear that any action taken by the alliance on rail-related work had to ensure public and rail operator personnel safety. Additionally, clear governance rules required the LXRA to have its project business plan (Victorian Auditor-General’s Office, 2017; Victorian State Government, 2017) approved through a stage gate process (see Chapter 19 on governance). This provides a form of trust that the project is viable. Project alliance participants know that they have to steer their way through accountability and responsibility trust boundaries which they must be fully aware of and understand.

Safe workplace cultures The above sub-section noted the statutory safety obligations that must be adhered to but there are other cognitive-related and workplace cultural aspects that impact the trust–control balance. Project participants’ trust in their leaders is mediated by their perceived treatment in terms of working in a safe psychological, physical and intellectual environment. All infrastructure engineering projects have a statutory obligation to provide a physically safe workplace but the workplace should also feel psychologically and intellectually safe to foster trust and innovation. 329

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Walker and Lloyd-Walker (2015, p188) identify examples of thinking about workplace safety culture as: understanding that physical safety emphasises an absence of exposing people to risk of physical injury; understanding that psychological safety emphasises avoiding the risk of people feeling inferior, inhibited and constrained, or being coerced to behave in a particular behavioural direction; and understanding that intellectual safety emphasises allowing people to challenge ideas and to even offer crazy suggestions that might be refined and developed through supporting experimentation, and acknowledging mistakes so that these experiences can be learned from. Psychological safety is bound up with autonomy. A workplace culture that is supportive enhances and allows people to be resilient, flexible and well-motivated – particularly within an IPD context (Pishdad-Bozorgi and Beliveau, 2016). This, as explained in more detail in Chapter 13, nurtures a productive atmosphere of mutual trust within and between teams, as shown from a meta-study of 43 research studies undertaken over a period of 40 years on this subject (Dirks and Ferrin, 2001). Psychological safety is also bound up with an ability to acknowledge mistakes and to learn from them. It allows people to feel free to question authority when clarification of confusing signals inhibit trusting a message and the messenger, or when people simply disagree with an argument or position and feel the need to debate the issues openly. Intellectual safety is vital for open discussion that challenges ideas and assumptions. It ensures that people who have the courage to question a proposal, decision, or the wisdom or practicality of an action are not subjected to ridicule, bullying or adverse retaliation. It is associated with respectfulness and acknowledgement of the validity of alternative perspectives. As mentioned earlier, dialogue requires this kind of respect to facilitate a meaningful debate where one party does not press a position but rather explores with others their perspectives, to enhance the opportunity of a better outcome that would not have been the case if relying on one perspective only (Senge, 1990). LXRP-3, the OP for the alliance, made a pertinent point in relation to trust and intellectual safety when the client is seeking to challenge assumptions even as a powerful participant in an alliance that could exert considerable force if it so desired. He said: the client is instrumental in how an alliance performs, because you’ve got to be open to challenge and testing, and you’ve got to help solve the problem. So, I mean, the client has so much ability to influence approvals and the ultimate plan that the alliance tries to put in place, because we’ve got the ability to brief government, we’ve got the ability to influence other parts of government, and we’ve got the ability to use legislative powers.

Trust-relationship building This sub-element relates to trust as a vehicle for building trusting and positive workplace decision-making, and accepting alliance relationships. Walker and Lloyd-Walker (2015, p189) identify examples of thinking about trust-relationship building through: establishing protocols and a behavioural charter so that people understand what the culturally acceptable norms of the alliance are; actively establishing processes and training that strengthens people skills to help understand each other’s perspective; rewarding effective development of relationship-building and maintenance mechanisms; and demonstrating integrity and ethical dealing to support confidence in building sound relationships between and within project teams. Trust is a fundamental enabler or product of many of the behaviour elements in this category. For example, trust is critical to the earlier discussion on authentic behaviour; it is necessary to 330

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allow innovative ideas to be discussed and debated and it helps build a safe workplace in which a common best-for-project mindset can develop. LXRP-3 made a relevant observation about building trusting external-stakeholder relationships in the early design development phase of a project. He draws our attention to a KRA for this aspect: there is a KRA measure around how well we’ve addressed those community and stakeholder requirements from an overall objective in the design process. So that’s definitely been a focus and a strength of the program so far. It’s coupled with – for us, we’ve developed an urban design framework. We develop urban design guidelines, which are extensively developed with key stakeholders that are very specific to each individual site.

Rating the trust–control element The indicative rating for the LXRP Package 1 alliance for this element is rated as 5. We suggest this score because: 1

Alliance participants had considerable autonomy given to them – the decision to significantly change the original alliance and its dramatic impact on program success, and the way the program director dealt with the conversations around that decision by probing for rationale and the approval process, suggests that this was an exceptionally well-balanced exercise. 2 The alliance culture of providing a workplace where it was safe to explore ideas that may even be considered crazy. This led not only to supporting challenges to assumptions but it also allowed cross-disciplinary ideation where, for example, the rail operator had significant idea inputs. Thus, trust and control were balanced and exercised across the NOP and OP teams.

Element 8 – Commitment to be innovative Projects owners expect alliancing and IPD projects to deliver innovation to achieve best-value project solutions (Department of Infrastructure and Transport, 2011c). Alliance participants need to be both willing and able to be innovative. This requires behavioural mechanisms that enable and empower them to be innovative. This is closely linked to a project team participant’s capacity for: learning; reflection; creativity; being ambidextrous; and the organisation’s core values of supporting and rewarding the questioning of the status quo. Chapter 8 provides a detailed discussion of the role of design thinking, creativity and innovation, and Chapter 18 discusses innovation diffusion in more depth. This section has focuses on the behaviour of being committed to innovative behaviour throughout the project life-cycle. The criterion for rating the level of authentic leadership on IPD-alliancing projects, according to Walker and Lloyd-Walker (2015, p161) is:

Low commitment levels are manifested by inadequate or incomplete linkage of motivation, ability and facilitation for innovation within the context of the procurement form. High commitment levels are manifested by vision, objectives and the desire to be innovative with well-considered instruments to measure and demonstrate innovation; motivation through rewards and incentives; and demonstrated high levels of existing absorptive capacity for innovation.

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Innovation types There are various types of innovation that may improve any project delivery: broadly speaking, product, process or behaviour innovations (Slaughter, 1998). Project participants need to understand and adapt the commitment to behaviours associated with these different innovation types so that innovation can be initiated and sustained. Walker and Lloyd-Walker (2015, p190) identify examples of thinking about commitment to innovation by: understanding how project-delivery approaches impact specific behaviours that influence the capacity and motivation to initiate and sustain innovation, e.g. program alliances have specific KRAs requiring across project collaboration; understanding the drivers and inhibitors of innovation; understanding how innovation may be initiated across the project life-cycle; and how collaborative engagement may be designed to fit a specific project phase at the project front end. Commitment to innovation involves earlier pre-conditions, such as a psychologically and intellectually safe workplace environment. Even if these exist, people need to relish the challenge of finding innovative solutions to problems. This draws upon their qualities of resilience, initiative, and sense of autonomy. Chapter 11 discusses the knowledge, skills, attributes and experiences (KSAEs) and task motivation. The model presented in Figure 11.1 and Figure 11.2 illustrates how the design of jobs and tasks can facilitate motivation by removing barriers to tinker with products, processes or systems, for incremental improvement, innovation, or experimenting to achieve breakthrough innovations. Product innovation in alliancing may include substituting materials or changing the use of materials or equipment. For example, in the LXRP Package 1 original plan, the system of piling was changed to allow vibration-sheet piling to be adopted under a system that vibrated the sheets into place. This was a product-type innovation in the sense that materials that were planned to be used (traditional sheet piling) were substituted for a novel form of ‘Giken’ piles that, while more materially expensive, were cheaper and quicker to install. This was because the product innovation accompanied process innovation as the change in the installation process resulted in opportunities to radically reduce the volume and scope of the work and dramatically improved work methods. It also triggered a systemic change because the process of rigorously investigating the innovation and the knowledge gained from that process, and challenges to previous assumptions, led to an approval process based on the interpretation of how this new technological approach impacted upon passenger and worker safety, which permitted its use on other projects within the LXRP. Additionally, it led to extra training and expertise gains in the application of the innovation. It was the alliance team’s commitment to innovation that led to contemplation of the Giken sheet-pile system being used, as well as its subsequent process-innovation and game-changing radical adoption that has led to new ‘best-practice’ standards being created across other LXRP alliance program packages. This example illustrates a product, process and game-changing innovation that could only occur with a whole-team commitment to innovation. It required intellectual input and creative energy from the design and delivery team members as well as the operation and OP participants. This innovation was also encouraged through a KRA, established for the program that rewarded innovation and enhanced that incentive with a KPI that rewarded the use of innovations from project to project within the program package and across program-alliance packages.

Commitment to continuous improvement The purpose of project innovation should be to achieve continuous improvement. The extent to which project participants implement innovative, continuous improvement depends upon 332

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several enabling commitment factors. Institutional and governance arrangements and individual motivational factors need to support innovation. The ‘system’ needs to be established in a way that encourages the commitment to innovation. Walker and Lloyd-Walker (2015, p191) identify examples of thinking about commitment to continuous improvement. Project participants need to: understand that effective sustainability can only be achieved through continuous improvement, with sound mechanisms that capture and diffuse innovation from lessons learned; have a sophisticated and deep understanding of the underlying concepts of what drives or inhibits continuous improvement; and they also need to deeply understand how to adopt and adapt mechanisms for encouraging the diffusion of continuous improvement. We see KRAs being specified for continuous improvement and innovation. For example the LXRP has a KRA for innovation. LXRP-1 described it as follows: There is innovation, and that’s KRA1, and then 1.1 is ideas, 1.2 is execution of those ideas, and then 2 is continuous improvement and efficiency. So, that one is about us getting more efficient in how we deliver them in demonstrating cost improvements from package to package to package. . . . so we need to have six good ideas a year, and a good idea is like development of new product. . . . The Execution is 1% of savings on our TOC. We see here demonstrated a real incentive for the alliance team to be motivated to implement KRA 1.2 to achieve continuous improvement and efficiency. This is reinforced by a structural governance arrangement established by the Level Crossing Removal Authority (LXRA) where they set up the Joint Coordination Committee to bring together alliance managers and other senior alliance experts to discuss the lessons learned from the series of 11 alliance packages1 and to share ideas and experiences about their continuous-improvement innovations. As seen from the LXRP-1 quote, there is an incentive to share these improvements because part of the KRA 1.2 incentive is that other alliance packages adopt and/or adapt these. LXRP-3 described the committee as follows: The JCC – the joint coordination [committee] thing – is all very senior people from all other programs and projects, and then underneath there there’s subject matter expert groups, there’s an alliance manager group, there’s a sustainability group, a design group, a construction group, and all of these equivalent positions from the different projects meet. The above sub-section illustrates how commitment to continuous-improvement innovation may be operationalised.

Testing, prototyping and experimenting Another manifestation of the commitment to be innovative is willingness to engage in testing, prototyping and experimenting. Walker and Lloyd-Walker (2015, p192) identify examples of thinking about commitment to innovation through testing, prototyping and experimenting as project participants: understanding the value of trial and error, and not being inhibited from experimenting; demonstrating a sophisticated scientific approach to effectively experiment with prototypes and simulations; and being able, when appropriate, to argue for, and influence, a case for experimentation. Undertaking this kind of explorative work can be challenging if the governance arrangements and workplace culture do not support exploration, but as Figure 15.3 illustrates, resilience is 333

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enabled through a combination of exploration and exploitation. Resilience is closely linked to innovation to overcome problems and situations that demand radical rethinking (Turner, 2011). There are numerous examples of prototyping being undertaken on IPD projects in general. For example, the Heathrow T5 terminal made widespread use of prototyping and testing assemblies off-site to rehearse undertaking complex assembly work in confined or constrained locations. The air traffic control tower is one example (Doherty, 2008, p287). Fischer et al. (2017, p222) provide examples of rapid prototyping and mock-ups in hospital constructions for an IPD project in the USA. Chapter 17 in this book provides more details of prototyping examples and Chapter 18 discusses innovation diffusion from an IPD-alliancing perspective. One of the issues discussed in Table 18.1 in that chapter is the IPD context of overcoming ‘sticky knowledge’ (Szulanski, 2003) where knowledge from innovation and experimentation is not readily transferred back to others in a project team, or where the commitment to innovate and adapt innovation is lacking. The LXRP Alliance Package 1 example above provides a recent example of a process of simulation, modelling and gaining knowledge from an innovation in the field. LXRP-3 noted that the Giken piles innovation to the program illustrates how the idea was explored and how key people were sent to observe and test the practicality of the idea in Japan. He also observed that the planning for digging 250,000 cubic metres of soil for the rail trench in 10 days involved simulation and testing of excavation methods: and you would have seen on some of the videos, like, you can see the excavators lined up, but they might be feeding ten trucks . . . each excavator might be feeding ten trucks that are on circulation to drop off the soil and sit there and get loaded up. The cognitive and emotional energy committed to this kind of innovation can be exhausting but highly rewarding. We note in Chapter 11, on KSAEs, the elements of psychological meaningfulness as indicated in Figure 11.1, adapted from the Job Characteristics Model (Hackman and Oldham, 1975). The commitment to be innovative and the rich experience of collaboration in solving a difficult problem or challenge can be enhanced by taking part in experimentation and prototyping, as was seen with the LXRP Package 1.

Rating the commitment-to-be-innovative element The indicative rating for the LXRP Package 1 alliance for this element is rated as 5. Our rationale for this score is because: 1 Continuous improvement is demonstrably held as a common and shared value on the program, with clear efforts to maintain momentum in innovation and improvement. While it was not a KRA for Package 1 it became an important KRA for all other packages as the LXRA learned from its experience; 2 The setting of KRAs specifically for innovation diffusion across projects with an alliance package and across the entire LXRP shapes attitudes and behaviours towards continuous improvement in particular and innovation in general.

Element 9 - Common best-for-project mindset Chapter 4 discusses the question of what is value. Different projects may have different outcomes and therefore best-for-project needs to be assessed in that light. Also, the best-for-project mindset is governed by how performance is measured as well as what is measured. This section discusses the 334

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degree to which people engaged in IPD-alliancing projects perceive the importance of obtaining value generated by the project-to-project-outcome stakeholders rather than delivering what was explicitly requested or demanded by them. It is concerned with their view of a successful outcome. Achieving the project outcome on IPD-alliancing projects takes precedence and priority above all other considerations (despite inherent paradoxes) rather than concerns about individual teams as winners or losers. For traditionally delivered projects, achieving the specified output is a contractual obligation that teams aim for while also achieving their own organisation’s expected benefits. These benefits include project participants achieving their home-based organisation’s budgeted profit margin, delivering on time and to the specified quality, and usually maintaining or enhancing the organisation’s reputation. Organisational learning may form relevant best-for-project outcomes as discussed in the previous element about commitment to innovation and continuous improvement. The criterion for rating the level of common best-for-project mindset on IPD-alliancing projects, according to Walker and Lloyd-Walker (2015, p162) is:

Low best-for-project mindset levels are manifested by a higher level of priority for individual benefit realisation at the potential expense of other project team members and the project owner. High best-for-project mindset levels are manifested by a genuine attitude that ‘we all sink-or-swim together’ and a focus on maximising value to the project (or network, in the case of a program). Contractual arrangements will reinforce pooled gain or pain based on performance measured by KRAs and KPIs

Alignment of common goals Project participants effectively collaborate through sharing common and aligned best-forproject and best-value outcomes. For IPD-program alliancing, this mindset is pertinent to a best-for-program goal. The XLRP has 11 separate program-alliance packages integrated into the whole scope of work, therefore the mindset also considers how to achieve the entire range of LXRP goals. The element discussion on authentic leadership is also particularly relevant to this sub-element, as it applies to reflectiveness and pragmatism. Walker and Lloyd-Walker (2015, p194) identify examples of thinking about commitment to common goals through project participants: understanding the explicit and implicit value, and limitations, of commonly aligned goals and how to achieve that alignment; understanding the context-constrained nature of goals; not being afraid to challenge, review and recalibrate goals when the context changes; and deeply understanding the process of developing and recalibrating goals (as expressed as KRAs and KPIs) to realign them when required. Alignment is necessary so that maximum effort is directed to achieve the stated outcome impact as well as the inferred outcome impact. This became clear when interviewing LXRP-2. He responded to a question posed relating to the Victorian Auditor-General Office (VAGO) review of the LXRP in which VAGO stated that: ‘travel time in the morning peak reduced by 1.9 minutes . . .’. (2017, p63). The report implied that a key program benefit had not delivered value for money (VfM) due to spending all that money to save 1.9 minutes’ waiting time. The VAGO report also stated that the prioritisation and choice of crossing removals was inconsistent with LXRP-stated aims (2017, p7). The response to this question from LXRP-2 reflects a high level of alignment of common goals, when he said: 335

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If you look at [X] Road in [suburb Y], that now carries 30% more traffic than it used to do when it was a level crossing there, and it flows better. So all the other roads around it are flowing better because that’s now carrying 30% more traffic. So you can’t look at individual sites and do traffic modelling; you’ve got to model the whole network. Just removing one level crossing at a time here and there, you do get very little benefit from it, but if you look at it from a network point of view and say ‘well, let’s work along the whole line, or in patches of a whole line, so that we can improve the road network’ it’s there, it’s a complicated thing. This quote demonstrates a sophisticated system-wide view of the program outcome and how program delivery is aligned to a whole-of-program view. There were many other comments by the five senior LXRP Package 1 participants who represented OP and NOP organisations engaged in that alliance and who indicated a common and aligned best-for-program view.

Outcomes and performance levels Performance is a multi-dimensional concept and each project has its own drivers and context that influence the balance of output and outcome measures expressed as KRAs. Once realistically usable measures are in place they can be linked to performance monitoring, decision-making and incentivisation arrangements. It’s important to think of best-forproject performance holistically. Walker and Lloyd-Walker (2015, p194) identify examples of thinking about outcomes and performance levels with alliance participants: understanding value not just in terms of what the OP had asked for but what the OP may have found difficulty expressing and actually meant to ask for; understanding how to effectively elicit information to clarify and explore the project business case and brief to clarify ambiguous or uncertain stated output and outcome requirements; and understanding the process of developing and recalibrating KPIs to enable effective performance targets to be set that best express KRA best-for-project outputs and outcomes. The IPD alliance form offers unexpected ways to deliver on best-for-project/program KRAs that may be difficult to otherwise achieve using a traditional BAU delivery form. For example, a government-funded infrastructure project may have a landscaping component. That government’s policy may also include providing work opportunities and skills development for disadvantaged community sectors. A sophisticated outcome-orientated interpretation of a KRA for this policy objective was developed on LXRP Package 1 by the AMT developing a KPI for that disadvantaged community. LXRP-1 noted that they were ‘procuring plants through a nursery that employs disabled people’ thus enabling the alliance to meet a KRA for fulfilling the government policy objective to engaging with that segment of a disadvantaged community. A KPI for that KRA was approved and the extent of landscaping using this source of labour was able to measure that outcome. In this way, an alliance of this kind can demonstrate a best-for-project in terms of not just delivery high quality landscaping but also by coupling that with a social responsibility and community support best-for-program outcome.

Challenging for excellence An alliance team that holds a best-for-project outcome view continually challenges assumptions about what KRA outcomes really mean and how they can effectively meet them. Ideally, this becomes a quest for excellence and can be an intellectual exercise in sense-making. Walker and Lloyd-Walker (2015, p195) identify examples of thinking about how challenging for 336

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excellence may manifest itself. They suggest that it comprises project participants: understanding the value of reflection on assumptions underpinning work methods and design elements to achieve sustainable outcome improvement; understanding the distinction between efficiency and effectiveness, product and service, output and outcome, to find a realistic balance in their project-delivery approach; and effectively developing and recalibrating goals (as expressed as KRAs and KPIs) to improve best-for-project outputs and outcomes. This is linked to authentic-leadership sub-elements described earlier. The main focus here is how authentic leadership leads to best-for-project outcomes. Interviewee LXRP-1 articulated the overall aim for the program for standard Level Crossing Removal Project KRAs as: don’t hurt anyone, don’t destroy the environment, keep disruption to the minimum, keep everyone happy, and deliver it on time. You’re not changing the world by doing any of them. These are all new, and these are all specific to the program. The key to this sub-element is the way that the alliance team interprets and reframes standard KPIs that measure these overall KRAs in a way that delivers well beyond standard results. This may be achieved by out-of-the-box thinking, challenging what and how the KPI measures the KRA and how that may be re-framed, not to make it ‘easier’ to achieve but to better align the actual with the intended outcome. Interviewee LXRP-1 also demonstrated how intellectually and practically difficult it is to craft KPIs to adequately stimulate excellence in performance when he said that: Efficiency is quite hard because it’s hard to establish what the benchmark is and how you filter market based movements in cost and site conditions, and how you get something that’s meaningful for measuring yourself for the next one. Efficiency is the hardest one to measure. LXRP-1 also outlined further initiatives on the Package 1 alliance in addition to the engaging with the disadvantaged community KRA and how landscaping work on the project was focussed on: there’s just the general upskilling that we’re required to do for the long term unemployed, disadvantaged, refugees, people with a disability, all that stuff is a huge focus for us. We’ve got a team dedicated to developing initiatives that help those people find work within the alliance, train them up and give them a sustainable pathway beyond the completion of the alliance work, so they can continue to get employed. So, that’s very positive, and that’s something that’s very new, I’ve never seen it in the industry. This illustrates how the alliance team are deeply reflecting on the true, intended outcome of a KRA that can be operationalised and measured through appropriate KPIs. The intellectual and creative effort expended is not focussed on ‘spin doctoring’ or finding easy solutions but on challenging assumptions in a way that does not compromise the standard time-cost-quality delivery outputs while achieving KRAs that meet social or environmental excellence outcome objectives.

Value-for-money reporting The VfM reporting process, according to the Department of Infrastructure and Transport, in their Guidance Note 4, begins at the front end of alliance projects when the business case is 337

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presented for approval and ends with the final report, due six months after project completion (2011a, p31). Guidance Note 4 (2011a, p6) also presents an illustration of the entire five-stage process. The owner’s VfM statement clearly sets out the value proposition for the project from its perspective. This forms the basis for comparison at the end of the project. Project participants are expected to devise ways in which to recognise, monitor and effectively diffuse knowledge about how their performance and workplace culture has impacted VfM on their project or program. The pragmatically important aspect of documenting a business case and the VfM statement is that it clearly sets out the minimum conditions of satisfaction (MCOS) for the KRAs. Walker and Lloyd-Walker (2015, p196) identify examples of project participants’ thinking about how to report VfM during the project execution phase by: understanding the distinction between cost and value and therefore how to best frame stakeholders’ value proposition of value for them; understanding the many ways that stakeholders may visualise value for money (VfM) so that it can be articulated in an explicit and unambiguous way; and effectively applying a process of reporting, in a meaningful yet simple way, that clearly identifies VfM best-for-project outputs and outcomes. As discussed in Chapter 11 in this book, and illustrated in Figure 11.1, task characteristics such as task identity, variety and significance influence how task-meaningfulness is perceived by people and, from that, how motivated they may be to achieve best-for-project outcomes. Also, as discussed for other behavioural elements, autonomy and authentic leadership clarify project goals to help project participants understand the goals and what best-for-project may practically mean. This sub-element focuses on a common mindset and so assessing the degree of a common bestfor-project mindset and culture requires consideration of how participant teams’ actions align with their rhetoric. One example of how this may be demonstrated is drawn from a comment made by LXRP-2 in relation to KRAs: So those behaviours and the values that we create as an alliance, those are the things which describe how we’re going to achieve the alliance objectives, and then the KRAs and KPIs sort of as a third column; that’s how we score whether we’ve done it or not. So, if anything, the KRAs and KPIs are a lag indicator, and if you try and manage your alliance with those as a lead indicator you fail, because you’ve got to understand the ‘why are we here in the first place, and how do we need to go about our business in order to achieve those things?’ This comment encapsulates the common best-for-practice mindset. He notes the value of KRAs and KPIs and indicates how these are used for incentivisation. An important point he makes for this sub-element is that the culture and mindset are all about best-for-project outcomes.

Recruiting support Effectively recruiting support for best-for-project value is an important aspect of gaining a common best-for-project mindset and culture. This may entail understanding how an effective alliance-participant recruitment strategy, as well as enlisting support for as many members of the project-delivery chain as is possible, might be pursued. Walker and Lloyd-Walker (2015, p197) identify examples of thinking about how the recruitment of project participants to this way of operating may be accomplished; by: hiring on the basis of technical excellence as being a baseline expectation with business and interpersonal collaboration skills providing the defining criterion for recruitment; understanding how to motivate and gain the 338

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support and enthusiasm of participants to work within an alliance though understanding their value proposition; understanding that strong talent-development initiatives and programs are needed to attract and retain rare talent; and effectively managing the transition of team members entering an alliance so that they remain energetic, motivated, willing and keen to remain working within an alliance best-for-project context. Understanding the role of task autonomy, feedback and salience, as illustrated in Chapter 11 in this book and in Figure 11.1, is important to not only understand how to structure tasks and roles to motivate alliance team members but also how to keep people motivated and committed. When people are brought on board to an alliance there is a specific effective strategy that may be adopted to ensure that they understand alliance norms and cultural expectations. LXRP-1 explained how sub-contractor stakeholders who are not part of the project are recruited to think in terms of best-for-project: for key packages, things like pre-casting, piling, procurement of the superstructure there, and that’s a key package for us, is getting them in, involving them, properly on-boarding them within the alliance, and even though they’re not part of it, and they don’t have a commercial buy in to all of this stuff, is aligning what looks good for them with what looks good for us in safety, schedule, price, the whole lot. This demonstrates how attuned LXRP-1 was in terms of the value proposition of these important non-alliance project participants to gain their commitment to best-for-project outcomes. Similar comments were made for recruiting the general public as well as all project alliance participants.

Rating the common best-for-project-practice element The indicative rating for the LXRP Package 1 alliance for this element is rated as 5. Our rationale for this score is because: 1 2 3

Common alliance goals are clearly expressed and embedded within the alliance program; The radical changes that resulted in use of equipment and delivery-process innovation was articulated and undertaken clearly from a best-for-program perspective; The quality of on-boarding of both alliance participants and subcontractors and suppliers ensured that the mindset for the alliance was consistently positive.

Element 10 – No-blame culture This chapter clearly identifies a number of behaviours that cross sub-element boundaries. One of these behaviours is the no-blame culture that is supported by authentic leadership – particularly the appreciativeness, spirit and authenticity sub-elements. Another was how the trust–control balance is important and how testing, prototyping and experimentation sub-element supports a no-blame culture. Chapter 18, on innovation diffusion, also discusses the concept of ‘sticky knowledge’ and how a ‘fertile organisational context’ (Szulanski, 1996) that includes a no-blame culture for experimentation is important for collaboration. A no-blame culture that encourages people to take responsibility and accountability for problems as they arise is critical for innovation and trust to flourish. Shifting responsibility to others who may be vulnerable to being blamed for potential failure, is a sign of a high-blame culture. Being ‘part of the solution’ by participating in an overall acceptance of the shared and multiple responsibility for decisions and actions requires discussing problems in an unprejudiced manner 339

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and opening up prospects for perceiving issues from multiple perspectives. A no-blame culture has been shown to be a key alliancing feature, encouraging innovation and collaboration, with specific examples illustrated by Lloyd-Walker, Walker and Mills (2014). The criterion for rating the level of a no-blame culture in IPD-alliancing projects, according to Walker and Lloyd-Walker (2015, p162) is:

Low no-blame culture is manifested by a project participant’s high propensity to shift blame from themselves to others. These problems may be attributable to them for unforeseen, unanticipated or unwanted events that impact adversely upon project delivery. A low no-blame culture is also palpable by a tendency to avoid acknowledging potential problem situations in the hope that blame can be attributed to others. High no-blame culture is manifested by a culture of the open discussion of problems, unforeseen, unanticipated or unwanted events that may impact adversely upon project delivery. The purpose of a no-blame culture is to achieve wider team participation in collaboration and collective management of problems, and to take responsibility and accountability for developing problem solutions. It is may also be manifested by the PO taking ownership of risk elements that other participants are unable to bear, rather than force them to accept accountability for such risks.

We now discuss the sub-elements for this element.

Rationale for a no-blame culture The reason why alliance participants may accept a no-blame culture by adopting it into their norms and avoiding a blame-shifting culture may be triggered from two opposing directions. First, they may have felt pain and hardship through past experiences of being blamed and either realise its negative impact or, consequently, are determined not to inflict that pain on others. Alternatively, they have experienced the positive impact of a no-blame culture and want to repeat that experience. The rationale to be valid needs to be combined with the authentic leadership– followership characteristics of reflectiveness, being appreciative, spirited and pragmatic. Walker and Lloyd-Walker (2015, p199) identify examples of project participants thinking about a no-blame culture by: reflecting upon past experiences of the harm triggered by a blame culture and identifying and understanding how those behaviours developed and were supported or hindered by the workplace or prevailing community culture; and understanding and being able to develop alternative mechanisms to those that produce and nurture a blame culture. The LXRP had some unique features of no-blame because it involved the Rail Safety Act and, as an act of law, it is unforgiving. This sets no-blame boundaries in terms of general public safety. External stakeholders, such as the general public and the media, would not be part of a no-blame culture. This, therefore, guided the alliance in terms of understanding the limits of a no-blame culture. However, this level of potential blame by external stakeholders can be mediated. One example in the LXRP of how a no-blame culture may be sustained is illustrated by the comment from LTRP-2, who discussed the way that the trust–control balance operated when he introduced a radical change in the project that was highly ambitious, but: he had a team of team experts to meticulously work out the practicalities of the plan. He explained a conversation he had with the OP project director: 340

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We had all these big numbers . . . I gave them in the presentation – 260,000 cubic metres of soil to dig out in ten days, 35,000 cubic metres of concrete to pour in six days, and we talk about all these numbers and at one point my manager said to me ‘stop talking about the numbers, they’re too big, they’re scaring people’. Like I’d go present to my CEO [chief executive officer] and I’d do the quarterly report and say ‘this is what we’re doing’ and he’d look at me and he’d say ‘really?’ He never said ‘you’re bonkers, you’re crazy, you can’t do it’ but it was always that ‘really?’ This exemplifies the spirit of no-blame behaviour. It can’t exist effectively without a solid trust–control balance where the trust is based on confidence of expertise and understanding the complexity of the context and how that complexity is being addressed.

Facilitating mechanisms for a no-blame culture A key no-blame facilitating mechanism is the need for collaborating parties to understand the situational context, not only from their perspective but from that of others. Understanding problems faced by each party to the collaboration and an ability to constructively use knowledge to generate creative win–win problem solutions is crucial. Developing consensus decision-making (discussed in element 11) also helps develop a no-blame culture. This is because it becomes illogical to allocate blame to others for decisions that each party has agreed on. Having a binding no-litigation agreement also supports trust because there is greater confidence in parties sharing an interest and this is further reinforced by having agreed fair incentivisation arrangements tied to project performance rather than individual team performance. Alliance agreements are worded in terms of ‘we’ rather than ‘you’ (Department of Infrastructure and Transport, 2011b), prompting an institutional influence on ‘norms’ that evolve during the project life-cycle. As discussed in the chapter introduction, ‘norms’ have a powerful influence on how behaviour becomes institutionalised, and how people then make sense of situations (Scott, 2014), in helping them constructively deal with a setback rather than engage in ‘finger pointing’. LXRP-4 explained how the LXRA had institutionalised drawing external stakeholders into a process of a shared understanding of issues arising out of the works that may impact them and how they could influence the project outcome. Chapter 14 discussed stakeholder engagement in more depth but one relevant aspect here is that once the context, constraints and opportunities of a situation are understood, people will make allowances and be tolerant to disruption to their lives. He stated: we’re probably at that tipping point where that Australian culture of, ‘Okay, you’ve got to break a few eggs to make an omelette. I’ll tolerate some pretty serious disruption for a short, sharp period of time, but I know there’s going to be an awesome product at the end’, you know, I think we’re probably teetering on the balance of that at the moment. This quote shows how this one facilitating mechanism may be used to mitigate against blame.

Rating the no-blame culture element The indicative rating for the LXRP Package 1 alliance for this element is 4.5. Our rationale for this score is because: 341

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1

There appeared to be little or no evidence of a blame culture in the organisation. The way that all stakeholders reacted to the decision to accelerate construction of the ‘big dig’ using a revised construction strategy; the exploration and preparation for using innovative sheet piling methods and the stakeholder-engagement approach points towards a healthy no-blame culture that enabled bold decisions and actions to be taken and yield favourable results. 2 The link between no-blame and efforts and success in gaining unanimous agreement to critical decisions was also indicative of a low-blame culture. This agreement was reinforced internally through the alliance ‘no-litigation’ clause (we discuss that in more depth in Chapter 21). External and internal alliance stakeholders such as the subcontractors and suppliers, as well as external stakeholders such as the general public, were also educated through the alliance communication processes to better understand the context and rationale for decisions and actions and this facilitated a no-blame culture from their perspective.

Conclusion This chapter explained the behavioural factors that deliver normative practices to support effective alliancing. Each of the elements from 6 to 10 was explained in detail, with the criterion for each element spelled out and the rationale for rating them for the LXRP alliance Program Package 1 was explained, providing quotes and evidence to support our assessment. An illustration of these ratings is provided in Figure 15.4. This provides an example, as explained in Chapter 1 of this book, of how these elements could be rated for a benchmarking or heath-check exercise. A radar diagram for these elements graphically illustrates this Collaborative Framework component. 1 Motivation and context 16 Mutual dependence and accountability 15 Transparency & open-book

14 Pragmatic learning-inaction

5 4.5 4 3.5 3 2.5 2 1.5

2 Joint governance structure 3 Integrated risk mitigation

4 Joint communication strategy

1 0.5 0

13 Incentivisation

5 Substantial co-location

12 Focus on learning & continuous improvement

6 Authentic leadership

11 Consensus decision making

7 Trust-control balance

10 No blame culture

8 Commitment to innovate

9 Common best-for-project mindset/culture

Figure 15.4  Behavioural factors radar diagram

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Note 1 See Victorian Auditor-General’s Office (2017). Managing the Level Crossing Removal Program, Melbourne, ISBN 978 1 925226 58 4 101, page 22 for list of alliance packages

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Derek Walker and Beverley Lloyd-Walker Parker, S. K., Atkins, P. and Axtell, C. (2008). Building better work places through individual perspective taking: a fresh look at a fundamental human process. International Review of Industrial and Organizational Psychology. Hodgkinson G. P. and J. K. Ford. Chichester, John Wiley & Sons. Pishdad-Bozorgi, P. and Beliveau, Y. J. (2016). “Symbiotic relationships between integrated project delivery (IPD) and trust.” International Journal of Construction Education and Research. 12 (3): 179–192. Raelin, J. A. (2001). “Public reflection as the basis of learning.” Management Learning. 32 (1): 11–30. Raelin, J. A. (2007). “Toward an epistemology of practice.” Academy of Management Learning & Education. 6 (4): 495–519. Rittel, H. W. J. and Webber, M. M. (1973). “Dilemmas in a general theory of planning.” Policy Sciences. 4 (2): 155–169. Rowley, J. (2006). “What do we need to know about wisdom?” Management Decision. 44 (9): 1246–1257. Schön, D. A. (1983). The Reflective Practitioner – How Professionals Think in Action, Aldershot, UK, BasiAshgate ARENA. Scott, W. R. (2014). Institutions and Organizations, Thousand Oaks, CA; London, SAGE Publications Inc. Senge, P. M. (1990). The Fifth Discipline – The Art & Practice of the Learning Organization, Sydney, Random House. Slaughter, E. S. (1998). “Models of construction innovation.” Journal of Construction Engineering and Management. 124 (3): 226–231. Snowden, D. J. and Boone, M. E. (2007). “A leader’s framework for decision making.” Harvard Business Review. 85 (11): 69–76. Söderlund, J. (2010). Knowledge Entrainment and Project Management: Understanding Project Management as Knowledge Integration under Time Pressure. IPMI Research Conference 2010, Washington July 11–14, Messikomer C., PMI: 23pp. Szulanski, G. (1996). “Exploring internal stickiness: impediments to the transfer of best practice within the firm.” Strategic Management Journal. 17 (Winter special Issue): 27–43. Szulanski, G. (2003). Sticky Knowledge Barriers to Knowing in the Firm, Thousand Oaks, CA., SAGE Publications Inc. Toor, S.-u.-R. and Ofori, G. (2008). “Leadership for future construction industry agenda for authentic leadership.” International Journal of Project Management. 26 (6): 620–630. Tulley, S. (1998). “How Cisco mastered the net.” Fortune. 4 (138): 207–209. Turner, J. R., Müller, R. and Dulewicz, V. (2009). “Comparing the leadership styles of functional and project managers.” International Journal of Managing Projects in Business. 2 (2): 198–216. Turner, N. (2011). The Management of Ambidexterity – An Intellectual Capital Perspective. PhD, School Management. Bath, University of Bath. Tversky, A. and Kahneman, D. (1974). “Judgment under Uncertainty: Heuristics and Biases.” Science. 185 1124–1131. Victorian Auditor-General’s Office (2017). Managing the Level Crossing Removal Program, Melbourne, ISBN 978 1 925226 58 4 101. Victorian State Government (2017). Level Crossing Removal Project – Program Business Case, Business Case. Melbourne, Victorian Government: 287pp. Volbers, J. (2012). “Wittgenstein, Dewey, and the practical foundation of knowledge.” European Journal of Pragmatism and American Philosophy. VI (2): 105–117. Walker, D. H. T. and Lloyd-Walker, B. M. (2011). Profiling Professional Excellence in Alliance Management Summary Study Report, Sydney, Alliancing Association of Australasia: 36pp. Walker, D. H. T. and Lloyd-Walker, B. M. (2015). Collaborative Project Procurement Arrangements, Newtown Square, PA, Project Management Institute. Walker, D. H. T., Matinheikki , J. and Maqsood, T. (2018). Level Crossing Removal Authority Package 1 Case Study, Melbourne, Australia, BIM+ Research Group, School of Property, Construction and Project Management, RMIT University: 38pp. Whyte, G. and Levi, A. S. (1994). “The origins and function of the reference point in risky group decision making the case of the Cuban missile crisis.” Journal of Behavioral Decision Making. 7 (4): 243–260. Wolff, M. F. (1987). “To Innovate faster, try the skunk works.” Research Technology Management. 30 (5): 7–9.

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SECTION 4

Section 4 moves far beyond an update of the Walker and Rowlinson (2008b) edited book content that related to technology and process aspects of relational contracting forms such as integrated project delivery (IPD). In this handbook we have been able to broaden the scope of discussion as well as deepen it to reflect the changes that have taken place more recently with internet-based technology that connects so many actors in the IPD process. Another implication of recent and emerging advances in ICT is that an unprecedented volume of data and information is generated through design and delivery of projects that places massive challenges to IPD teams in knowing how to effectively manage data and information to enhance collaboration rather than smother it. ••

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Chapter 16 – The new role for emerging digital technology to facilitate IPD and improve collaboration: a disruptive innovation perspective: Newton, Lowe, Rowlinson and Walker in Chapter 16 provide a fresh look at digital disruption technologies that have taken us beyond building information models (BIMs) as a design or even facilities management tool. They highlight emerging digital technologies affecting the way that digital technology is perceived and applied within the IPD world in particular. They also discuss how technologies such as drones, 3D printing and radio frequency identification (RFID) may impact the way people work and how collaboration may be enhanced and IPD undertaken to cope with and adapt to technological innovation game changers. Chapter 17 – IPD from a lean-supply-chain management perspective: Walker and Matinheikki in Chapter 17 take a cue on themes of system integration and links between technology and humans, projects and firms engaged within a supply chain. They draw upon developments and lessons learned about SCM, also drawing upon emerging ideas of agile PM. Two case studies are used to demonstrate how lean thinking may be related to logistics and SCM. The first case study discusses the Australian Victorian government’s Level Crossing Removal Program (LXRP), more specifically the way that IPD influenced a 24/7 rail section shut down in a ‘37-day blitz’ to remove four rail crossings, lower the rail grade and construct four bridges as well as associated rail station and signalling works. The second case study traces the development of the ‘Baulog’ logistics approach to the redevelopment of the Potsdamer Platz in Berlin. This chapter moves beyond SCM and Lean principles to also focus on how planning theory practice is being re-thought because of opportunities offered by the integration of the facility operator in the project delivery team.

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Chapter 18 – IPD: facilitating innovation diffusion: Love and Walker first focus in Chapter 18 on how the process of learning and innovation diffusion takes place and then moves on beyond being limited to a descriptive mode to being based on recent empirical work within an alliance environment, to explain how people and technology are generating dynamic capabilities. This chapter explores how innovations are diffused into participating IPD organisations as an added incentive for them to collaborate. Two case study examples of innovation diffusion in a program alliance context are also presented. Recent findings from research into how knowledge management and organisational learning was achieved on the two program alliances in Australia provide specific relevant concrete examples of how lessons learned about innovative ways of working were diffused across both program alliances. Chapter 19 – IPD governance implications: In Chapter 19, Andersen, Klakegg and Walker take a more detailed process focus on governance, through discussion of front-end project aspects. For example, they explore stage-gate processes, originally recommended by the Office of Government Commerce (2007) for commercial and infrastructure projects in particular. They also draw upon work by Merrow (2011) on industrial mega-projects, and Samset and his colleagues in studying the Norwegian CONCEPT process (Samset, Andersen and Austeng, 2014) in the petrochemical and mineral-extraction industry sector. This front-end governance work critically impacts IPD projects during their early stages. The chapter also more broadly discusses governance in IPD projects from the perspective of organisational structures such that seen with alliance leadership teams (ALT) and alliance management teams (AMT). Chapter 20 – Information management in the built environment: In Chapter 20, Agdas, Miska, Memon, Rowlinson and Walker segue from the previous chapter to focus on data and information management because opportunities and threats presented by taking advantage of ‘big data’ and sensibly adopting information technologies present challenges to organisations to adapt their strategic planning and delivery processes of project delivery to suit this new environment. A potential for more effective information management using these emerging technologies, particularly at the facilities operations end of the project cycle, has been shown to be a game changer. Their impact on facilitating collaboration and the potential impact on sustainability and facilities operational efficiencies makes this topic a vital consideration for IPD practitioners. Chapter 21 – Processes and means elements of the IPD Collaboration Framework: Walker and LloydWalker in Chapter 21 explore and explain the processes and means component in more detail to elaborate further on the Collaboration Framework briefly discussed in Chapter 2.

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16 THE NEW ROLE FOR EMERGING DIGITAL TECHNOLOGY TO FACILITATE IPD AND IMPROVE COLLABORATION A disruptive innovation perspective Sidney Newton, Russel Lowe, Steve Rowlinson and Derek H. T. Walker Introduction In order to achieve integrated project delivery (IPD), traditional ways of contracting, working and the culture of the industry itself must change. Such transformational change invariably requires some form of catalyst (DeGroote and Lefever, 2016). The significance of construction to the global economy, the broadly ageing workforce, low productivity, high risk, accelerating costs, widespread vertical and horizontal organisational integration, and various other key factors might each provide the necessary impetus for change (Hong Kong Development Bureau, 2018). However, it is emerging digital technology that is set to disrupt the industry perhaps more than any other factor (World Economic Forum, 2018). Certainly emerging digital technologies will facilitate many of the key changes required for IPD to be realised (Kahvandi et al., 2017). However, this chapter focusses on the role of emerging digital technology as a disruptive agent, a role that emerging digital technology can play simply as the catalyst of change. Disruptive innovation is not something any organisation can formalise (Christensen et al., 2015). There is an old adage that change will take far longer to take effect than you might predict, and will be far more significant than you can imagine. Significant change is the result of revolution, not evolution. All this is to say that transformational change cannot be legislated for or planned in detail. Fundamental change, which is what the adoption of IPD would represent, like disruptive innovation, must be facilitated (Christensen and Overdorf, 2000). This chapter will propose a new role for emerging digital technology in the context of IPD, in the role as a catalyst for change. Thus, there is a deep and fundamentally complex question to be addressed in this chapter. How might the industry, an organisation or a motivated individual most effectively leverage an emerging digital technology to disrupt the extant construction industry and promote fundamental change? 347

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The chapter begins with a consideration of the construction industry and why it is ripe for disruptive innovation. It then broadly provides an overview of the emerging digital technologies of particular relevance to the construction industry at this time. Adopting virtual reality as a case in point, the chapter frames a three-phase approach to disruptive innovation: sourcing and evaluating emerging digital technologies; developing and producing digital prototypes; and pitching for a pilot evaluation project. A fourth phase that deals with the entrepreneurial and business development aspects of disruptive technology innovation is beyond the scope of this chapter. This chapter links to Chapter 17, on taking a lean-construction perspective of IPD, that includes discussion on agile and scrum approaches and also to Chapter 7, the case study of an advanced factory manufacturing pre-cast concrete elements in an integrated supply chain.

Why is a new role required? Report after report, internationally, from Murray and Langford (2003) onwards, has identified the same key characteristics of a construction industry facing fundamental challenges and, consequently, increasing pressure to change (see, for example, HM Government, 2013; Hong Kong Development Bureau, 2018). The broadly common set of fundamental challenges can be summarised as follows: ••

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Workforce: the construction industry has long adopted a fragmentation of skills across design, engineering, construction, trades, management, supply, operation, etc. Most especially in the trades and site-labour context, the age of the workforce is increasing, there is a crisis in the number of young workers coming into the industry, and a significant and enduring gender imbalance. The contracting labour supply market promotes lower-quality entrants with reduced training requirements. Structure: a generally adversarial contractual arrangement, with separation not only between supply and demand but across the entire production team and along the complete delivery and operational process. The strictly competitive nature of most construction activities tends to promote poor procurement decisions and raises difficult barriers for efficiency improvement and change management. Nature: the predominantly bespoke nature of much construction work renders the industry as characteristically high-risk and high-cost. There appears to have been a general acceptance (by the industry itself as well as by its clients) that the time, cost and/or quality of construction will almost inevitably perform poorly. Business: construction is one of the critical national economic levers and consequently, more than most sectors, is subject to highly fluctuating cycles of demand. With fluctuating demand comes pressure to drive up volume, minimise overheads (such as sunk costs in research, workforce, or capital equipment), to price gouge, and over-rely on litigation. Industry image: there is now a deeply entrenched public perception, generally wellfounded, that construction is physically and mentally over-demanding. The financial rewards and job satisfaction may be high, the achievements may be tangible, but the shadow cast by poor health and safety outcomes, the traditionally austere working environment, and evidently embedded prejudices, remains pervasive. Productivity: construction is an industry plagued with the reputation of low productivity growth. There are clear grounds for claiming that construction has failed to match the productivity improvements of other, more manufacturing-based, industries. Given the significance of the construction industry to most national economies and the growing investment in the built environment in general, the relatively poor productivity performance of construction is highlighted as perhaps the major challenge for the industry in the future. 348

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These challenges determine that the construction industry is primed for change (Farmer, 2016). At the same time, emerging digital technology is offering a broad palette of industrial change enablers (Pricewaterhouse Coopers, 2017). Here again there is broadly consistent scoping, internationally, of which emerging digital technologies will most impact the construction industry. Indeed there is broadly consistent scoping of which emerging digital technologies will most impact industry and society in general. The significant technologies include: •• ••

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Cloud computing: this is a general term for anything that involves delivering hosted services over the Internet. Cloud computing is accelerating the uptake of digital innovation in construction by delivering improved software services and enhanced mobility. Building information modelling (BIM): where the digital representation of a building geometry is supplemented with an integrated database of related construction and operational information, such as material type, manufacturer, cost, maintenance regime, etc. In particular, BIM promises to integrate the design, construction and operational phases of a project, aiming to reduce the incidence of rework and better enable production efficiencies. Augmented and virtual reality: is able to immerse the user in a highly realistic rendition of a proposed building and/or superimpose elements of a digital model onto the real world. The technologies are being used to improve design communication and support technical work activities on site. Scanning and automated data capture: creating digital representations of the as-built project (whether existing, in progress or completed) is critical to the design, construction and operation of a built facility. The rapid development of LiDAR (laser scanning) and photogrammetry, twinned with the availability of low-cost drones (unmanned aerial vehicles) has allowed for safe, efficient, timely and accurate digitisation to drive significant gains in the overall project management. Internet of Things (IoT): describes the system of connected electronic sensors and actuators attached to objects in the real world. Electronic sensors now come in a multitude of forms and can be used to monitor operating conditions, performance levels and/or the physical state of any entity at any given time. This capacity to create a digital twin of the real world is driving an explosion in new applications and services where live data and data captured over time can be used to better inform decision-making. What is especially exciting about this live data and data collection over time is that it can also include user behaviour data. That means the circular dependency between building performance and user behaviour can finally begin to be closed. Data analytics: few corners of the economy and life in general are free from the prospect of being impacted by digitalisation and the massive data sets that this process of digitalisation will produce. Data analytics refers to the growing range of techniques and algorithms used to interrogate and make sense of these super-large data sets (so-called ‘big data’). For the construction industry, this offers a transformative opportunity to shed the traditional findand-fix approach to problem-solving, and to adopt instead a predict-and-prevent approach. The impact of data analytics on the structure and very nature of the construction industry can be expected to be rapid and ubiquitous. Blockchain: due in part perhaps to its initial association with bitcoin and the dark net, blockchain is often considered something of a sinister technology. In operation, it could have quite the opposite implication for the construction industry, as it offers the potential to make any transaction (whether financial, contractual, communicative or any other form of exchange) secure and transparent. That is to say, blockchain technology moves any transaction record into a distributed representation that is permanent, virtually impossible to hack, 349

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and lodged in a sequence of related past and future transactions. Given that construction activity generates masses and masses of complex and critical transactions as a matter of course, the potential for blockchain technology to provide improved transaction management is hugely significant. Machine learning and artificial intelligence: the promise of machine learning and artificial intelligence seems in hindsight to have been long coming, but is now very definitely upon us. Machine learning is a particular branch of artificial intelligence that employs increasingly sophisticated algorithms to identify patterns from data records and utilise these to automate model-building and make decisions with minimal human intervention. How completely artificial intelligence will replace human decision-making is a subject for ongoing debate, but it will certainly have significant capacity in that regard. The accelerating computational power available and the increasing digitalisation of processes is advancing the capabilities and applications of artificial intelligence substantially.

Collectively, these and other digital technologies are referred to in general as Industry 4.0, and specifically as Construction 4.0 (Pricewaterhouse Coopers, 2016). This is the term used to describe the fourth generation of industrial revolution: the digitalisation of industries. There is a strong sense of Construction 4.0 being the next, almost inevitable, evolution of the construction industry. However, the construction industry is renowned for being slow to adopt digital or any other form of innovation. There is a strong justification for this reputation (Frost and Sullivan, 2018). Certainly, different construction organisations are at different stages of the digital transformation process, with the majority still to embrace digital innovation as a fundamental driver of business operations. The broader impact of Industry 4.0 has also been discussed elsewhere in terms of collaboration and the integration of knowledge, skills and attributes (Walker and Lloyd-Walker, forthcoming). The workforce must adapt to these emerging digital technologies as a fundamentally novel economy with creative new ways of working. The relevance of this chapter to wider discourse is also highlighted.

‘The Chasm’ – a psychological and capabilities gap due to investment constraints, policy inertia or lack of relevant skills

Organisations willing but unable to grasp opportunities

Organisations conservative and complacent in their market strength

Organisations empowered to leverage change

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Organisations actively seeking new opportunities Innovators

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Figure 16.1  The innovation-adoption curve (Adapted from Rogers, 1962)

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Figure 16.1 represents the classic innovation-adoption curve initially proposed by Rogers (1962). It illustrates what is perhaps the natural intuition, that there will be a proportion of businesses keen to engage with digital technologies as early adopters, and the significant majority of businesses that prefer a more conservative approach. This conservative majority tends to comprise the larger, industry-leading and more complex incumbents, for whom change often represents a direct challenge to the very business and operational models that made them successful in the first place. The remainder of the conservative majority comprises the many smaller, potentially more agile businesses. However, for the majority of small construction organisations, digital transformation can require a level of capital investment they may be unable to achieve, a whole-of-industry change they may feel unable to influence, and can demand new digital skills they may find difficult to acquire (Ernst and Young, 2017). Within the construction industry sector there is a strong sense of systemic inertia. The early adopters follow the innovators who enjoy, or have a propensity to experiment and drive, innovation through a belief that there are always better ways to do things. They want to make changes to capture potential value from product and process improvements and to share that value with their customers. The early adopters, however, are frequently intelligent smart adapters rather than the more ‘copycat’ adopters who follow later. Through cross-disciplinary, cross-generational and other forms of diversity of people engaged in the adoption strategy, early-adopter organisations experiment in how the innovation impacts their organisation’s systems and routines and so form an intelligent way to adapt effectively. This is a positive outcome to early adoption, regardless of the success or otherwise of any particular innovation. Earlyadopter organisations find collaboration and integrated group experiences useful in drawing together the multiple perspectives required to more fully explore and anticipate the potential unintended benefits and adverse consequences of innovation. Early technology adopters everywhere face the challenge of traversing the (so-called) chasm that can block broader uptake. There is a real sense that any one part of the conservative majority will avoid adopting a new technology until the rest of the conservative majority has already adopted that technology (Saxon, 2018). As Christensen et al. (2015) point out, this group of organisations may have good reason to hold back from adopting and adapting technology changes. Change often requires an established organisation to provide extra value (at extra cost to their margin) for services and features that the client may not immediately perceive to be of equal value to them. For the conservative majority of organisations, disruptive innovation may actually not be developed or promoted for sound short-term reasons. We experience this impasse with many forms of digital innovation. At the same time as the more risk-averse businesses are most comfortable sustaining current market dynamics, there is an unfortunate but understandable tendency for many digital-technology commentators to focus on the future and the things that more comprehensive digital transformation will deliver in the future. For example, the vision is painted of a construction site of the future where robots replace humans, new materials self-assemble, drones monitor progress and machine learning predicts and solves problems before they arise – or some such vision (see for example, Balfour Beatty, 2017). Regardless of the veracity of such predictions, their very futuristic nature can only feed the reluctance of the conservative majority to implement digital technologies now – ‘we can deal with the future, in the future’ where early adopters are attracted by the futuristic nature of these new technologies, such innovations regularly fail to cross the chasm and gain broader uptake by the conservative majority because the message does not change accordingly. The chasm illustrated in Figure 16.1 can also be addressed more directly through IPD adoption. For example, the rigidity of being restricted by legacy systems can play a significant role in blocking innovation. However, that role may be obviated through an IPD perspective where 351

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participating organisations are required to adopt a single, more unified approach – to digital communication technologies, for example. The so-called ‘skunkworks’ nature of an IPD project, wherein a project alliance allows freedom to experiment and broadens the diversity of the integrated team, applies multiple perspectives to make sense of the application and adaptation requirements of an innovation. The use of a skunkworks approach has been used to trigger the successful adoption of radical innovation technology for many years (Wolff, 1987; Gwynne, 1997; McKenna, 2010). One might conclude that emerging digital technology will fail to facilitate IPD and improve collaboration beyond the early adopters, as long as the chasm phenomenon on the innovationadoption curve applies. The chasm phenomenon applies in large part because successful construction companies are adept at the stepwise/continuous and breakthrough improvements in their operations that allow for products and services to evolve with the technologies over time. This is the conventional model where innovation is driven by the market leaders (Christensen et al., 2015). As things stand, there will be a minority group of early adopters for any new technology, but the conservative majority will evolve their uptake of the technology over a longer term. The chasm will take time to breech, and the evolution of IPD and improved collaboration will mark a similar pace of change. In order for new technology innovation to provide the necessary catalyst for the substantive, whole-of-industry changes, required to drive IPD and radically improve the performance of the construction industry, a different perspective is required. The new role for emerging digital technology – required to facilitate IPD and improve collaboration called for in this chapter – is an entirely more disruptive model of innovation.

A disruptive innovation perspective There is a growing literature specific to disruptive innovation, which all stems from the original formulation by Christensen (Christensen and Overdorf, 2000). However, disruption is one of those terms that has been eagerly appropriated in common parlance, and as a consequence has come to mean pretty much anything that changes the dynamics of a market. The formal definition of disruption is more specific. A more specific definition of disruptive innovation is important, as it provides a more discerning lens for particular forms of innovation and more particular lessons on how to be successful in driving substantive industry change through new technology innovation. The theory of disruptive innovation is particular to a process where emerging organisations with limited resources are able successfully to challenge, and ultimately displace, the established incumbents in an industry (Christensen et al., 2015). In so doing, the industry is radically changed and improved. More specifically, where the incumbents evolve in response to new technologies and market forces, the disruptive organisation often leverages new technologies to establish low-end or new market footholds and develops these to displace previous incumbents by reinventing the market dynamics. Disruption has occurred when the mainstream market adopts the new business model, practices, and/or technologies of the disruptive innovator. The theory as explained by Christensen et al. (2015) is generally applied to radical product or service innovations that fundamentally challenge an entire industry. In a literature review paper, Christensen et al. (2018) trace the origins and history of disruptive technology change from rapid advances in the disk-drive industry through to the rise of Uber and Netflix. However, in this chapter we are more interested in how the nature of disruptive change might be applied at the project level, more specifically at the project level of the infrastructure-engineering sector. Little has been written on disruptive digital technological change in this context, but we can certainly learn from the lessons and build on the foundations laid by scholars such as Christensen and his colleagues (Christensen et al., 2015; 2018). 352

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At the level of the project, disruption may be considered through the lens of the individuals that change the way that the projects are delivered. IPD, as stressed throughout this book, is a relational approach to project delivery in which the project owner and delivery teams collaborate, and often in the case of alliancing this includes the facility operator. IPD itself already implies a degree of innovation. But transformational change, the kind of quantum change to how a sector operates, at this moment in time, is best driven through the disruptive application of digital technologies. Specific to IPD, this refers to the digital technologies that are capable of creating a more collaborative project setting for design, construction and operation. The key potentially disruptive digital technologies already identified as relevant to IPD include cloud computing (making access to data more ubiquitous) and advances in BIM (including the use of immersive technologies to create a virtual and augmented reality perspective of a project that may have been captured in using drones or data-point clouds from digital sensors). These key digital technologies will inevitably drive significant change, but the aim of this chapter is to highlight how such technologies can also be leveraged through a more disruptive agenda. A good example of significant digital-technology-driven change is discussed elsewhere in this book, relating to the Victorian Level Crossing Removal Program alliance (see Chapter 14’s section on digitisation for project stakeholder engagement). In that example, a digital model was created from drone data capture as well as sensors that created data-point clouds. The model was then used to test the design practicality and safety with train drivers and other stakeholders to ensure that the design would work as anticipated without unintended consequences that may prove dangerous or costly later, after handover of the facility. These are significant innovations, as they radically change the way that the design of this type of structure may be undertaken. Similarly, other digital technologies promote major improvement in the operational efficiency of project delivery – including the use of radio-frequency identity tags to know the location of objects, or to monitor such things as moisture, movement or functional efficiencies. In the case of IPD projects, where the project owner is likely to be relatively sophisticated and to appreciate the value (both short-term efficiency cost/time value and longer-term operational effectiveness value), radical innovation can have a significant market advantage for those who participate in this kind of collaboration. First, for example, those IPD participants in an alliance that work with an owner-participant in developing the effective adoption and adaptation of digital innovation may gain confidence to be invited to tender for further work, thus reducing the transaction costs of their seeking such opportunities. These non-owner alliance participants may also find that their absorptive capacity affords them significant advantage against future alliance-syndicate competitors. Absorptive capacity, the ability to absorb new learning and knowledge and develop the dynamic capabilities to exploit these, has been identified as an important advantage of IPD participation and alliancing in particular (Love et al., 2016). Figure 16.2 combines ideas proposed by Christensen et al. (2015) together with ideas about gaining dynamic capabilities through absorptive capacity gains. Teece was an early scholar of dynamic capabilities (Teece et al., 1997; 2012; 2014) and describes them as sensing, seizing, and transforming. This approach seeks to combine sophisticated opportunity-identification for improvements and innovation, together with the ability to take action to capture these improvements and to change direction and transform processes and strategies and to rapidly adapt to improvement changes. Manley and Chen (2017) demonstrate how organisational learning, through developing enhanced absorptive capacity, occurs in alliance projects. As a consequence, we see the growing acceptance of IPD as a means to gain enhanced competitive advantage through collaboration on the application of emerging digital technologies. While at this point the process seems to occur piecemeal, there is a growing realisation of the strategic benefits of engaging with these technologies and experimenting or ‘playing’ with them to ultimately gain competitive advantage while enhancing productivity and value-creation in a broader sense. 353

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Continuous improvement based on learning from a disruptive change

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Time and learning Figure 16.2  Disruptive innovation in an IPD context

Figure 16.2 illustrates one view of how the disruptive entrant might enter the market. In this IPD context we see the difference in value-creation by two hypothetical IPD syndicates. The mainstream IPD-participation experience assumes continuous improvement, and greater valueadding normally occurs through this process. The line dips a little but rises over time because it takes time for organisations within an IPD syndicate to effectively collaborate, and so at first there may be alignment and adjustment inefficiencies that later become resolved and overcome. The higher-end IPD syndicate, with greater propensity for innovation, is also more likely to have high levels of absorptive capacity. Indeed, their potential value-adding may even start at a higher level than comparable mainstream potential. However, where an IPD syndicate can be configured to include and enable the groups of innovators and early adopters illustrated in Figure 16.1, embracing and experimenting with digital and other process innovations becomes both intrinsic and potentially more disruptive. This capacity is illustrated in Figure 16.2 by the steep solid curve. The higher-end IPD syndicate does not merely adopt digital technologies but develops them as disruptive innovations and ultimately adapts them further through continuous improvement and adjusting to changed contexts caused by the introduction of disruptive technologies. Figure 16.2 illustrates how the higher-end IPD syndicate increases the dynamic capabilities of all participants, including the owner-participant, and this also prepares them better to embrace the next set of radical innovation opportunities. Positioning the project syndicate as a higher-end IPD organisation transforms the individual participants and organisations to be more responsive to change and opportunity, providing tangible competitive advantage over mainstream competitors. With the explosion in functional capability brought by new digital technologies, the early adopters with experience in the application of these technologies are seizing new opportunities to 354

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disrupt established construction markets. It follows that the accelerating scope of new technologies is challenging the incumbent organisations on multiple fronts. Of course, not all disruptive entrants will be successful, but their number, speed and capacity make for a particularly challenging environment for the executives of incumbent organisations. In summary, the construction industry is ripe for exactly the kind of change needed to facilitate IPD and improve collaboration. The emergence of new digital technologies brings new capabilities and new opportunities to the construction industry, but the conservative majority of incumbent organisations (consciously and subconsciously) tend to block or delay the widespread adoption of these innovations. For the substantive, whole-industry, changes required to drive IPD and radically improve the performance of the construction industry, a particular perspective on technology innovation is required. This chapter proposes disruptive innovation as a specific approach to achieving radical change for good in the construction industry. What might such an approach actually require? We propose a particular framing of disruptive digital-technology innovation around three key phases: sourcing and evaluating; developing and producing; and pitching and piloting. A possible fourth phase that deals with the entrepreneurial and business development aspects of disruptive technology innovation is beyond the scope of this chapter at present.

Phase One: Sourcing and evaluating digital innovations To become an effective innovator requires, first and foremost, thoughtful imagination (Horth and Buchner, 2014). The disruptive innovator needs to recognise the commercial potential of a new technology to deliver an effective new service or product to the low end of the market. Thoughtful imagination needs to be informed through relevant, direct experience in the application and development of digital technologies. Sourcing information and feeding the imagination needs to extend across a raft of research initiatives. For example: ••

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Academic research: a systematic review of the academic literature may be appropriate in certain circumstances. However, the rapid development of new digital technologies tends to outpace traditional academic publishing, and access to academic publications is generally problematic for non-academics. Far from offering a comprehensive literature search, there is of course the Google Scholar search engine which does provide a rudimentary search of scholarly literature across many disciplines and sources (URL https://scholar.google.com). More specific to the construction industry is the searchable database of constructionmanagement research publications managed by the Association of Researchers in Construction Management (ARCOM) (www.arcom.ac.uk/abstracts-search.php). Creative thinking: disruptive innovation is not necessarily seeking some unique technological invention. Rather, it draws on initiatives from other contexts and reappropriates new ideas. Many inspiring concepts and ideas are presented in a readily digestible form through the now 2,900-plus TED Talks (www.ted.com/talks). TED is a clearinghouse of free knowledge presentations from the world’s most inspired thinkers. In addition to accessing great ideas, access to innovative technology applications can also seed new possibilities in construction. For example, KickStarter (www.kickstarter.com) has successfully connected over 150,000 project initiatives with the resources and support needed to turn the ideas into projects. A regular search of one or more of the many crowdfunding websites provides excellent exposure to how other creative thinkers are looking to develop their innovations. Along with proposed project ideas, a review of recently launched project 355

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initiatives can also be really helpful in identifying potential applications in construction. For example, the novel features and functions of recent game and resources launched on the Oculus Store (www.oculus.com/experiences/gear-vr) can provide specific inspiration for virtual-reality applications in construction. Technology newsletters: the pace of change in digital technology is accelerating. Staying abreast of the latest developments is a daunting task. A number of online resources now cater to the growing community with an interest in digital innovation. There are regular newsletters on digital-technology innovation in general, with the likes of TechCrunch (URL https://techcrunch.com). Other online feeds are more specific to digital innovation in the construction industry, such as JB Knowledge (URL https:// jbknowledge.com). There is also a growing support community specific to particular technologies applied to the construction industry, where we find the likes of BIM+, a broad-based construction technology newsletter initiative by the Chartered Institute of Building (www.bimplus.co.uk). Technology reports: a more in-depth complement to the technology newsletters are the technology reports. These are now produced by dedicated technology analysts, such as Frost and Sullivan (URL https://store.frost.com) on behalf of construction industry bodies and government agencies by insight consultants, such as Ernst and Young (www. ey.com/en_gl); and through reports and commentary by the larger construction industry organisations, for example, Arup (/www.arup.com). Each of these and their equivalent organisations are excellent resources for contemporary commentary on emerging digitaltechnology innovations.

There seems to be no end to the information available on digital-technology innovation but, as previously indicated, technology commentaries can tend to blue-sky their predictions. Future perspectives have their place, but disruption requires more immediate action and first steps. The initial focus needs to be on what is technically possible, currently. For this reason, effective evaluation of any new digital technology as a disruptive innovation really requires direct experience in the use of the technology. Ideally, this would be direct personal experience, but an acceptable alternative is the experience gained from a balanced and well-documented case study. Find case studies of how the technology is actually being used and applied. Having experienced the technology (personally or vicariously), the aim is always to describe that technology in functional terms. In this situation, the functions are expressed in the context of a specific product experience and/or product-use case. The future perspective then comes from an examination of the current functional capabilities as affordances. Affordances provide the clues to how a new technology could be used in the future in a more generic sense (Norman, 1999). This generic sense is how specific current applications are transformed into specific future applications of known/extant functionality. A final development of the technology evaluation, following on from the examination of affordances, is to highlight their potential value in a business context. What might the particular advantages or opportunities be that could arise, should the functional affordances offered by the technology be applied to a current market dynamic? This is a more projective and creative exercise than the precursor-sourcing and evaluation steps. However, the rawness of much emerging technology does open an encouragingly broad compass of potential advantages and opportunities to explore. In summary, the critical factors to consider in the sourcing and evaluation of a digital technology in disruptive terms should include:

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1 How mature is the technology? How does the promise and hype compare with what is actually possible and available to users today? How well might the technology transfer from its current business application to the proposed application? These questions revolve around establishing the key affordances provided by the technology as it is presently implemented. 2 How mature is the market? Is this an established market or a new market? If established, is it ripe for disruption? Is it a niche market or a whole-of-business solution? Does it offer a different, low-end or high-end business model? These questions focus attention on the relevance of the market to the proposed technology intervention. 3 How competitive is the innovation domain? Are there business barriers to entry? Are there market barriers that preference the incumbents? Where are we on the Innovation Adoption Curve? These questions ensure that the timing of the intervention is appropriate to the maturity of the innovation domain. 4 How well positioned are you to succeed? How readily available are the talent and skills required? To what extent does the innovation require broader policy or legislative change? How aware and willing to invest in this technology are the industry stakeholders? These questions focus on the capacity of the organisation to drive the technological intervention. Explicit data on all of these factors is unlikely to be at hand, but the questions are to be taken more as thought prompts – a check box of factors to consider when evaluating the disruptive potential of the technology innovation.

Phase Two: Technical and production considerations Direct experience in the use of a technology is one thing. Understanding and appreciating the development requirements of a technology is quite another. Where the use case can provide pointers and inform the imaginative evaluation of the disruptive potential of a technology, it is the technical and production considerations that, as often as not, create the primary barriers to digital-technology application (Ramilo and Embi, 2014). Having sourced and evaluated a potential technology, the next phase is to develop and produce a prototype for testing and trialling in practice. While there is no especial need to develop and produce the application in-house, and most likely the resources required will not be available in-house, nevertheless understanding the production requirements is essential to commissioning any prototype system. Every emerging digital technology will have its own technical and production requirements. By way of illustration, this chapter will review the resource requirements for development of a virtual-reality application. The aim is to demonstrate those aspects of digital production common across digital technologies, as well as to better illustrate both the challenges and possibilities for those new to digital-technology production. The theme of this chapter is that a great deal can be achieved in-house using consumer-level products and services versus large-scale and bespoke third-party developments. More especially, there is much of significance to be learned from experimenting and playing with technology options. New approaches to technology development are emerging as the days of prescriptive technology development quickly make way for an entirely more agile approach to digital-technology development in particular (Moran, 2015). Traditional development approaches follow a socalled waterfall of cascading specifications, where the key requirements of a problem are first matched to particular features of a technology in an explicit product specification. That specification then drives a clear sequence of module developments for each component or feature of the final product, which the developer then implements and tests. There is typically an extended

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period of development from specification to implementation where the client has limited input. New methods of agile technology development, such as Scrum and Kanban (see Chapter 17 for more detailed discussion on agile and lean concepts) are being developed and honed, where the traditional linear process is replaced with a more iterative, short-burst development process. In an agile development, each cycle results in something of an overall prototype as opposed to a module-by-module progressive build. This approach lends itself to better collaboration and greater, more frequent engagement between the developer and the client. Since clients rarely know in advance exactly what they might specify, and developers can rarely predict exactly how a system will perform in practice, the iterative prototyping method is especially well suited to emerging digital-technology development. In the context of virtual-reality development, for example, there are particular technical and process resource considerations. Let us begin with a review of the key technical components: ••

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Delivery technology: virtual reality refers to quite a range of technical devices, from generic options, such as so-called caves (where the user is surrounded by projected images) and headsets (where the user views a single image that changes in response to head movements), to bespoke simulators of particular plant and equipment (much like a flight training simulator). These are all immersive methods, where the aim is to convince the user that they are actually experiencing what is in fact a virtual simulation. The consumer-level products to be preferred in this regard are the virtual-reality headsets. This product family has developed significantly over recent years, precipitated by the entry of major technology developers such as Google, Facebook, Apple, Sony and Samsung. What began as a quantum leap forward with consumer-level devices such as the Oculus Rift (www.oculus.com/rift) and HTC Vive (www.vive.com/us/product/vive-virtualreality-system) – supporting extensive movement and interaction but tethered by cables to high-end graphics computers and motion tracking – is evolving into more stand-alone devices such as the Oculus Quest (www.oculus.com/quest) and the Vive Focus (www. vive.com/cn/product/vive-focus-en). Stand-alone headsets are not encumbered by cables and the restricted movement control is actually a welcome limitation as, in combination with higher resolution screens, it helps avoid the motion sickness that some users suffer initially with motion-tracking devices. Of course, one of the key advantages of the stand-alone consumer device is price point. For the cost of an Oculus Rift and associated laptop you can purchase around ten times the number of stand-alone headsets. The stand-alone headset is also more robust, far easier to transport (to a site or another office location, for example), and much, much simpler to set up and use. Simulation software: the major consumer technology developers continue to invest heavily in making virtual reality something for everyone. While the investment in simulation software development is a fraction of that pouring into virtual-reality hardware, content remains king. Having an in-house capacity to develop and trial virtual-reality simulations is a significant opportunity for the innovative enterprise to engage with and evaluate emerging digital technology. The top-end authoring software packages for virtual-reality applications are the interactive video game engines that offer total access to the latest and most sophisticated modelling and rendering engines available. The leading video-game-engine platforms include Unity (URL https://unity3d.com), CryEngine (www.cryengine.com), and Unreal Engine (www.unrealengine.com). A recent change in the business models for such engines has opened access to these state-of-the-art technologies for no or minimal cost. 358

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Of course, specialist expertise in programming and compiling is required to produce virtual simulations using the game engines. The more adventurous and higher-quality productions demand significant expertise. On the other hand, if a rudimentary or particular virtual experience is required, dedicated software, such as Revizto (URL https://revizto.com) and Lumion (URL https:// lumion.com) is available to translate digital models directly into virtual-reality content. Advanced geometric modelling software (such as Revit (www.autodesk.com/products/ revit) and AutoCAD (www.autodesk.com/products/autocad) is also offering direct export into reasonable virtual-reality content. The majority of direct export/translation content is currently only really of use in visualisation, but there is no doubt that interactivity and other important functionality required for full-scale virtual-reality experiences will increasingly be available out of the box. Other functionality: the visual experience has driven recent technology development, but other aspects of haptic, aural, movement and olfactory sensations also play a significant role in the immersive experience of a virtual simulation. For example, recent binaural spatial sound technologies (such as ambisonics) are now able to reproduce location-based soundscapes using stereo audio delivery that maps onto a 360-degree surround environment and sync the sound location with head movements. That is to say, stereo audio is able to make the source of a sound appear to be coming from any specified position in three-dimensional space relative to the moving head position of a user, in real time (www.ambisonic.net). One recent development related to simulation software is the availability of high-quality 360-degree video cameras. These cameras, such as the Insta 360 Pro (www.insta360.com) are able to video fully immersive virtual-reality experiences in high resolution with spatial sound recording which can later be played back using virtual-reality headsets. Equivalent green-screening and post-production processing is being developed for 360 video, as is currently available for traditional video, meaning that live-action video can be post-produced to create highly tailored virtual-reality content. In a similar vein to 360-video capture, developments in LiDAR and photogrammetry are also offering new opportunities to generate virtual-reality experiences of environments and situations. LiDAR systems, such as Faro (www.faro.com) and Leica Geosystems (URL https://leica-geosystems.com) use laser scanning and photography to generate high-resolution point clouds that represent the geometric location and colour of all points visible from a particular point of view. In addition to key technical components, there are a range of issues to consider in terms of the production workflow process for any virtual-reality application. Geometry: creating entirely virtual worlds will always require geometric modelling and rendering capability. Advanced video game engines all have on-board geometric modelling functionality, but the most effective solution generally requires the geometry to be imported. The workflow for importing geometry will begin with a dedicated geometric modelling solution, such as 3DS Max (www.autodesk.com/products/3ds-max) or AutoCAD (www.autodesk.com/products/autocad). For most applications, the fixed models then need to be articulated and animated, and for this special-purpose animation software, such as MAYA (www.autodesk.com/products/maya), MotionBuilder (www. autodesk.com/products/motionbuilder), or Blender (www.blender.org) is required. For higher-quality rendering solutions, the texturing of geometric models is also important. Typically, generic image processing software, such as Adobe Photoshop (www.adobe. com/photoshop) or GIMP (www.gimp.org) is sufficient, but efficient and high-resolution 359

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texturing requires specialist expertise in and of itself. Complex geometries, including human and other more organic forms, have dedicated geometry and animation software applications of their own, such as MakeHuman (www.makehuman.org) and Mixamo (www.mixamo. com). For the best animation outcomes, motion-capture solutions are important, such as OptiTrack (URL https://optitrack.com) and Rokoko (www.rokoko.com). Object stores: basic model creation and animation is achievable at most skill levels, given the automatic tools available in, especially, high-end geometric software. However, creating effective and efficient models (for rendering and animation purposes) does require advanced and varied skill sets. A growing number of these professional modellers now produce off-the-shelf packs of resources and make them available for purchase on the booming online market-places dedicated to virtual reality. Models such as GrabCAD (URL https://grabcad.com) or 3D Warehouse (URL https://3dwarehouse.sketchup.com); textures such as textures.com (www.textures.com); and entire virtual-reality solutions such as UnrealEngine Marketplace (www.unrealengine.com/marketplace) provide ready-made solutions for a growing range of virtual-reality applications. Production management: the expanding specialist expertise required to produce the highest quality of virtual-reality experience can be daunting. In addition to modelling, rendering and animation, the impact of best quality sound, motion capture, lighting, programming, scripting, post-production, compiling, and the ever-expanding suites of associated specialist roles/software can make the production of a virtual-reality experience as complex and resource intensive as that of a conventional movie production. However, while that may be true for the more ambitious virtual-reality productions, the production management tools incorporated into the best video game engines already enable sophisticated product development for no more investment than an enthusiastic graduate from the many virtual-reality training programs now available.

In summary, the critical factors to consider in the production and prototyping of any emerging digital technology should include: 1 How many digital resources are required? For a virtual-reality simulation, these might include: models, environments, textures, animations, programming, 360 stills and video. 2 What is the timeframe? How much time is there to complete the project? How urgent is it to complete sooner rather than later? What quality and functionality goals are realistic in that timeframe? 3 How much experience does your firm have with digital-technology development? How explicit is the overall project brief and/or project goals? How committed is the company to providing resources (including people, data, site access, etc.) to support the development of the project? Is there a champion for the project at a senior level of the organisation? 4 How mature is the hardware and software that will be used to realise the project? New hardware and software will require a period of upskilling and may also impact the availability of expert developers.

Phase Three: Piloting disruptive innovation in your organisation There are many and varied ways in which to approach a formal evaluation of a digital innovation prototype (Richter and Flückiger, 2014). Notwithstanding the need to undertake a formal evaluation at some point, the greatest imperative by far for a pilot study is to begin. 360

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Any experience in prototyping an emerging technology is useful experience. Given the nature of digital technology, the experience will reveal unanticipated opportunities for the application, the technology will in any event evolve and develop new functionality and possibilities, the organisation will learn something about prototyping digital innovations and the flexibility and change required to respond to digital disruption. New technology initiatives are likely to become the lifeblood of the modern organisation (McKinsey Capital Projects, 2017). The sooner an organisation begins to experiment with and prototype potentially disruptive applications, the better the organisation will be placed to respond to the changes that digital technology will inevitably bring. So, the essence of Phase Three deals with how you might convince the organisation to approve a pilot project. Much has been written about the best ways to win support for an idea (see for example, Fisher et al., 1991). Here we discuss some key ideas for a pitch based on the framework of a three-minute presentation. Any approval will likely require more substantiation than is appropriate to a three-minute pitch, but the pitch is a critical starting point. ••

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Constraints: there are no true rules to a successful pitch, but recognising particular constraints often helps give the structure and design of the presentation some direction. Begin by limiting the presentation to three minutes’ duration and a maximum of three slides/graphics. This constraint can be relaxed later, but as a target it forces the presentation to be both concise (a few key points) and engaging (keep to the points). Outcome: design your presentation, starting with what specifically you want the outcome of the pitch to achieve. Everything should lead to that outcome – the key points, the supporting slides, the structure, even the feel of the presentation; everything is there to serve a purpose and the purpose is your intended outcome. Structure: while you will have a very explicit intended outcome for the presentation, ideally you want the audience to feel that they have come to that conclusion rather than that you have delivered them there. Getting the audience to own the outcome starts with engaging them personally in the pitch. One of the best ways to promote a sense of audience ownership is to tell stories and paint scenarios that the audience will relate to. An emotionally engaging story will persuade far more effectively than statistics, and will make the pitch far more memorable. Style: generally the best style is a conversational form of presentation. Aim for the feel of a friendly chat, albeit generally one-sided. Pauses can help prompt the audience to converse, even subconsciously. If you have the time, ask questions, even if just rhetorical, and listen carefully to the responses. It is rare that you will know in advance exactly what the audience wants to hear about. Equally, do not assume that the audience will know precisely what the purpose of the presentation is. But remember: the pitch is about seduction rather than debate, so try to avoid lengthy discussions. Visual aids: people seem to respond better to images and stories than to data and text. Certainly, do not simply read the text from your slides. The slides are your cues, they are not the presentation. That means you need to rehearse the presentation largely from memory. Key points: be yourself. Engage with the audience. Focus on emotion and meaning over rational proof. Don’t forget the purpose of the presentation is to achieve a particular outcome, and your aim is always to set up the next step you have in mind.

In summary, the critical factors to consider in the development of a pitch that is intended to lead to a pilot implementation should include: 361

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1

Who will care about this project and why? Is there a clear value proposition? How easy is it to monetarise the benefits and opportunities? 2 Where are the opinion leaders in the organisation? Who are most likely to be the early adopters you need to make initial contact with? 3 What is the size of the potential market for your innovative idea? Is there a clearly defined problem that the technology will address? How significant is the problem/challenge/ opportunity? Is it just a local, national or broader international issue? Does the same problem and/or solution have application across different industries? How resistant is your organisation to change? 4 Are you going to be able to progress the innovation directly (as a grass-roots initiative) or will it require a whole-of-industry response/change (and thereby a more top-down approach)? 5 What criteria would be appropriate to measure the potential impact of the technology on the organisation? Strategically, how might the pilot study be evaluated fairly and in a realistic context, given the inevitable limitations of a prototype system? An important point when making a pitch to convince others to embark on any change that may be disruptive is that the outcome must meet the value proposition of those you seek to convince. In the case of IPD, this is a different ‘animal’ to other potential organisations who may consider these disruptive technologies. Most organisations in a traditional setting only consider their specific value proposition and that is generally to increase their profits and/or to gain competitive advantage. Multi-integrated organisations within an IPD context, such as an alliance, usually have a broader agenda and seek not only immediate efficiencies, and perhaps cost or time savings, but also other key result areas such as upskilling, more effective operation of the constructed facility, a safer environment and a number of social-good objectives, in the case of government agencies. Therefore, you can be honest about the potential for teething problems as learning and dynamic capability-building opportunities, as well as being clear about operational or social-good potential advantages. Finally, it is advisable to understand that knowledge is ‘sticky’ and difficult to transfer between groups and people (Szulanski, 1996; 2003). How effectively a team will collaborate and learn is as much a function of their innate individual abilities as it is of how they are managed or behave. Chapter 18 discusses organisational learning and sticky knowledge in depth. The main point to be made here, with respect to IPD, is that the cross-disciplinary nature of the procurement form facilitates greater opportunity for effective innovation being developed and diffused on these projects, and greater chance of effective diffusion across projects in a program. This was the case with the Victorian Level Crossing Removal Program, where the design of the IPD form made the most of the talents and knowledge of project participants. Chapter 2 presents the Collaboration Framework that helps explain why this is the case.

Conclusion Emerging digital technologies are critical to the delivery of many of the developments required to achieve IPD. Notwithstanding such a role, this chapter has proposed a new, more disruptive role. It poses the question: How might the industry, an organisation or a motivated individual most effectively leverage an emerging digital technology to disrupt the extant construction industry and promote fundamental change? The answer, in short, is to begin. Begin to learn about emerging technologies. Become more familiar with the development and production of emerging technologies. Build experience in the application and evaluation of emerging technologies. To a significant extent, the choice of technology is of little consequence in this context. 362

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To experiment is to reveal the practical possibilities and barriers of change, to become familiar with the nature of change, and to develop a capacity for change. Of course, the new constant is change (Epstein, 2018). Where conventional wisdom might claim that the majority is best served by waiting for the dust of change to settle, reality indicates that the dust is unlikely to settle, ever. Equally, when something like IPD demands such fundamental industry-wide change, it can be tempting just to sit back and wait for the tectonic shift to occur. This chapter has sought to highlight the fact that disruptive change is upon us already, in the form of emerging digital technologies that every one of us can begin to experiment with, and that through such experimentation we can free ourselves, our organisation and our industry to the transformational changes required. The disruptive innovation perspective is a ‘me’ perspective. We should not leave emerging digital technologies to others. Consumerism is driving the development of emerging digital technology and the opportunity is there for every individual consumer to be the disruptive innovator that will kick-start the IPD revolution.

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17 IPD FROM A LEAN-SUPPLYCHAIN MANAGEMENT PERSPECTIVE Derek H. T. Walker and Juri Matinheikki

Introduction Various integrated project delivery (IPD) forms have been described in this book (see Chapter 3), one of which was the British Airports Authority (BAA) Terminal Five (T5), agreement which has been evolving across a number of engineering infrastructure mega-projects in the UK. The T5 agreement evolution may be described from a systems-thinking perspective, illustrating how T5 has shaped the IPD landscape in the UK to create an IPD supply-chain management (SCM) approach. Each evolutionary iteration of the IPD concept triggers new contextual implications that have influenced and shaped the trajectory of the integrated project delivery (IPD) concept. Much of this influence has been triggered by the need for highly expert teams of people to collaborate within and across teams and to cope with delivering projects in response to complexity, expectations about delivery speed, changes in governance standards and taking advantage of expectations raised by rapid advances in technology. This chapter takes a LeanConstruction and supply-chain management systems-integration perspective on how project participants can engage relevant stakeholders within the supply chain with a well-integrated single-team approach to project delivery. We look at SCM, Lean construction and how this fits in with logistics management to improve productivity. The previous chapter discussed the building information modelling (BIM) and emerging digital-technology literature that supports IPD projects and the next chapter discusses innovation in IPD and its diffusion as organisational learning within the core IPD project group, as well as across the whole supply chain of an IPD project. This current chapter responds to the following two questions: 1 2

How do IPD projects facilitate engagement and action across the supply chain to effectively realise a project? What are the necessary processes involved? How are these processes enacted in practice?

This chapter is structured as follows. We first discuss the concepts of Lean construction, Agile project management, SCM and logistics. We also explain how Lean principles may be applied in IPD and how SCM processes enact logistics protocols to organise and manage effective 365

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project delivery. We then identify how ‘Agile’ PM concepts relate specifically to IPD projects. Drawing upon the emergent and evolving approaches to SCM, we then illustrate how a Lean IPD approach was adopted on several IPD-like settings, including the Heathrow Terminal Five (T5) project in London. We follow this general approach with two more detailed examples of Lean/Agile/SCM approaches to IPD. We first provide a recent example of how Lean principles have been applied in the Victorian State’s Melbourne Rail Crossing Removal Program (LXRP) in Australia to illustrate current Lean/Agile/SCM practices in an IPD-alliance program. We then follow this with more discussion of an off-site-logistics sophisticated SCM context, integrated into project delivery of the Potsdamer Platz redevelopment in Berlin and how that evolved into a business player in its own right. We end the chapter with conclusions and suggestions for IPD practice.

What do we mean by Lean construction? The concept of Lean production has a long pedigree, beginning with the emergence of approaches to eliminate waste as a part of total quality management (TQM) approaches. These were based on foundations of time and motion studies from early production-engineering practice. Much of the focus was on waste elimination through: de-cluttering the workplace; using only the required quantity of materials and supporting temporary materials; eliminating unnecessary time through just-in-time material and equipment delivery, and optimising travel time between work stations; and the elimination of the procedural and managerial waste of ‘red-tape’ and unnecessary or redundant monitoring and control measures. Koskela (2000) in his PhD thesis provides, arguably, one of the best readily available discussions on the evolution of construction production-engineering thought. He describes its history from the ideas offered by Taylor in studying production efficiency through time and motion study, to concepts of efficiency in terms of what he describes as the ‘transformation-flow-value’ generation (TFV) model of production (Koskela, 2000, p3). He concludes that blindly following production-engineering principles for the sake of production efficiency is insufficient. He points out that construction projects, as opposed to car production, are a bespoke activity. Each project is different and many proponents of production management tools, such as total quality management TQM (Ho, 1995), business process re-engineering (Womack et al., 1990; Womack and Jones, 1994; Hill and Collins, 2000), and 6-Sigma quality control (Imai, 1986; Andersson et al., 2006) are geared towards production-line activities. He recommends that a wider perspective be taken to better understand the interaction of construction peculiarities, the impact of information technologies, and changes in the evolving information and materials processing technology. Vilasini (2014, p62) in her PhD thesis that examines Lean construction applied in a New Zealand project-alliance context provides a very thorough comparison of process-management techniques. It becomes clear that all the techniques she discusses (Lean construction, TQM, Total Productive Maintenance (TPM), Six Sigma, Theory of Constraints, Agile and Business Process Re-engineering (BPR)) are mainly geared towards efficiency and cost-reduction. She includes Lean in her comparative table (Vilasini, 2014, p62) as being distinctive but her focus is on the production meaning of Lean rather than how the concept has evolved in the construction sector. The Lean concept was adapted to the construction industry via its transformation into what was known as concurrent engineering (Evbuomwan and Anumba, 1998) or integrated concurrent engineering (Kunz et al., 1996; Fischer et al., 2017, see p180) in which greater integration and collaboration between design and production was explained as leading to 366

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leaner more efficient design outcomes. This interpretation of Lean also coincided with interest throughout the 1990s with what has been termed buildability or constructability, in which design takes into account how practical a design solution might be through involving the constructor in the design development at an early stage (Chen and McGeorge, 1993/4; Francis and Sidwell, 1996; Sidwell and Mehertns, 1996; McGeorge and Palmer, 2002). In the USA, studies of how design teams and contractors and contractors and subcontractors collaborated through partnership arrangements were undertaken and widely cited (CII, 1996). This expanded the concept of Lean from being purely a production-efficiency process tool, and drew in design for constructability to include the notion of efficiency. The call for collaboration at the early stages of construction design became more commonly termed early construction involvement (ECI) and has been written about by many authorities, with one more comprehensive source being Mosey (2009). Numerous PhDs have subsequently been written about ECI. For a recent example, see Rahmani (2016). Lean construction, as perceived in the USA, moved on from focussing mainly on production (Ballard and Howell, 1997) – something that was criticised for relying on a mechanistic view of efficiency that ignored the human element (Green, 1999). It involved into one more recently focussed on aspects relating to: wider end-user, customer and societal value generation (Salvatierra-Garrido and Pasquire, 2011); greater design and construction team collaboration beyond ECI (Fischer and Drogemuller, 2009); and consideration of how the whole construction-delivery team, collaborating with the design team and an intelligent, sophisticated, engaged owner-representative, can contribute to an effective design that does not ignore how the workforce may use technologies and their own initiative to produce smarter, more effective outcomes (Fischer et al., 2017). The concept of alliancing as it evolved in Australasia, and its success in delivering projects through intense collaboration, precedes the development of the Lean-Construction perspective in the USA (Ashcraft, 2010), as this final element of intense collaboration appears in publications during the mid-first decade of the 21st century (American Institute of Architects – AIA California Council, 2007). The concept of IPD remains as a three-level concept with the alliance-like level being the highest plane of collaboration within IPD project forms in the USA (NASF et al., 2010, piii). The third level of collaboration in the USA form of IPD embraces the idea that deep and meaningful collaboration between the tri-party ‘one-team’ group (NASF et al., 2010) of project owner, design team and construction-delivery team, could deliver not only efficiency and effectiveness but also a means to avoid wasted intellectual and administrative energy in delivering projects by reducing (and perhaps eliminating) disputes between teams. Therefore, the more current ideals of Lean and concurrent engineering are merging with the concept of alliancing and similar collaborative project-delivery forms. For example, in the UK the New Engineering Contract (NEC) form (Gerrard, 2005) and its most recent version, NEC4, released in 2017, provides a preliminary form of contract for making alliances. It is noteworthy that the NEC3/4 Guidance Notes (see the website at URL https://gmhplanning. co.uk/nec-guidance-notes) has many of the comments about clauses, particularly to do with trust accountability and responsibility, etc. that are moving closer to the project-alliance agreements used in Australia and New Zealand. IPD and alliancing therefore introduces a more sophisticated conceptualisation of the meaning of waste to include wasted effort due to a lack of front-end collaborative planning as well as the waste from ignored, or poorly considered, opportunities for value-creation. A further source of waste reduction has been identified by Love as the reduction, if not elimination, of re-work (Love et al., 2000; 2008; 2016a). This work has demonstrated that collaboration and Lean thinking in terms of ECI, as well as improved quality of dialogue between the design and construction team, together with a sophisticated client, can significantly 367

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reduce re-work (for more on this refer to Chapter 18). Occupational health and safety (OHS) improvements were found to occur with this deep level of collaboration in considering the implications of the sequencing of operations and its impact on re-work and OHS. This adds a further dimension to Lean-Construction thinking by reducing re-work and OHS-related waste (Love et al., 2016a). Finally, the impact of sustainability and how built facilities may perform post-completion, or may be required to be reconfigured, has largely been ignored. Fischer et al. (2017, p33) refer to high-performance buildings in which project teams consider the potential waste that may occur over the whole life-cycle of the built asset, for example due to energy-inefficient buildings, poorly functionally designed buildings that do not consider the users of the facility, and how difficult or complex it may be to alter and reconfigure a building. This is a further source of waste that Lean thinking may obviate. We argue, from the literature already cited, that the concept of Lean construction has currently evolved to be described as: 1

2

3

4

5

Having a focus on efficiency, through the use of standard processes developed and evolved from lessons learned to minimise material and labour waste, reduce transport waste through improved production flow, and reducing re-work and accident-related waste. Having a focus on effectiveness, through collaboration between those who know: what they want (a sophisticated, knowledgeable and engaged client), how to design what is possible (a sophisticated and engaged design team) and how to construct and deliver what is possible (a sophisticated and engaged construction-delivery team). Having a focus on sustainable solutions to challenges presented through the project design and delivery phases (thinking about whole-of-life considerations and potential reconfiguration of facilities during the later stages of delivery or during the post-occupancy stage). Having a focus on relationship quality within and across teams, by structuring governance arrangements to avoid management- and administration-effort waste occurring due to dispute resolution and the associated preparatory and defensive actions draining energy away from more productive applications of the various teams’ focus and concentration. Having a focus on working smarter, through embodying continuous improvement, innovation and reflecting on the current context to apply lessons learned.

A systematic analysis of how Lean thinking has evolved reveals that these five elements significantly move Lean-Construction thinking towards IPD, particularly alliancing. However, an important point made in a recent paper (Young et al., 2016, p40) identifies a significant gap in the way that Lean and IPD are currently positioned, with their observation that ‘A key difference between PA [project alliancing] and Lean construction appears in the operating system. Alliancing lacks the workplace standardisation and the use of Lean-Construction tools identified with Lean construction.’ Young et al. (2016, p40) call for further research to investigate the degree to which Lean construction is considered in alliancing. Vilasini, in her research work in New Zealand, has demonstrated that LeanConstruction approaches have been applied in New Zealand alliance projects (Vilasini et al., 2011; 2012 Vilasini and Neitzert, 2012; Vilasini, 2014). In a later section of this chapter we will also report on an Australian program of projects in which Lean-construction approaches are used.

Agile project management According to Sanchez and Nagi (2001), people may perceive Agile and Lean as interchangeable terms because both are concerned with efficiency and effective production of a 368

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product. However, they are quite different. Sanchez and Nagi (2001) go on to elaborate, based upon a rigorous review of 73 high-ranking peer-reviewed journal articles, to explain the difference between Agile and Lean: Lean manufacturing is a response to competitive pressures with limited resources. Agile manufacturing, on the other hand, is a response to complexity brought about by constant change. Lean is a collection of operational techniques focussed on productive use of resources. Agility is an overall strategy focussed on thriving in an unpredictable environment. Focussing on the individual customer, Agile competition has evolved from the unilateral producer-centred customer-responsive companies inspired by the Lean manufacturing refinement of mass production to interactive producer-customer relationships (Goldman et al., 1994). In a similar sense, some researchers contrast flexible manufacturing systems (FMS) and agile manufacturing systems (AMS) according to the type of adaptation: FMS is reactive adaptation, while AMS is proactive adaptation. (Sanchez and Nagi, 2001, p3,562) While this quote refers to manufacturing and not project management or even IPD, it still has relevance in clarifying two concepts that IPD often deploys. Sanchez and Nagi refer to Agile enterprises that access and integrate the resources of a range of organisations through what they term ‘relationships’ and ‘cooperation’: collaboration is the term for this concept used throughout this book. An interesting insight they offer about the Agile concept is that it is a state of mind and not a set of techniques. We explore how Agile concepts may be relevant to IPD alliancing by taking this perspective, bearing in mind that Sanchez’s and Nagi’s view of Agile is dependent upon being both efficient and effective (that is ‘Lean’) through actions taken using suitable techniques at hand. We have already discussed Lean concepts and how they are applied in IPD and alliancing contexts. It is now relevant to outline some of the key characteristics and elements of Agile to understand how they may be connected to both Lean and IPD-alliancing situations. The link between Agile and Lean was explored by Owen et al. (2006) arguing that Agile organisations are structured as quickly adapting entities that have the flexibility and resilience to respond to challenges by seizing opportunities to realise value from a situation. This may be done by proactively reacting to a risk and, perhaps, in doing so discovering more effective solutions, or by purposefully seeking value-generating situations. They observe that Lean and Agile appear to share some common ground in that the Lean ‘last-planner’ approach (Ballard, 1994; 2000) requires some application of Agile approaches, such as team meetings to identify tasks to be undertaken over a short horizon and focussing deeply on these tasks and how they fit into an activity. The last-planner ‘big room’ meetings described by Ballard in Lean workshops are very similar to what is termed in Agile literature as ‘Scrum’ and ‘Sprint.’ It should be noted that both Lean and Agile are not a substitute for planning. To be Agile requires rapid response to situations by having a clear overall end point in mind but to be willing to enact several plans that have been considered at a macro-level, perhaps, but also often at a meso- or micro-level: Plan A, B, C etc. Agile is about versatility but also a capability to have several potentially viable solutions to challenges in reserve (Cobb, 2011). It is therefore essential to understand the context of each reserve ‘plan’ so that the most fitting can be seized upon. Lean is associated with more detailed planning and preparation, with an assumption that ‘the plan’ will be carried out as close to when it needs to be instigated but with full knowledge of resource needs, context constraints and available resources (Ballard, 1994). It is clear, therefore, that both Lean and Agile require in-depth insight and knowledge as well as disciplined rigorous cognitive ability and energy. 369

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Much of the core Agile parlance is derived from the game of rugby (Highsmith, 2004). In rugby, one type of event that happens is when the team line up for a scrum to re-start play. The two teams face each other and lock together bending over to push their opposition team forward. The ball is thrown into the middle of the scrum through the border between the two engaged teams and the teams try to capture the ball and roll it back to a player who then picks it up and passes it to other members of their team who stand, prepared to advance, in a line. The ball may be passed left or right to those in the line at each side of the scrum and the idea is to get the ball to a team member who then tries to sprint with the ball into the opposition’s occupied territory and ultimately to score a try (goal). One connection between Agile and rugby is the scrum which is a focussed activity whose aim is to gain territory to score the goal. This is facilitated through a series of sprints. Information technology (IT) projects, where this concept was first applied, are all about getting to the goal (delivering the IT product) through a series of sprints (highly intensive work activities) facilitated by scrums (highly effective meetings by experts to provide the resources and knowledge to set up the sprints). Sohi et al. (2016) details how scrum activities (called ‘sprints’) occur in infrastructure projects in the Netherlands, where a self-organising team of cross-disciplinary teams that are required to provide knowledge input (e.g. the owner’s representative, a design group and delivery group) to collaborate and work out in detail exactly what resources are required and how to deliver various discrete construction activities. They described how a scrum event is structured, with three distinct roles being taken by participants. There is a Product-owner team responsible for adding value to the product in a way that satisfies the customer requirement and manages the identified backlog of tasks. The Delivery Team comprises people whose role is to deliver the product within the sprint period. There is also a ‘scrum master’ who orchestrates the sprint (Sohi et al., 2016, p12). Sprints are small and short time-constrained cycles of activity undertaken by self-organised teams (Mohsin and Shagufta, 2018, p3). The aforementioned focus on value-adding to achieve the customer requirements is in the core of Agile project management. Scrums are concerned with a focus on value generation for the customer based on their requirements. In IT terms, this is usually about functionality and speed to market, in order to gain or maintain competitive advantage. In infrastructure projects, according to (Sohi et al., 2016, p12), this appears to be about delivering the specified project elements but, in IPD-alliance projects, that specification may shift considerably when the alliance owner-participant (OP) is involved with non-owner-participants (NOPs) to consider opportunities for changes in materials, scope or delivery methods in order to meet the project goal more effectively. Sprints become the ‘big room’ and other meetings are often undertaken on-site to progress the works. They may also be considered to be the workshops undertaken in alliancing when developing the target outturn cost (TOC) plan that includes time plans and work methods and approaches (see Chapter 27). Agile, within the IPD-alliancing context, uses a number of Lean approaches that are supported by the Agile mindset. These include the ‘big room’ where the OP and NOP team participants exchange ideas when planning the next ‘sprint’ or set of activities. In Australia the alliances all have ‘toolbox meetings’ where the next day’s work is discussed and planned in detail and progress on the current day is reviewed. Alliance leadership team (ALT) and alliance management team (AMT) meetings also have some element of ‘sprint’ in them, with their focus on best-for-project value delivery. Agile approaches can therefore be seen to be a mindset or philosophical stance that bears great similarity to IPD alliancing in that it assumes:

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•• •• •• ••

Integration of key players (OP and design, delivery and operational NOPs). Focussing on value, particularly being smart and clever at seizing opportunities to achieve the stable and set project output through being open and available to tactically change the means to achieve this when opportunities arise. Being proactive in seeking superior value generation approaches. Having a culture that is flexible, with low power-distance and low information and knowledge asymmetry.

SCM and lean thinking Vrijhoef and Koskela (2000) trace SCM to the roots of Lean manufacturing through TQM and just-in-time techniques adopted by Toyota in automotive manufacturing. Its advantages were said to include reductions in cost (storage, holding and transaction costs) and lead time, as well as improved quality assurance, but they note that the construction industry has several important differences to car production that constrain SCM benefits from accruing in the construction sector. They contrast a traditional construction TFV model of production (Koskela, 2000, p3), being mainly concerned with getting materials and suppliers to the site, and understanding the process from the transformation perspective with that of a SCM flow view. They add that: ‘The transformation view suggests an independent control of each stage of production, whereas SCM is primarily based on a flow view of production, the flow view suggests a focus on the control of the total flow of production . . .’(Vrijhoef and Koskela, 2000, p171). This means that the context of SCM in construction must be considered and be adapted to for its application to be of any tangible use. Vrijhoef and Koskela argue that the construction industry supply chain brings their products and services deliveries, ultimately, to the site. Furthermore, each construction project has its peculiarities due to fragmented customised design and construction as well as a combination of outsourced and contractor-delivered elements. Their paper identifies the following four roles of SCM in the context of construction projects (Vrijhoef and Koskela, 2000, p172): •• •• •• ••

Role 1: Improving the interface between site activities and the supply chain. Role 2: Improving the supply chain, aiming at the development of specific supply chains, such as prefabricated concrete elements. Role 3: Transferring activities from the site to the supply chain. Transferring on-site activities off-site. Industrialisation, especially prefabrication, can be regarded as a structural means for eliminating on-site activities from the total production chain. Role 4: Integration of site and supply chain.

Can Lean thinking and SCM be effectively pursued within the construction industry, if it is modelled upon manufacturing cars, for example? The literature, as expected, provides mixed views. On the negative side, Cox and Ireland (2006), just over a decade ago, remained sceptical. They argue that differing motivations and value propositions of those within the supply chain exist compared to those of the construction asset owner. They also share reservations about the ability of parties to be transparent and genuinely share values for a ‘best-for-project’ outcome because each organisation assumes a fiduciary duty to maximise profit and advantage through contractual and governance means. This forces supply-chain parties to behave in the contractually prescribed way. This reservation holds the key to how their feared situation may be transformed into one of true collaboration. Much literature on IPD cited in this book,

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especially relating to alliancing, points to the governance and motivational concerns expressed by Cox and Ireland (2006). It stresses the governance and contractual agreement being centred on a best-for-project outcome. This collaborative-oriented context may provide a key to transforming SCM within an IPD construction context. Fischer et al. (2017), in their book on IPD, stress the importance of systems integration between first-tier subcontractors, with the main contractor in the IPD arrangement. It appears that in the USA the supply chain is more aggregated than is generally found in Australia or the UK, for example. Fischer et al. (2017, see Section 7.4.3 pp126–141) in one illustration of collaboration to develop a modular common-services rack, make it clear from their description of the Temecula Valley Hospital project case study that heating, ventilation and air-conditioning trades are highly integrated as a first-tier mechanical engineering contractor, often with plumbing and fire services included within their bundled offerings. Additionally, the drywall work was included within other general contracting works cited in that case study (Fischer et al., 2017, see pp174–176). A further explanation of how such an integrated group uses building information modelling (BIM) to model the interfaces of drywall with services within an integrated common-services rack may be found at www.dpr.com/assets/docs/technical-papers/2010-drywall-modeling.pdf (Casale, 2010). These illustrations demonstrate that coordinating the supply chain into more cohesive groups of trades within a major upper-tier subcontractor arrangement facilitates more closely aligned goals, improved communication, collaboration between trades, and organisation capacity to implement both Lean and more Agile approaches to project delivery. The enhanced SCM approach evident in projects such as Heathrow T5, Crossrail and the Thames Tideway Tunnel project exhibits strong SCM. Each of these projects closely controls access to tendering for work through its web portal and back-office activities to ensure that eligible supply-chain members have the requisite skills, knowledge, attributes and experience to support collaboration. Furthermore, the client, British Airport Authority (BAA), encouraged collaborating parties to engage in off-site prefabrication of many components, partly because of logistics concerns for the functioning, busy and congested airport, but also because of security concerns because the airport has many restricted zones (Doherty, 2008, p108–109). In a recent book, Arroyo and Grisham (2017) discuss a number of extremely complex projects in remote and hostile locations, from a stakeholder-relations, implied political-interference, ethics- and logistics-perspective that is relevant to this book’s chapter. In their chapters on a Brazilian mining infrastructure project (2017, Chapter 3) and another spanning Chile and Argentina (2017, Chapter 2) the critical issue of logistics and how materials may be transported becomes acutely apparent. Their argument is that on highly socially, politically and geographically complex projects it is vital to engage in high levels of collaboration with local transport logistic organisations that hold critical tacit local knowledge, and to collaborate with local stakeholders. Their book is rich in detailed case studies from the Americas as well as Africa and Artic North America. Each case study presents valuable insights about how transport logistics is often under-considered and where assumptions made in corporate head offices in major cities about exactly how transport logistics may be managed were lacking in rigour and substance. This aspect of SCM is not just confined to remote locations but also for city-based infrastructure projects. The SCM considerations are often a critical part of any construction or engineering infrastructure project. Extensions to the Hong Kong Metro system, and indeed the original network development from decades ago, required robust consideration of what to do with excavated materials and how to extract, treat and transport the hundreds of thousands of cubic metres of waste rock and earth. In this case, excavated materials from tunnel-boring machines and build-excavation for stations and other underground facilitates necessitated a transport logistics network in the form of a 372

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conveyor-belt network with materials sorting, storage and disposal depots (Sonnenschein, 2012). It was neither viable nor feasible to transport materials by truck on the busy, congested Hong Kong road system. All major infrastructure projects involve acute transport logistics challenges for soil and rock disposal and delivery of bulk materials such as concrete, for example. The IPD governance system, such as alliancing, and the top-level USA form of IPD, are generally designed to ensure collaboration, transparency and mutual accountability based on a best-for-project outcome. This focusses SCM activities on being both efficient and effective. Production assumptions may be challenged and investigated by supply-chain members to develop innovative, smart and effective design solutions. In each example cited above we see how Lean thinking and SCM, including transport logistics, are deployed to minimise waste in its broadest context. We see that Lean thinking and SCM lessons from other industry sectors can be integrated into IPD but that the peculiarity of construction and the temporal nature of project work need to be carefully considered and allowed for.

Three significant features of SCM and Lean The aforementioned examples, among many others, show that SCM and Lean can be compatible because their role fulfils both efficiency and effectiveness objectives as follows. We focus on three significant SCM and Lean features. First, the SCM approach seeks engagement of suppliers to form cohesive tiered entities, such as integrated mechanical engineering, fire protection, plumbing services and either a separate or integrated electrical, security and electronic tiered-service entity. When a further first-tier entity contains such trade work as plastering and drywall, partitioning systems, ceiling systems, fenestration and doors, etc. greater collaboration is possible to design more effective building spaces. Fischer et al. (2017) provide numerous real-life examples of SCM on hospital projects in the USA. Other examples for building projects are also provided by Walker, Hampson and Ashton (2003, pp249–254) on the National Museum of Australia Alliance. In the infrastructure engineering sector in Australia, other examples of similar integration of services and civil works are evident. For instance, in fitting out a road tunnel project as an alliance embedded within a public–private partnership-delivered project (Walker and Jacobsson, 2014). These examples illustrate how Lean principles for ensuring efficient production with minimum waste of materials, time, intellectual effort and creativity are achieved in IPD linked to SCM flow considerations. Second, using SCM to better integrate off-site manufacture where Lean techniques can be used effectively in factory conditions. The possibility of such enhanced prefabrication has been a feature of IPD as discussed in Fischer et al. (2017) as well as in New Zealand alliance projects (Vilasini et al., 2011; 2012; Vilasini and Neitzert, 2012; Vilasini, 2014). In Australia, Lean and SCM is observed on several rail crossing removal projects within the LXRP in Victoria. One such illustration is the YouTube video, at www.youtube.com/watch?v=Ed-wKb-O3gs. Another video may be found on www.youtube.com/watch?v=THDEY9kGwt4 and there are numerous others for this program of projects. The use of time-lapse photography in a video can also help convey how, for example, the North McKinnon rail work project was achieved in 37 days of 24/7 activity: www.youtube.com/watch?v=49TjGxa80Iw and for a drone video, see www.youtube.com/ watch?v=dPrKZ_kwPvs. According to a media release1 from the Victorian Minister for Public Transport issued on August 1st 2016, ‘In just over five weeks, more than 1,000 people worked around the clock excavating 250,000 cubic metres of soil.’ This was a major SCM logistical exercise involving a tightly coordinated supply chain for the excavation and disposal of soil, as well as associated civil engineering works. These videos demonstrate how assemble and erection standard techniques were adopted after detailed planning with off-site fabrication of the structural elements. 373

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Third, SCM implies a more strategic approach to project procurement than merely procuring resources in traditional ad hoc construction-delivery approaches, such as design-bid-build or even design and construct (Cox and Ireland, 2006). SCM involves, according to Cox and Ireland, being proactive in dealings with the whole supply chain as ‘a process through which the buyer works on a continuous and proactive basis with all supply-chain players to transform the current trade-off between product or service functionality, and the overall cost of ownership’ (p400). SCM includes consideration, in an IPD context, of not only the relationship between supply parties in a flow of how materials and services are delivered as well as what is delivered. The supply chain interacts with designers and clients (and sometimes also the end users) in a high-level IPD setting, to clarify their value propositions in terms of a best-for-project outcome to monitor and review the goal that best value is achieved. A key aspect of Lean thinking and SCM in IPD, as discussed above, is that IPD’s systemic approach to collaboration, with its behavioural requirements of transparency and openness to share vital information and knowledge, combined with governance accountability arrangements based on the project outcome (see Chapters 2 and 17), shapes the extent of a ‘one-team’ mindset. This mindset obviates problems posed by traditional supply-chain team interactions identified by Cox (1999; 2014) where information or market power dominates the extent to which collaboration may occur. Having now discussed the links between SCM, Agile, Lean and IPD from a theoretical perspective, we now explore and explain two case studies of collaborative working within parts of a supply chain, from a practice perspective. These help us understand how collaboration in an SCM may be achieved, based upon two practical examples. These case studies were chosen to expose the contextual richness that helps explain how both integration and collaboration took place within the relevant parts of the project supply chain and how this had a positive impact on the project outcome.

Case study 1 - the Level Crossing Removal Program (LXRP) in Australia In this section we discuss and analyse a current case study of a program of projects using alliancing as an IPD form where Lean thinking plays a pivotal role in how collaboration is enacted in practice. We focus on part of the LXRP project Alliance Package 1 and, more specifically, on the remarkable 37-day shutdown part of that package to undertake works to lower the rail-grade level beneath a busy road in three level crossings in Southern Melbourne. This 37-day sub-project exhibits detailed project front-end planning and highly effective supplychain management. LXRP is a program of work to remove 50 level crossings, to refurbish and redevelop stations, with at least 20 of these to be completed by 2018. Rail-road grade separations include cut and fill to permit rail track to pass underneath existing road grade as well as ‘skyrail’ structures to build rail sections above roads. The rationale for the project is primarily based on 50 existing rail crossings having being identified as dangerous and highly congested, resulting in severe delays to both train schedules and road-traffic flow. The program is also strategic in that it links to a new Melbourne Metro Rail Project and new line works to improve total rail network performance. Existing rail stations at these rail crossing intersections are old, tired and in dire need of redevelopment. The redevelopment of stations and easing of congestion in affected areas has also resulted in development and social amenity value-adding opportunities (Victorian State Government, 2017). The LXRP has been structured as a series of 11 individual alliance packages (i.e. alliance projects in their own right) that are integrated into a single program of work that is designed to deliver the 50 rail crossing removals, the first 20 374

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having started with the Package 1 award in 2015 (Victorian State Government, 2017, p265) and to be completed by mid-2018 (Victorian Auditor-General’s Office, 2017, p58), with the remaining 30 level crossings to be removed by 2022 (Victorian State Government, 2017, p15). In 2015, to organise this major alliance program consisting of multiple alliance projects (referred to as packages or project alliances), the Victorian government set up a separate Level Crossing Removal Authority (LXRA) under the Department of Economic Development, Jobs, Transport and Resources to oversee the procurement of the multiple packages and to participate as an active alliance member, representing the whole program-buyer’s side. However, the story of level crossing removals travels further into the past2 and the first contemporary projects, referred as packages 1–4, were initiated by the Victorian road authority, VicRoads, from 2014 onwards. Package 1, consisting the removal of four level crossings (Burke Road, North Road, Centre Road and MacKinnon road) and rebuilding the stations, garnered special praise for its innovative organisation and by beating the original schedule by six months. This first package acted as a ‘vanguard project’ (Brady and Davis, 2004), setting the benchmark and momentum for following packages. Package 1 was therefore an important source of organisational learning not just for VicRoads but, more importantly, to the later-formed LXRA and the industry as a whole. This is one reason why we have referred to the case throughout this book and will next explore Package 1 from the Lean and SCM perspectives. To do so, we first provide the reader with a detailed narrative of how Package 1 came to exist and how it evolved.

Storyline of LXRP Package 1 After the Victorian state elections in late 2014, the newly elected Labor Government set out to fulfil its election promise to improve public transportation flow and safety, as well as decrease traffic congestion by removing 20 level crossings during the four-year electoral cycle and 30 more during the next four years. Already, during the previous electoral cycle and under Liberal government, VicRoads released a report defining the 50 most dangerous level crossings and the Victorian government authorised VicRoads to begin preparing procurement to remove the first four level crossings known as Burke Road, North Road, Main Road, and Blackburn Road. In early 2015, the newly elected Labor Government wanted to proceed quickly and requested VicRoads to initiate procurement process to remove ten level crossings, which were divided into packages 1–4. VicRoads joined forces with Public Transport Victoria (PTV)3, overseeing the rail network in the state of Victoria, and Metro Trains Melbourne (Metro), a private operator of the suburban railway network, in order to quickly initiate the works. After some pre-planning, the buyer consortium decided to merge the North Road level crossings (already under pre-design) with Centre Road and McKinnon Road level crossing because they all belonged to the same Frankston train line, one of the busiest in Metropolitan Melbourne, running through built-up areas for its entire length. In addition to the removal of these three consequent level crossings, Package 1 included rebuilding the stations as well as building a completely new Bentleigh Station building next to the Centre Road crossing. The design choice for all three level crossing removals was to lower the rail line into a trench underpassing the bridged road. Furthermore, VicRoads decided to include the removal of the already planned Burke Road level crossing in Glen Iris, on a separate Glen Waverley train line, in Package 1. However, due to its distant location to the three other crossings, Burke Road acted as its own independent sub-project within Package 1. After setting the agenda for Package 1, VicRoads went out to the market to set up the alliance through a competitive dual-target outturn cost (TOC) bidding process (see Chapter 27 for details 375

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about the TOC-development process). After careful assessment of the TOCs developed by two competing consortiums, John Holland and KBR consortium was awarded the contract in May 2015, mainly due to their innovative design. The TOC for the Package 1 was set as AU$560 million. Besides the TOC, other project objectives included improving safety and efficiency of public transportation as well as increasing value for the local communities by improving the traffic flow and business opportunities around the newly rebuilt stations. These objectives were then governed through four distinct key result areas (KRAs): project schedule, safety during implementation, meeting the TOC, and quality of urban design. After the alliance formation, a rigorous pre-planning period began in order to implement the greatest shutdown in the Melbourne train network in 30 years. This planning may be seen as consistent with managing the supply chain of activities for the 37 days. During the detailed pre-planning period, the complex scale of the project became evident. Removing the three consequent level crossings of North Road, Centre Road, and McKinnon Road would require first the excavation of 250,000 cubic metres of dirt4 followed by pouring 12,000 cubic metres of concrete for the bottom slab to support the railway and to-be-built station structures. In addition, the car traffic ought to be directed to bridges built over the trenches. This all needed to be done with as little disruption to railway operations as possible, since the Frankston line served several thousands of passengers weekly, who had to spend an extra hour commuting during the disruption. To minimise the effect of such disruption, a general guideline in infrastructure works was to implement works during the Southern Hemisphere summer holiday period in January, when there would be less traffic. Unfortunately, since the planning was initiated in June 2015, it was already impossible to undertake the full occupation in January 2016 due to the massive planning and pre-works required. This meant that the implementation could occur as late as January 2017, spanning the project schedule over more than two years. The alliance manager (AM), together with his planning team, started to ponder whether or not there could be any means to increase productivity and shorten the schedule. The designers explored different perspectives and came up with a new solution for the retaining walls by using an innovative Giken piling technique5, which could be done while keeping the trains operational, by closing down the outside track of the three tracks and building the retaining wall, and then doing the same to the other two tracks. In addition, the piling works could be done prior to major disruption and excavations by keeping the rail partly operational. However, Metro representatives of the alliance claimed that shutting two tracks at the same time would cause too big a disturbance to rail operations. As a solution, the alliance participants came up with the idea of closing an express track, which would cause only minor extensions to travel times but allow retaining walls on the one side and keeping two tracks operational. The estimates showed that, by this approach, the pre-works could be ready in June 2016. This example shows the potential for improved efficiency achieved by increased collaboration among different alliance members. It is also worth noting here that the alliance comprised not only the project-owner participant, together with the design and delivery non-owner participants, but also the rail operator and VicRoads. Thus, modelling and planning to optimise SCM as well as the contractor’s own workforce was able to be enhanced through collaboration with the rail operator, who organised alternative bus connections during the time when the rail track was inaccessible. The rail-operator alliance-team participants were also able to advise on construction planning matters relating to what could legally and effectively be done to comply with rail safety legislation. This minimised making decisions that might result in negative unintended consequences. Additionally, VicRoads’s role as the project buyer and an active alliance member allowed the alliance team access to model the traffic implications of shifting the volume of 376

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excavated materials and to help optimise material disposal routes, as well as flag what permits and other administration details the work may entail. However, the AM soon realised that being efficient in the pre-works phase would not really provide gains in the whole project schedule if they were to follow the general guideline of implementing disruptive works during the summer holiday period in January. This would mean that after completion of the piling works in June 2016, they should leave the site for six months to undertake the works in the following January. The AM considered alternative solutions with his AMT and arrived at a radical idea to undertake the major works during winter between July and August 2016. If successful, this would shorten the total project schedule by six months. However, this was first considered to be just an ‘insane idea’ due to shorter days, high rainfalls, and winds during the Victorian winter (although, in fact, high winds are more prevalent in the hot summer months). The AM was still convinced about the benefits and took the idea to the ALT, which had representatives from all the alliance members and would need to endorse the idea before getting permission from permit-issuing authorities. The ALT members thought that it could be risky but were attracted to the potential savings on the schedule. VicRoads insisted that if that course were to be taken, the road bridges needed to be completed in advance of the trench for the below-ground rail separation, in order to avoid simultaneous closure of roads and rails.6 Finally, the ground-breaking idea was endorsed by the alliance members and accepted by the authorities, leading to major re-sequencing of the work to shorten the schedule by six months. The AM described the spark of the idea as follows (Walker et al., 2018): So we said ‘well, we can’t pack up for six months and go away, so why don’t we just do the rail shutdown in June?’ And we sat there a moment in silence and said ‘yeah, why not, let’s go for it’. So we went through the process with our alliance leadership team, with the project steering committee, with government, to say all the pros and cons of trying to do this thing in winter. So we convinced everybody that it was a good idea, but it was a target that was very achievable, but it was like one of these blue-sky targets. This ambitious goal became a symbol that determined every move to be undertaken in the alliance. The plan was to close the rail operations on the Frankston line from 25th of June 2016 until 1st of August 2016. This 37-days occupation would include the excavation works, setting the new rail foundations and rails, as well as the installation of prefabricated station platforms. The actual platform buildings would then be constructed later on while the railway was operational. As mentioned previously, the scale of these works was complex and massive, requiring around-the-clock work from over 1,000 workers. Challenges were expected to occur not only on-site, but the transportation of dirt and concrete also turned out to be a major logistic challenge. As discussed, the unique inclusion of road and rail authorities and operators (VicRoads, PTV and Metro) in the alliance helped tremendously in solving these issues, because as VicRoads had capabilities in traffic planning to define the best routing for incoming and outcoming truck traffic as well as for replacement buses. In addition, VicRoads had the authority to sign traffic plans and implement changes in the road network when needed (e.g. for oversized vehicles). A tremendous amount of pre-planning was therefore required to make the 37-day plan a reality and it became clear that the alliance form of organising was basically the only suitable option to engage in such planning where the expertise of builders, operators and regulators could be incorporated into one organisation. In a similar vein, Metro had the best available knowledge on how to meet the tight requirements of the Rail Safety Act, while still undertaking 377

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modifications into the existing rail corridor efficiently and effectively. One of the informants that we interviewed (Walker et al., 2018) described this as follows: I think that’s the beauty of the alliance contracting is that you can bring the powers of the different organisations to be and the expertise of the different organisations to be with a common goal and then you can solve the problems. . . You can pick who’s best to deal with different issues and try and bring the expertise to bear and the powers that the different organisations bring under the various legislation requirements to solve those problems. From a behavioural perspective, our informants reported that the ambitious goal acted as a great motivation within the alliance organisation when all members were set to work together to meet this tremendously difficult task. This problem-solving initiative formed a strong collaborative spirit across the organisational boundaries to make impossible possible. These findings show the importance of human side in any technically complex managerial challenge, which is well in line with the original Lean management principles and continuous improvement. The AM also described that such common goals or ‘enemy to be slain’ made the alliance formation rather easy because alliance employees were genuinely interested in solving the problem. He described the importance of the 37 days target as follows (Walker et al., 2018): ‘All the issues that we get on alliances of creating a positive team culture and engaging people and getting people excited about their work and really working together to solve problems. So it was just a case of ‘there’s your target, convince you you’re going to do it, I’ll just tell you how you’re going every week and stand back and watch you’. It was the easiest job I’ve ever had as a project manager because the target incentivised the team to achieve it.’ One should take the above statement with a grain of salt, since naturally this did not mean that the job of the AM was easy at all. Convincingly communicating the goal first to ALT, then to subordinates as well as subcontractors was a significantly challenging task in order in ensuring that everybody would understand first the goal and then jointly come up with a viable and detailed plan. As argued above, the goal was met mainly due to extensive pre-planning to ensure that everything that could be made in advance would be made, including not just planning but also piling and the construction of roadway bridges under which the trench would be dug. Furthermore, the alliance management team (AMT) implemented a rigorous risk-management plan and one mitigation mechanism was to set up two separate planning teams, one focussing only on pre-occupation works and the other one working with the 37-day rail shutdown phase, which nearly comprised a project in its own right. In addition, during the time when it was still uncertain that the plan would be changed towards winter occupation, the AMT decided to keep the team working with the original plan of summer-occupation, as well preparing for the alternative plan of the winter shutdown and excavation blitz. The original plan was, naturally, withdrawn when all the stakeholders agreed on the new schedule. We also draw to the reader’s attention the nature of alliancing and IPD as a collaborative process that seeks shared ideas, insights, knowledge and experience, all within a low power- and information-asymmetry culture. As discussed in Chapter 11 and illustrated in Figure 11.2, this ambience enhances people’s work-task contextual influence on motivation through their psychological state of interpreted work meaningfulness, responsibility and the feedback quality of being part of a collaborative IPD-alliance team. This is why they enjoyed the challenge and the role. 378

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To meet their ambitious goal, the shutdown planning team broke the whole rail shutdown period into an hour-by-hour delivery schedule of thousands of lines long. It would define each task to be taken as well as all the required traffic in and out of the site. It was clear very early on that they could not build station platforms on-site within the given 37 days, but needed to rely on prefabricated modules whenever possible. This led to signing a contract with a supplier that specialised in prefabricated modules. The prefabricator was thus not officially part of the alliance organisation but they were tightly integrated with the alliance and, for example, alliance representatives were sent to the factory to sit in their office and supervise the work. In addition, the fabricator’s representatives participated in alliance meetings in order to jointly plan the detailed schedule for delivery and installation of major-scale station modules. In many respects, this is consistent with Agile and Lean-Construction principles of time-boxing where work is planned in detail and delivered in short bursts (Jalote et al., 2004) and also closely monitored and adjusted as required in a just-in-time fashion.

Lessons learned from the Lean and SCM perspective Overall, this brief case narrative describes the suitability of IPD-based procurement approaches in linking supply chain and Lean management principles to manage complex projects. In the case of Level Crossing Removal Package 1, the alliance or IPD mode of working allowed innovation to flourish when the contractor was incentivised to think of alternative courses of action, leading to the introduction of a new piling technique. This innovation sped up the preparation works, setting a new pace for the whole project, which then led alliance management to think about occupying the site already in winter 2016, six months in advance of the original plan. To make this happen during the time of higher-traffic levels, the alliance needed to squeeze the rail shutdown period into 37 days. Meeting this target required setting up detailed plans all the way from supplier’s factory floor to excavations, site logistics, to installations of new rails and station modules. The alliance model was seen to perfectly support this systematic-planning SCM approach to complex engineering problems when the expertise of multiple diverse actors, ranging from contractors and design engineers to rail operators and authorising bodies, was readily available within the joint alliance organisation. Again, interested readers may wish to access the useful information sources on YouTube that were mentioned earlier in the chapter. From an independent observer’s perspective, a blog has also been kept by Daniel Bowen with articles about the progress of Package 1 (www.danielbowen. com/2016/03/28/bentleigh-crossings-easter). These provide useful resources to better understand how this alliance used SCM and, it may be argued, Agile and Lean techniques in undertaking a massive feat under tight and complex constraints.

Case Study 2 - The Potsdamer Platz development in Germany In this section we discuss a project that was not undertaken under an IPD form of contract, although elements of the development did entail close integration and collaboration, both in the planning and delivery stages. The focus of discussion is the joint-venture syndicate that came together to manage the logistics of material movement to, and around, the huge site, as well as the logistics of managing waste water, together with temporary power, heating and cooling. It involved a specialist consultant with expertise in logistics and groundwater management, together with project-owner developers in that syndicate. This example of adopting an integrated collaborative approach to manage challenging construction-site logistics is demonstrated in the redevelopment of Potsdamer Platz in Berlin. The entity being discussed 379

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here, Baulog, managed a complex logistics supply chain for a mega-project and is therefore a relevant organisation to explore here. The Potsdamer Platz development began in 1994 and was completed in 2001. According to Hildebrand (2005), there were many ground-breaking innovations initiated for the project. Among these was an innovative approach to the transportation of excavated materials and transporting construction materials. For example: for ground excavation works, 5,625 trains of 24 wagons and 1,000 barges were used instead of 300,000 trucks; transporting ready-mix concrete used 2,400 trains of 24 wagons instead of using 115,000 trucks; and for packaged goods 1,350 trains of 24 wagons were used instead of 65,000 trucks. This logistics feat was accomplished by project investors collaborating with the leading German engineering and technical-management engineering consultancy Emch + Berger Ltd to provide transport logistics to the consortium of contractors constructing the complex of buildings and associated infrastructure. The scope of works also included groundwater management to obviate any environmental damage to historic parks and gardens. There is a paucity of literature in English about this interesting development, even though it offers relevant and timely lessons to be learned about how to manage integration and collaboration in what was, at the time, one of Europe’s largest complex mega-projects. We have mainly used internet sources for this section, some of which were not peer reviewed, so the accuracy of detail in the accessed data may be slightly questionable. However, this case study provides highly valuable and relevant content about how and where logistics and the SCM concept intersect with IPD and alliancing. The case study context material we present about this project was in part abstracted from Wikipedia7 and some ‘facts’ may therefore not be entirely accurate as the website page is not a peer-reviewed journal, paper or book. However, it does provide sufficient true, historically referenced material to be of value to this section. We also used extracts from official governmentposted webpages as well as referring to a range of academic published literature.

Background of the Potsdamer Platz case Potsdamer Platz in Berlin is a truly massive real-estate development, being the section of Berlin where both sides of the Berlin Wall were cleared of bomb damage from World War II (WW2) and the derelict remains of that part of the city. The scale of the site, at 60 hectares (Nowobilska and Zaman, 2014), is especially large. It was identified for redevelopment after the Berlin Wall was dismantled in 1990 following East and West Germany’s reunification. The history of the area stretches back to 1685 when it developed as a trading post and over the following centuries it grew to be an industrial and commercial hub of Berlin. According to Nowobilska and Zaman (2014, p1): ‘By 1920, when Berlin’s population reached 4 million due to the ‘Greater Berlin Unifying Act’, Potsdamer Platz, overloaded by streetcars, automobiles, trams and hectic pedestrian traffic became the busiest public space in Europe.‘ It had road access from its beginnings but also canal and river waterway access and later a substantial rail network with warehouses, storage facilities and other urban services. The aftermath of WW2 changed its role from a busy centre to predominately a no-man’s land, and so it became derelict and abandoned from a real-estate development perspective until reunification offered the prospect of massive urban redevelopment. This prospect shares many similarities with other huge urban redevelopments around the globe, where rail yards or docklands are revitalised and renewed to fit a new purpose. In the case of Potsdamer Platz, it had the advantage of existing roads, rail lines and other legacy services, albeit in very poor condition. The problem faced by the city of Berlin, as is 380

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the case with many other huge urban redevelopments, is how do you facilitate the following: movement of waste materials from excavation and demolition work; materials delivered to the site; temporary storage of materials and equipment; and the provision of temporary services? Often these preliminary items in creating a temporary materials-logistics centre amount to a highly complex project in themselves. City authorities are reluctant to have disruptive road damage due to heavy loads and truck traffic, and the inconvenience of road closures or restrictions, and, also, they frequently have complicated permit procedures for safety and traffic demand pressures. The provision of ‘temporary’ services such as power, water, waste groundwater removal/treatment, emission controls and a host of other services also require an integrated approach and a lot of local knowledge about permits, stakeholder concerns and opportunities to use temporary service provision as part of a permanent upgrade.

Baulog, a special organisation to manage site logistics This case study also illustrates how an SCM problem was reframed as a business opportunity. The problem was: how to achieve coordinated action across the very large site for the provision of logistics and services, including environmental protection of the water table? The resolution of the SCM problem was the formation of a temporary organisation that resembled the alliance form of IPD. This organisation then formed a model for further development of its services after the development of the site and initial development building works. Several researchers have pointed out that risks and threats can be converted into opportunities (Hillson, 2002; Olsson, 2007; Samset et al., 2014). Kolk and Mulder (2011, p94) discuss this process from a clean-development, climate-change perspective and concede that for producers of ‘dirty’ energy such as coal and hydrocarbon fuels, opportunities involve strategies for minimising negative impact, whereas other opportunities lie in consulting, research and innovation in measuring and thus reducing negative impacts, or transforming waste into value in some way. Similarly, in the Potsdamer Platz case, constraints imposed by environmental, traffic, congestion and social concerns opened up opportunities to re-think the logistics of the construction site in a new and creative way. Re-use and re-purposing abandoned rail and canal infrastructure, for example, resulted in renewal and re-use and the experience gained by collaborating closely with city administrators to develop sustainable and mutually beneficial outcomes in terms of regulations and waste management allowed a new industry sector to develop: the provision of megaproject early works and logistic planning and implementation. This resulted in a collaborative approach to use existing, albeit dilapidated, facilities for temporary storage and warehousing. According to the Senatsverwaltung für Stadtentwicklung und Wohnen in Berlin (The Berlin Senate Department for Urban Development and Housing)8 statement (translated from the original): an innovative solution to the logistics problem was found, in which the five investors (Deutsche Bahn AG, Debis, Sony, ABB and Land Berlin) created a joint site logistics Potsdamer Platz GmbH (Baulog). The freight depots Anhalter and Potsdamer Bahnhof, which were orphaned after the war, provided the area-wide potential for a functioning construction site supply and disposal location. South of the Landwehr Canal, the South Logistics Center was also set up, which operated the various construction sites via a non-public road and for which a makeshift bridge was built across the canal. Sophisticated logistics ensured not only the security of supply of the construction sites, but the transport by ship and rail also made it possible to reduce the initially 45,000 truck kilometres/day through Berlin to 3,000 kilometres/day. 381

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Another special feature is the planning of a joint energy centre from which the entire planning area can be supplied with electricity, district heating and district cooling. Ring loops are used to access individual building projects via branch lines. This idea was codified on 2 November 1993 in the Senate resolution on the energy concept Potsdamer/Leipziger Platz. There is a question about the degree and extent of this form of integration in terms of IPD and the relationship-based procurement approach. It appears that Baulog was not integrated per se with the contractors that constructed the buildings in the development. However, it was an organisation that undertook SCM in an integrated fashion that involved a great deal of collaboration with the supply chain they managed, as well as the various internal and external stakeholders to the development project. Referring to a website posting9 from a representative of Potsdamer Platz GmbH (Baulog), it states that (translated): The special feature of the institutionalisation of Baulog is that no direct contract between the Baulog and the construction companies are concluded. This constellation is very important for ‘construction site reasons‘. The property developers have concluded a consortium agreement with Baulog, which in turn concludes framework agreements with the contracted logistics service providers and coordinating companies. These companies conclude supply and service contracts with the individual construction companies, which were commissioned by construction contracts from the respective investor or client. This type of activity, however, offers opportunities for collaboration by the commercial logistics entity, such as the formation of the Baulog organisation. Other logistics entities now offer an integrated supply-chain service for materials and equipment delivery and management through digital tools and technologies, so that what is delivered, where, how and when, is easily accessible. One of several examples of these companies in Germany and operating in Europe is Sitelog Baulogistik. For example, on their website10 they claim to offer the following services: •• •• •• •• •• •• •• •• ••

We show you possibilities and variants of the construction process. We translate your scheduling into logistic schedules. We determine the necessary personnel for the realisation of your project. We determine the expected traffic volume. We plan the horizontal transport routes (access roadworks, construction roads, personnel access, etc.) and the vertical transport options (selection, dimensioning, locations of hoists, cranes, etc.). We plan your temporary infrastructure (building electricity, container systems, construction water, IT network, WLAN, etc.) We create area concepts, disposal concepts, construction logistics phase plans and construction logistics manuals. We make a cost estimate for construction-site equipment (BE) and construction logistics. We take over the development of your tender documents.

This provides some idea of the scope and level of integration and collaboration envisaged that such organisations are now engaged in.

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Outcome of integration efforts Many readers may be contemplating the question: was this approach effective and justified? In response we refer to a website post11 from a representative of Potsdamer Platz GmbH (Baulog): While it is difficult to estimate the profitability of the individual construction companies involved, it is clear from the point of view of the builders that the Baulog concept is clearly profitable. The total cost of the Baulog amounts, for the eight years, to 130 million DM (about 65 million euro). This is about 1.6 percent of the total construction work on the Potsdamer Platz worth 8 billion DM (about 4 billion euros). The 130 million DM (about 65 million euro) logistics costs are offset by, among other things, financing costs for a longer construction period, which had already been compensated for after only a quarter of a year. Overall, the response among residents of nearby residential areas should be viewed rather negatively, although it would be precisely these residents that would have been affected by truck transport. However, the residents understandably do not measure or appreciate the potential noise pollution impairment for ‘traditional‘ site logistics as experienced before the start of the construction work. In the opinion of residents’ initiatives, the affected citizens were given little opportunity to participate in the planning process. At Baulog, these omissions were recognised and public relations stepped up, after initially being severely neglected. The acceptance and the image of construction-site logistics has actually changed a lot for the better. Obviously, the credibility was restored . . . The excavation [material] is almost exclusively reused in the Berlin-Brandenburg area. To what extent the coordination of transport by the Baulog or other companies has influence on the locations of the sources of supply and the disposal or recycling has yet to be investigated. Reflecting on this post, in response to the question posed, we suggest that the Baulog approach was successful from several important perspectives. From a purely economic view, it appears to have been a commercial success through numerous tangible benefits, from reducing the potential construction time and its related financing and other direct costs. It also provided benefits of scale and a coordinated approach due to the integrated nature of the enterprise. From the perspective of Berlin City and its residents and visitors, we can add a reduction in traffic congestion, which might have gridlocked the city at greatly extended traffic peak times, and have been far more inconvenient at other non-peak traffic times. Finally, from an environmental perspective the ‘risk’ posed by the scale of this project was transformed into an opportunity by the Baulog. We point to the earlier quote that refers to the re-use of excavated soil to reduce the impact on landfill and, through re-use, and the internal site-transportation network and storage facilities, the fact that most excavated material was not transported on Berlin’s City traffic routes. Additionally, this Baulog strategy allowed a more environmentally friendly solution to the emission of fumes, dust and airborne pollutants in general, through a reduction in truck transport by replacing it with train and barge transport modes. Baulog also managed utility services such as power, heating/cooling and groundwater monitoring and control. The latter was important to maintain the water table due to the extensive basement excavation work from construction activity but also, from the environmental perspective, it maintained the water table for the nearby parks and famous Tiergarten to reduce any potential harm due to changing water-table levels. Tesch et al. (online, accessed 16 October 2018, p5) state that:

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Approx. 6.5 million m³ of groundwater were pumped from October 1994 to the end of May 1998 from the construction pits at Potsdamer Platz. From this 0.5 million m³ were disposed by means of the combined sewage system due to its water quality. . . . The technically perfect control – and conservation of an evidence system, as well as the scientifically founded design and steering of required measures with the simultaneous use of innovative methods for the optimum realisation of the goals, have created the prerequisite to convincingly contradict doubts raised publicly in the past. These doubts related to the construction project Potsdamer Platz unacceptably endangering ecological and structural goods as well as posing a lack of environmental acceptability. This reinforces the concept of how a constraint, risk or perceived threat can be turned to an advantage as an opportunity through a structured and thorough analysis of a challenging situation. In the Potsdamer Platz case study we see two examples of this. First we saw the legislative and procedural challenge of a requirement to protect citizens and the environment from adverse congestion and disruption due to construction logistics traffic. This triggered not only a collaborative approach in resolving issues in an innovative way but that this led to a new market niche in consulting: the Baulog logistics concept. Second, we saw how the constraints of maintaining and treating groundwater have been resolved in an innovative and sophisticated way. Groundwater was monitored and managed during the construction of the development to ensure that no harm to the environment (and particularly the historically famous Tiergarten) occurred. The Baulog’s water-management process also enabled construction of deep basements in waterlogged conditions. Additionally, and during the building-development phase of Potsdamer Platz, rainwater management was enabled, due, in no small part, to the way that initial recycling of water into catchments and water features was designed. Interested readers may view a series of photographs of the development12. There is also evidence of high levels of collaboration between Baulog and a range of stakeholders at the planning stage where front-end modelling was done on water tables and the various requirements for waste water removal and treatment (Coldewey et al., 2000; Tesch et al.) as well as working with contractors to monitor and control ground water drawn from excavation works.

Discussion We now answer the first question posed. How do IPD projects facilitate engagement and action across the supply chain to effectively realise a project? What are the necessary processes involved? Figure 17.1 illustrates a generic model to explain what may be happening when IPD projects teams engage project teams more deeply to take effective coordinated action. Central to the answer is the way in which a system is established that is based on the integration of separate project teams. In alliancing this has been shown to be the OP and NOPs with limitedform integration involvement of subcontractors and suppliers. We also see high levels of integration and collaboration in other IPD forms, such as the higher IPD forms used in the USA as well as NEC4 and T5 evolved approaches in the UK. The prime driver is the IPD form. This book has explained the Collaboration Framework in great depth with an outline provided in Chapter 2 and detailed explanations of the platform facilities component in Chapter 9, the behavioural component in Chapter 15, and the processes, means and routines component being covered in Chapter 21. This combination, when adopted effectively, leads to integration of the team so that the disparate teams of client-side, design, main delivery contractor, key-services subcontractor and facility operator become a single united team. This degree of integration varies in a number 384

IPD from a Lean-supply-chain management perspective Collective-based behaviour Productive interfaces

Platforms Behaviours Routines

Collaboration

Resilience A problem-solution focus

Integration

Effective coordinated action

Multiple insights/perspectives Shared and mutual dependence Productive energy rather than defensive routines Figure 17.1  The concept of effective coordinated action

of ways. For example, the contractor and main services subcontractors may be integrated into an alliance, as was the case with the National Museum of Australia (Auditor-General of the Australian National Audit Office, 2000; Hauck et al., 2004). They may form an alliance as a separate contract within a PPP project (Jacobsson and Walker, 2013). The operator may also play a significant role in an alliance, as was discussed with respect to the LXRP in this and other chapters. There may even be a semi-official alliance or sub-alliance that includes a trades union (Walker et al., 2002). There are also examples of more widespread integration of the client, design team, contractor and a significant number of subcontractors, mainly from the USA, using the Integrated Form of Agreement (IFOA) IPD approach (American Institute of Architects et al., 2010; Cheng et al., 2015) and in Finland (Alhava et al., 2015). An example of the evolution of the Heathrow Terminal 5 approach to SCM is well explained in Doherty (2008) and how that been expanded and refined with Crossrail in the UK (DeBarro et al., 2015), though that project has experienced some difficulties for some subcontractors to fully grasp the IPD concept and its advantages (MacAulay et al., 2018). Integration in IPD projects has numerous benefits but we focus in Figure 17.1 on how it facilitates multiple insights and perspectives so that, as problems or unforeseen events crop up, there are a range of available ways of looking at and solving the issue rather than just a single discipline or team-group way of seeing the situation. This was demonstrated by Hietajärvi et al. (2017) when discussing an alliance project in Finland as being an important characteristic of full one-team integration. Integration also enables a sense of shared and mutual dependence so that team members feel that they all ‘swim-or-sink’ together and this aids concerted action. Team integration, as seen in effective IPD projects, also results in a positive energy flow to ‘get on with the job’ rather than being concerned with undertaking defensive routines in preparation for potential disputes. Defensive routines may incur considerable transaction costs and the waste of managerial and leadership energy. 385

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Effective integration of the teams into a unified single team is insufficient in itself. It should drive and lead to effective collaboration. Chapter 15 explains alliance behaviours in some depth. Figure 17.1 illustrates four outcomes of effective collaboration. It leads to collective-based behaviours, so that all project teams involved in the IPD form have a tribal sense of unity and solutions can be better crafted, based on collaboration and consensus (Smith and Winter, 2010). Effective collaboration results in productive interfaces being established and maintained because people tend not to conceal or withhold information or knowledge. There is a distinct sense of resilience with collaborative teamwork because when barriers are identified or sensed by team members the immediate action is to overcome them rather than begin preparing to make a claim for disruption or extra work or re-work. This attitude has been shown (see Chapter 18 on the section about Barwon Water) to be closely associated with effective collaboration (Love et al., 2016b). Finally. Figure 17.1 illustrates a problem-solution focus through collaboration. In an IPD project, as we see throughout this book in various chapters, there is a workplace attitude of identifying problems and early-warning signs and addressing them as soon as possible in a collaborative no-blame fashion, as illustrated by the example given by Lloyd-Walker et al. (2014). This discussion of Figure 17.1 helps to answer Question 1. Facilitating engagement and action across the supply chain first requires a set of platform facilities, behaviours and routines that reinforce the necessary behaviours. This environment or ecology to enable intense collaboration and achieve high levels of integration provides the momentum for SCM engagement. The limitation to the extent of SCM engagement and action that can be achieved lies in part with a platform element: the motivation to do so. This is not easy across the board and helps explain why the entire supply chain on these projects is not integrated into an alliance. This kind of arrangement, as discussed in Chapter 1 and illustrated in Table 1.1, identifies motivations that trigger IPD-integration motivation. Usually this is based on project complexity where each part involved has more to gain (and less to lose) from collaborating rather than trying to cope with the complexity individually. Simple or merely complicated situations may often be sufficiently managed by using traditional approaches and procurement paths. Snowden (Kurtz and Snowden, 2003; Snowden and Boone, 2007) refers to the ordered, simple and complicated domains as requiring best practice or better practice respectively. We have heard many of those involved in alliances in our research mentioning that when tasks can be understood more easily, so that they fall within the ordered domains, competitive tendering often results in the optimum supplier. Competitive tendering tends not to lead to the levels of trust and commitment found in alliancing and advanced IPD forms (Cox, 1999; 2004). Thus we tend not to see supply-chain integration flowing across the entire chain. Therefore, the ultimate question is – can the alliance team reduce the complexity and ambiguity it faces across the entire supply chain to a level that could provide the necessary information for competitive tendering across the subcontractor suppliers to the alliance’s (or other IPD form) delivery participant? If not, and it seems implausible that all necessary information will be known to enable the inclusion of the entire project supply chain, then this implies that suppliers’ knowledge is required to manage the complexity and uncertainty by integrating at least the first tier of suppliers (e.g. through framework agreements). These first-tier entities can then manage their supply chain through their traditional manner or engage with their supply-chain members using a collaborative form if that becomes necessary. Collaboration also requires collaborative behaviours (see Chapter 15 for more details). A problem that arises with many subcontractors and suppliers who have only ever had experience in a highly transactional project-delivery approach is that they find it very difficult to adapt to an integrated and collaborative project-delivery form. MacAulay et al. (2018) provide examples of the struggles that some subcontractors and suppliers have with believing in the value of deep intimate collaboration with respect to co-creating value through innovation in the Crossrail research. 386

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A summary of our response to Question 1 is that IPD projects facilitate engagement of the supply chain to the extent that they can include the supply chain within the platform facilities, develop and achieve supportive collaborative behaviours and integrate them into the IPDalliance agreement. This level of supply-chain engagement is limited to the OP and design, delivery and operator NOPS in alliancing, but we see further engagement in some other IPD forms such as the USA form of IPD and the UK form, through NEC4 and the Crossrail form of agreements. To answer the second research question, how these processes are enacted in practice, we draw upon both our two case study examples. The processes that we consider answer this second question include but are not limited to: 1

2

3

4

Processes that reinforce the motivation to collaborate. In the case of alliancing, the projectalliance agreement, as discussed in Chapter 21, is specifically designed to require collaboration and a one-team unified integration. In the Baulog case, the formation of the Baulog joint-venture premise was that Baulog’s raison d’être was to collaborate with the Berlin City administration and other German regulatory agencies to ensure permits and the resolution of regulatory issues and also to collaborate with the contractors and designers of the various building developers to optimise shared infrastructure, such as power, heating, cooling, water, sewage and groundwater management services. Processes that reinforce collaborative behaviours (see Chapter 15 for details) include noblame routines, such as consensus being required in decision-making and being embedded in the culture and expectations of how AMT and ALT are conducted and how they build into the governance system. In this way, not only is the workplace culture orientated towards collaboration but also the project governance arrangements are based on supporting and ensuring collaboration and effective one-team integration, such as those that measure performance based on the whole project rather than individual, or work-team units and that promote joint responsibility and accountability. No-blame is an integral part and fundamental core element of a project-alliance agreement (PAA). The Baulog arrangement covered the entire Potsdamer Platz site rather than having separate agreements for each building development on the site and it covered the entire site’s groundwater control system, affecting the site and surrounding areas. Thus it addressed the entire site’s logistics issues as a highly coordinated, integrated and collaborative entity. Processes that ensure collaborative HRM processes (see Chapter 12) including recruitment, on-boarding, training and development. These are designed to help team participants in the IPD form, such as an alliance, to understand the logic of integration and collaboration in facilitating resilience and responsiveness to uncertainty and unexpected adversities. This helps support both Lean and Agile approaches to planning and action. Routines that encourage innovation, continuous improvement, experimentation and taking the initiative when responding to a threat or seizing an opportunity. The PAA and alliance governance measures, such as those for the LXRP have KRAs for innovation and its diffusion, as well as requirements for a register of lessons learned and value for money (VfM). The Baulog case suggests that, over its lifespan, and how it has developed now to a new business niche market, continuous improvement and co-learning with stakeholders was seen as an important, if not vital, strategic aim.

There are more processes that we could mention and which are discussed throughout this book on routines and means that help IPD to be both Agile in terms of responding to unfolding events and for Lean-Construction approaches, such as the deep and continuous collaboration 387

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and means to effectively integrate teams. The Baulog case study illustrates how the logistics processes of materials movement (inbound, outbound and within-site), and management of the supply chain were dependent upon a high level of logistics organisational capability. The case study details indicate how it was managed and how the particular issue of managing groundwater was achieved. This illustrated deep levels of cross-team and cross-discipline collaboration and an integrated approach to solving challenges and problems that faced everyone involved in this complex mega-project.

Conclusion This chapter focussed on IPD, mainly in the construction sector, from the perspective of Lean construction, Agile project management and supply-chain management when combined with a Lean-thinking approach. It also answered two questions: 1 2

How do IPD projects facilitate engagement and action across the supply chain to effectively realise a project? What are the necessary processes involved? How are these processes enacted in practice?

Both questions were answered from an integrated Lean, Agile and SCM perspective. We first explained how we perceive Lean construction and how it has evolved from its roots in TQM and time and motion studies to become a more holistic concept that embraces the value of collaborative and integrated team work. We then discussed the Agile concept and how that links to the IPD and alliancing concept and then we continued that link through to SCM. We then drew upon two case study examples of collaboration and integration through a section devoted to the LXRP in Australia, followed by a case study of the Potsdamer Platz development and the role of SCM through the Baulog group on that project. We also drew upon the work of Fischer et al. (2017) and their examples from IPD projects in the USA. Neither case study focussed on SCM in its process-management context. Most SCM examples, if found in texts or peer-reviewed case studies, relate mainly to the manufacturing sector. SCM has, however, been explored and discussed in relation to the construction PM sector with respect to its subcontractors and material suppliers (Cox and Ireland, 2006; Cox et al., 2006). SCM has also been studied from a relational perspective (Cox, 2004; 2014) and so our IPD and alliancing focus builds upon and extends that body of work. The theoretical contribution made by this chapter relates to extending our understanding of how IPD and SCM, Lean construction and Agile construction are linked and helps identify some boundary-limiting conditions for why and where they may applied. We have demonstrated from theory cited in this chapter, as well as from our analysis of the case studies, that engagement and action is effectively facilitated by two main factors supported by the mechanism to drive action through collaboration. Figure 17.1 provides a simple illustration of how effective coordinated action is conceptualised and realised in practice.

Notes 1 ‘New McKinnon Station Open after 37-Day Construction Blitz.’ www.premier.vic.gov.au/new-mckinnonstation-open-after-37-day-construction-blitz, accessed 12th February 2018. 2 In fact, due to the increasing traffic levels, the removal of dangerous level crossings has been ongoing since the 1950s and the first removal projects were undertaken in the 1960s. However, it returned to the political agenda in the early 2010s when the growth pains of the Melbourne metropolitan area seem unceasing.

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IPD from a Lean-supply-chain management perspective 3 The statutory authority responsible for providing, coordinating, and promoting public transport in the state of Victoria. PTV owns the railway tracks and oversees the privatised operations on them and is responsible for Melbourne region public transport ticketing system. 4 To understand the scale of the effort here, one of our informants helpfully indicated that this alone would be equal to filling nearly half the volume of the Melbourne Cricket Ground, which is a massive outdoor stadium fitting nearly 100,000 spectators. Note: while the press release at www.premier.vic. gov.au/new-mckinnon-station-open-after-37-day-construction-blitz mentions 250,000 cubic metres of soil, the alliance manager of the work, when interviewed, stated 260,000 cubic metres. However, the scale of the task remains clear. 5 The Giken piling method originates from Japan and was never commercially used before in Australia. It allows implementation of piling works within a much narrower stretch and thus fits between the trainline and against the back fences of the local inhabitants. John Holland needed to send its operators to Japan to learn about the method. 6 North Road especially was identified as a major bottleneck, carrying over 40,000 vehicles a day. 7 URL https://en.wikipedia.org/wiki/Potsdamer_Platz#Europe’s_largest_building_site, accessed 15th October 2018. 8 See www.stadtentwicklung.berlin.de/planen/staedtebau-projekte/leipziger_platz/de/informationen. shtml, accessed 15th October 2018. 9 www.vsl.tu-harburg.de/gv/5/test?menu=5d&inhalt=5d1, accessed 16th October 2018. 10 www.site-log.com/baulogistik-leistungen/planung, accessed 24th October 2018. 11 www.vsl.tu-harburg.de/gv/5/test?menu=5d&inhalt=5d1, accessed 16 October 2018. 12 See www.google.com.au/search?q=baulog+potsdamer+platz+water+management&rlz=1C1GCEA_ enAU815AU815&tbm=isch&tbo=u&source=univ&sa=X&ved=2ahUKEwjotaqm-YneAhUGdt4K Heh8BsUQsAR6BAgGEAE&biw=1220&bih=518.

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18 IPD: FACILITATING INNOVATION DIFFUSION Peter E. D. Love and Derek H. T. Walker

Introduction A key characteristic of the integrated project delivery (IPD) approach, through collaboration between the project-owner participant (OP) and non-owner participants (NOPs), is a high level of innovation and its diffusion throughout the project teams and beyond (Love and Gunasekaran, 1999; Mandal et al., 2003; Walker et al., 2003; Walker and Lloyd-Walker, 2015). While many academics and practitioners may applaud the diffusion of innovation in delivering construction projects and have done so for many decades, as proposed in numerous government reports, for example (Latham, 1994; Egan, 1998;2002; Murray and Langford, 2003), there has been, at best, a patchy record of actual innovation diffusion beyond project-participant teams that have generated an innovation. This may be a result of: reluctance by engineers and other professionals to document and search for innovation stories (Anderson et al., 2001); concerns about being innovative and perhaps losing competitive edge in highly transactional project-delivery environments (Tatum, 1988; Blayse and Manley, 2004); and other systemic factors that inhibit sharing detailed contextual innovation knowledge and information (Peansupap and Walker, 2006; Bygballe and Ingemansson, 2014). Clearly, for innovation to be effectively diffused there needs to be a willingness to do so, an organisational environment that supports and doesn’t inhibit innovation diffusion and a willingness to build potency, capacity and realisation of innovation diffusion (Love et al., 2016). The question addressed in this chapter is: ••

‘How can the construction organisational delivery model enhance the effectiveness of innovation diffusion?’

More specifically, we focus on IPD and how its organisational arrangements prepare and support participants to diffuse innovation and how effective innovation diffusion takes place. We draw upon several research projects that we have undertaken over the past decade in which innovation diffusion formed an important part of the analysis of research data. We also draw upon the growing literature on construction-industry innovation diffusion within an IPD context. Readers interested in this topic are encouraged to read this in conjunction with other related chapters. Chapter 8 discusses the role of design thinking, creativity and innovation, and is relevant to this chapter. Chapter 10 is relevant because it focuses on the cultural dimension 393

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of collaborative behaviours. Chapter 11 discusses knowledge, skills, attributes and experiences which have relevance to this chapter from the perspective of an individual’s ability and capacity to share innovation knowledge. Other chapters in this book provide broader contextual and technical aspects about innovation and its effective diffusion. This chapter is structured as follows. First we introduce and explain the meaning of concepts such as ‘sticky knowledge’, knowledge management (KM), organisational learning (OL) and innovation diffusion and its importance. This leads to a discussion of processes and approaches to KM and OL of innovation as applied in the Barwon Water Program alliance. This is followed by discussion and analysis of the processes and approaches used in how innovations were recorded, appreciated, and how this valuable knowledge was carried forward to subsequent projects and programs of work of the participants in the Victorian Level Crossing Removal Program (LXRP) and also in the UK. We complete the chapter with a reflection on innovation-diffusion implications and conclusions.

Conceptual underpinning of innovation diffusion Innovation diffusion requires shared knowledge, perspectives and information about an innovation, so that the receiver of information about an innovation may appreciate its particular relevance to the receiver. Diffusion is also primarily about people sharing experiences about what works and what seems not to, and speculation and discussion to hypothesise and find plausible reasons for this. One of the most famous seminal examples of knowledge and innovation exchange through collaborative working was documented by Orr (1990). In his PhD thesis he discusses how photocopier field-service technicians formed small discussion and reflection groups where they shared information and insights to solve problems they had encountered with the machines they maintained. The concept of communities of people facilitating learning about innovation through practice and reflection in what came to be known as communities of practice was espoused and detailed by numerous authors (Lave and Wenger, 1991). During the last two decades, a number of writers on construction and engineering project management have detailed how innovation diffusion occurs through knowledge management, reflective practice, organisational learning and communities of practice across a range of organisations. These include recent examples from water infrastructure alliance projects (Love et al., 2015), and innovation diffusion related to the Crossrail project in London (Dodgson et al., 2015; Worsnop et al., 2016). This builds upon interest in this area applied to projects in general, as evidenced from an editorial (Love et al., 2003) for a special issue of the International Journal of Project Management volume 21, issue 3 (2003) of eight papers on the management of knowledge in project environments. Numerous PhD theses have been undertaken over the past two decades on individual learning through action that leads to organisational learning and innovation diffusion. Australian examples include a PhD thesis on the innovation diffusion of informational communication technology in the construction industry (Peansupap, 2004); one on innovation diffusion in the Australian construction industry (Maqsood, 2006); and another about situated knowledge and learning in the steel manufacturing industry (Sense, 2005). These, and many others, explored how people learn from their project work and how innovation may be more effectively diffused across and between project teams. Much of the process of innovation and its diffusion revolves around the process of exploration and the exploitation of ideas, existing information and shared insights (March, 1991), but this is insufficient without people being engaged in innovation and diffusion and organisations that employ them having sufficient dynamic capabilities to enact innovation (Davies and 394

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Brady, 2015). Several chapters in this book discuss the development of the requisite capabilities need by project participants. For example, Chapter 5 discussed client capabilities; Chapter 10 examines the organisational culture required for creativity and effective collaboration; and Chapter 11 explores what motivates people to perform in alliances to use the specific knowledge, skills, attributes and experience of participants for collaboration and innovation. These and other chapters are highly relevant to fleshing out the background context of effective innovation diffusion by IPD project teams. Additionally, it is important for innovation-diffusion recipients to understand how it may be of advantage to understand the innovation and how it may be effectively re-used and adapted, if necessary, to meet the circumstances of the receiver’s context in applying an innovation. Knowledge about anything can be notoriously ‘sticky’, i.e. difficult to diffuse and pass on to others, as detailed by research by Szulanski (1996;2003) and von Hippel (1998). Further, as Söderlund (2010) argues, making sense of knowledge and being prepared to apply it in a given context are dependent on the process of entrainment, of meaning suddenly becoming evident through flashes of inspiration when most needed. The value, implication and potential impact of new knowledge such as innovation is only appreciated fully when it is needed and exposure, or re-exposure, to existing tacit or hidden long-term memory knowledge triggers a desire to follow up on how that knowledge may be applied. Szulanski offers useful insights into how knowledge becomes ‘sticky’ at the individual level that may also be applied at the project and organisational level. According to Szulanski, based on a dyadic relationship between the source of knowledge and recipient (1996;2003), stickiness is characterised by the following sources. As illustrated in Table 18.1, the stickiness of knowledge is considerably reduced in IPD through both personal relationship factors as well as a strategic systematic design to encourage innovation and its diffusion. Alliances expect what is termed ‘breakthrough’ innovation (Hutchinson and Gallagher, 2003; Wood and Duffield, 2009). A recent book on IPD in the USA provides many case study examples of how innovation is achieved through cross-disciplinary collaboration and problem-solving that reduces knowledge ‘stickiness’ (Fischer et al., 2017). Overcoming knowledge ‘stickiness’ is paramount to innovation-diffusion approaches at the individual, group, project and organisational level.

Knowledge management and organisational learning It has been argued that the term KM is routinely misused, as it is often drawn into informationmanagement systems confusing knowledge with information (Wilson, 2002). There is a distinct hierarchy to the concept of knowledge and, hence, knowledge management. Tuomi (1999, p106) discusses the yield in terms of the intellectual dividends per effort expended, as illustrated by a graph of yield against learning and experience. At the lower levels of the hierarchy, source material for effort is raw unfiltered data that had some value-adding through the processing of analysis and pattern exploration. He then layers that with what he terms predictable knowledge and, above that, intelligent choice, with compassionate wisdom at the head of the hierarchy. The higher levels of knowledge, intelligent decision-making about choices, and compassionate wisdom, support the idea that knowledge cannot be ‘managed’ as such but only experienced and applied. Writers on KM stress that KM tools, such as various forms of archived and available repositories of lessons learned do not manage knowledge because it is contextual and individual. So-called KM systems can only suggest distilled ‘models’ of a reality (predictable knowledge) of others and that when people do knowledge work they are constantly re-interpreting the experiences of others based on their own experience and learning, however limited or extensive that may be 395

There is a reluctance to impart knowledge for a range of reasons. The potential innovation source fails to convince the potential receiver of an innovation’s value. This may be a question of transparency and communication and perceived competence. Recipients may be very risk-averse and unwilling to try new things, or else may feel that an innovation provides little value. Recipients may not have the capacity or ability to make sense of an innovation’s potential advantages and application.

Source lacks motivation Source lacks credibility

Recipients may tend to forget about an innovation’s content and/or context. Their innovation logging and diffusion strategies may not exist.

The system may inhibit innovation due to strict adherence to what appeared to ‘work’ in the past or it may not provide a safe culture for experimentation.

The quality of the source and recipient relationship is critical in building trust and confidence in each other’s competence and willingness to collaborate and innovate.

Recipient lacks retentive capacity

Barren organisational context

Arduous relationship between source and recipient

Recipient lacks absorptive capacity

Recipient lacks motivation

Explanation

Source

Table 18.1  Sources of knowledge and innovation-diffusion ‘stickiness’ in an IPD context

There is a distinct drive to enable and achieve innovation diffusion across teams and the project owner. Mechanisms are put in place to ensure transparency and openness. Teams are usually selected on innovation capacity and performance. IPD engenders a culture of cross-team respect and expertise appreciation. Usually there are specific key result areas (KRAs) and key performance indicators (KPIs) for innovation diffusion to guide and reward innovation. Absorptive capacity is a learned art (Martinkenaite and Breunig, 2016) that is entrenched with the IPD alliance concept (Manley and Chen 2015; Love et al., 2016). Participant selection is often dependent upon participants demonstrating a capability to learn from and diffuse innovation (Department of Infrastructure and Transport, 2011). In IPD alliancing, in particular, there are specific required systems that support sharing innovations and widespread knowledge dissemination strategies. Participants are selected on the basis of demonstrating innovative adaptation. IPD fosters a no-blame culture for trying new things (LloydWalker et al., 2014). The IPD ‘system’ is largely predicated upon effective innovation application through collaboration (Department of Infrastructure and Transport, 2011). IPD specifically demands close and deep collaborative behaviours between and within teams. IPD is predicated on the vital importance of creating an ambience in which innovation and its diffusion is part of the culture (Walker and Lloyd-Walker, 2014).

IPD context

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(Wiig, 1997; Snowden, 2000; Binney, 2001). KM seems therefore to apply at the individual and small-group level. The more an individual undertakes an action-learning cycle (Kolb et al., 1971) of thinking and planning, taking action, monitoring and analysing the impact and reflection, the greater is their accumulation of valuable experience. This builds with deep reflection on practice at each iteration to help individuals continually develop updated and nuanced mind-frames and theories to apply and adapt (Schön, 1983) and to make decisions about when to apply or adapt a theory. This is what Tversky and Kahneman (1974) refer to as thinking fast when they react quickly with a decision. This may be contrasted to thinking slow exemplified by greater analytical – perhaps first principles or based on a reasoned chain of evidence and logical progression – thought processes (Kahneman, 2011). When judiciously combining thinking fast and slow in the right circumstances (Kahneman, 2011), an individual can increase the probability of making more intelligent choices and can build a more caring and compassionate approach to decision-making and action, as noted by Tuomi’s (1999, p106) knowledge hierarchy. Tools that provide access to high-grade information have been discussed within a project and construction-management context (Ruggles, 1997; Anumba, 2009) but these tend to understate the personal nature of how people undertake knowledge work collaboratively in communities of practice, for example (Wenger, 1999a;1999b). The advantage of knowledge work being undertaken by groups of people is that they can share perspectives on how they see problems and solutions and thus widen the reflection and analysis elements of doing knowledge work (Parker et al., 2008). The refinement of an individual’s knowledge and incorporating that into organisational learning has been a key advance of developing accessible corporate (or project-level) memory. As perspectives, insights, reflections and organisational routine knowledge (even though much of this is often tacit and not explicit) are combined in a systematic manner, then this builds a powerful way in which knowledge may be developed and shared. Kolb (1984) initially developed the Experiential Learning Theory concept based upon six distinct propositions: 1 2 3 4 5 6

Learning is best conceived as a process, not in terms of outcomes (p26). Learning is a continuous process grounded in experience (p27). The process of learning requires the resolution of conflicts between dialectically opposed modes of adaptation to the world (p29). Learning is a holistic process of adaptation (p29). Learning involves transactions between the person and the environment (p35). Learning is the process of creating knowledge (p35).

Implied, but not specifically stated in the above six propositions, is the impact of the cultural facet in which the learner is situated. Yamazaki (2005) added a further dimension to the Kolb model by explaining how cultural typologies may impact the preferred learning style of a person. For example, in high-context cultures subtle cues are given and received and so exploring ‘feelings’ about a situation is important to their ability to understand a situation and what may be learned from it. Similarly, high-power-distance cultures may make the task of initiating action more difficult. This line of enquiry stresses the social aspect of undertaking knowledge work. Seminal work by Nonaka (1991) developed the SECI cycle of knowledge being Socialisation though sharing tacit knowledge, Externalisation through making tacit knowledge explicit, Combining tacit and explicit knowledge, then Internalising that combined knowledge. Crossan, Lane and White (1999) introduced the concept of knowledge sharing and application of the SECI model as a feed forward and feedback set of processes in which knowledge, insights and innovation diffusion occur between individuals in organisation chains, through groups adapting and adding additional 397

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perspectives until that knowledge is synthesised into explicit forms and tools. However, as Lindkvist and Bengtsson (2016, p74) argue, a limitation of the SECI model is that it seems to assume a less dynamic and interactive co-creation of knowledge through collaborative action than one would expect in-well integrated teams of experts. The SECI process within integrated collaborative teams, where those involved are boundary spanners who bridge gaps between knowledge domains, tend to have a more dynamic and iterative approach to what may be a form of SECI. Lindkvist and Bengtsson suggest a revised SECI model where: what the organization can do to promote such interactive knowledge creation processes in a two-step manner. First, the subjective knowledge of individuals has to be constituted as an objectified and stand-alone conjecture. Second, we need some kind of (subjective-objective knowledge) interaction to elicit its inherent possibilities and realize its inspirational power. (2016, p81) Their conception of knowledge transfer and use is more dynamic and interactive in bridging knowledge divides across disciples and allowing boundary spanners who can work at the boundaries of knowledge across multi-disciplinary teams. This seems to fit the IPD context more clearly Järvinen and Poikela (2001, p286) took this view of OL a step further by consolidating these ideas to develop a clearer way to visualise how information and knowledge is developed, transmitted and used. They argue that sharing knowledge and diffusing innovation is a complex process involving people, culture and the use of technologies. Their main contribution could be seen as exploring the context of learning from an individual, group-shared and organisational level. An adaptation of their model is presented in Figure 18.1. They also interweave four basic identified processes of learning and sharing insights and experience to co-create knowledge. These are:

Social Reflective

Operational Cognitive Context of Individual Learning

CE RO

AE AC SE

Context of shared Learning

RC

LD NK

A

B C

X Y

Context of organisational Learning

IF II

KI

D

IK

1 - Operational Processes – Active experimentation AE – Learning by doing LD – Knowledge institutionalisation KI 2 - Social Processes – Concrete experience CE – Shared experience – SE – Intuition formation IF

3 - Reflective Processes – Reflective observation RO – Reflecting collectively – RC – Intuition interpretation II 4 - Cognitive Processes – Abstract conceptualisation AC – Networking new knowledge NK – Integration of interpreted knowledge IK

Figure 18.1  Organisational learning processes (Source: adapted from Järvinen and Poikela, 2001, p286)

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1

2

3

4

Operational processes where individuals: actively experiment (AE) to try out new or adapted ideas; collaborate as a group, and indeed in IPD projects as cross-disciplinary groups and project team participants; experiment and learn by doing (LD); and at an organisational level that new knowledge is institutionalised (KI) so that innovations may be applied across the organisation. Social processes are at work at the individual level where experimentation within a specific social context results in a concrete experience (CE); at the group and project level two or more individuals interact and share their experiential experience (SE); and at the organisational level, intuition formation (IF) allows the new knowledge or innovation to become an accepted norm. Reflective processes by individuals enable them to think about their observed experience (RO) particularly to understand its context; at the group and project level this occurs through collective reflection (RC) to enhance the quality of reflection by bringing multiple perspectives to broaden and deepen contextual understanding; at the organisational level this results in intuition interpretation (II) so that a wider perspective is taken perhaps taking into account changes and evolution in the organisation. Cognitive processes are at work at the individual level when people reflect upon their concrete experience leading to sense-making and development of an abstract conceptualisation of what was learned (AC) so that it may be applied and/or adapted in another context; then at the group or project level this conceptualisation is shared and the group network tests and validates their new shared networked knowledge (NK) ideas to provide a more integrated appreciation form of individualised knowledge or innovation; and then to a more holistic organisationalwide perspective as an integration of interpreted knowledge (IK) or innovation.

This model illustrates three contexts of learning: the individual, the shared (in particular across and within-team collaboration on projects) and OL. Walker and Harley (2014) show how learning from one project to another in program alliances operates and so organisational learning occurs at that level with some knowledge diffusion also being achieved within some additional alliance participant’s home organisations. Chapter 2 discusses in more detail institutional theory and the three pillars of regulatory, normative and cultural-cognitive influences (Scott, 2014) that help explain how behaviours, actions, knowledge or innovation may become institutionalised. Resulting from an extensive research study into innovation diffusion and KM/OL practices in participating construction participants representing the project owners, designers and project contractors, a concept was posited referred to as the Knowledge Advantage (Walker et al., 2005) that identified three necessary supportive pillars for sustaining competitive advantage through project knowledge/learning. These pillars are: a supporting information-communicationtechnology (ICT) infrastructure with sub-elements of hardware/software provision and systems support; a leadership-supportive infrastructure with sub-elements of learning organisation vision-creation and vision-realisation; and thirdly a people infrastructure that encompasses both people and supporting process sub-elements. This concept was developed from intense workshops with participants and case study investigation. A similar concept was developed around this time and empirically tested by others in Germany on a sample size of 496 cases by Lindner and Wald (2011) working independently. Their findings identify 17 factors grouped into three main clusters. They state (where PKM = project knowledge management and PMO = project management office) that ‘The most important factors influencing PKM-effectiveness are knowledge culture, the institutionalization of multi-project management/PMO, ICT support, management support and processes of PK’ (2011, p844). It would appear at a superficial level that innovation adoption and adaptation should be a simple copycat process with those that follow innovation being described variously as innovators, 399

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early-majority adopters, late-majority adopters and laggards (Rogers, 2003). However, while some writers on the concept of KM/OL claim that knowledge is impossible to manage because it is wrapped up in human experience and sense-making, the transfer of knowledge through collaboration and joint problem-solving is acknowledged in a recent review (Moehler et al., 2018). The key elements needed in effective knowledge transfer and adaptation are understanding the context of that knowledge, and how to apply lessons learned within a similar but inevitably different context, because no two projects or situations are exactly alike and no two people share the same mind. The relevant question relating to this chapter is what influences people, groups and organisations to fall within those categories? From the above discussion and content to be found in other cited chapters of this book, we can see that a factor such as the ‘stickiness’ of knowledge about an innovation is critical to the way that innovation may be diffused with project groups or across organisations. This in turn is governed by the environment in which innovation may occur, and, in particular, the individual and organisational culture, as well as institutional arrangements to encourage creative ‘free-thinking’ or ‘out-of-the-box thinking’ (Leonard-Barton, 1995; Leonard and Straus, 1997). A no-blame workplace is also important, where it is safe to make mistakes as long as they are learned from through open reflection and discussion, as observed on a case study alliance project by LloydWalker et al. (2014); along with contractual and institutional arrangements that make sharing innovation the norm (Love et al., 2016). Reducing knowledge stickiness and building a team’s dynamic capabilities to be adaptive, resilient and intuitive in how to interpret context and modify and adapt existing knowledge (Teece, 2013; Davies and Brady, 2015) appear to be crucial. We now will provide examples and discussion about how innovation has been nurtured and sustained within an IPD context. In the next section we discuss how the case study of a program alliance was established to transform a somewhat typical ex-government instrumentality into a dynamic, innovative organisation and how that transformation took place. This will be followed by another section that discusses how innovation diffusion took place on an AU$8 billion+ alliance program of works in Melbourne.

Innovation diffusion and KM/OL at Barwon Water In this section we focus on innovation diffusion triggered by a perceived need to improve processes and practices to avoid rework due to faulty workmanship, design issues and the unintended consequences of design and delivery decisions. The Barwon Water Alliance was established in 2009 to deliver 129 water infrastructure projects, comprising pipelines, water treatment plants, pump stations, tanks, storages and channel works throughout a regional area of Victoria in Australia. After an extended period of drought in 2008/2009 and significant growth in the region, the demand for water increased. As a result, there was a need to upgrade existing infrastructure and construct additional infrastructure to meet this demand. The alliance team was comprised of three organisations: the program/projectowner participant (OP) who was responsible for delivering water to its customers over an area of 8,100km2 to five municipalities and 275,000 customers; and two non-owner participants (NOPs) – an engineering consultancy who provided design, environmental and stakeholder management expertise; and a contractor who provided commercial and construction capabilities. The program of works to be undertaken was AU$375 million over a five-year period. At the onset of the alliance, a set of core values were established – Safety, Teamwork, Respect, Innovation, Vibrancy and Excellence, which were later aligned to a set of key result areas (KRAs) (e.g. environment (non-compliance criteria) 15%, delivery 30%, functionality 15%, regional benefit 15%, people and well-being 15%), which had a total of 21 key performance indicators (KPIs). In 2014, the program of works was transitioned to the OP, as it was always 400

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intended that during the alliance’s life, both the engineering consultancy and contractor would provide the knowledge and capability to enable them to continue with their projects alone. In 2011, approximately two-and-a-half years into the five-year program, the Alliance Leadership Team (ALT) and Alliance Management Team (AMT) became aware that a number of projects were incurring unnecessary cost and time delays due to rework and issues relating to safety. This coincided with the first batch of projects, which reached the end of their two years ‘Asset Proving Period’ (i.e. defects liability). An average of a three-week delay per project was being experienced due to rework issues, which at the time equated to in excess of AU$1 million in costs to the alliance alone (e.g., management and supervision). Over the life of the program, all things being equal, the costs that would have been incurred by the alliance were estimated to be in excess of AU$3 million. The costs borne by contractors due to this rework were estimated to be at least five times this estimation. It is noteworthy that the costs of rework did not vary between the project types. Yet the number of product quality non-conformances (NCRs) formally raised and reported by contractors was zero, although it was clearly known this was not a reflection of reality, due largely to the fear of blame and damage to the organisation’s reputation. Moreover, rework was deemed to be a ‘norm’ and thus ‘business as usual’. It was not until the contractors became aware of the problem that they began to work with the alliance to prevent its future occurrence. The ALT and AMT knew that there were quality issues as a result of their inspections, but at the time they felt the alliance lacked the systems, contractual power, relationships and culture to support and enable the contractors to identify errors and mistakes, which could lead to rework. A concerted effort had been made within the alliance to report safety and environmental incidents, which improved over time, but the existing processes in place were inadequate to equally

Figure 18.2  E  xamples of water infrastructure projects delivered by Barwon Water – (a) Pipeline   (b) Channel works

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capture quality assurance (QA) and potential rework. Furthermore, no effort had been made to account for rework, as there was a perception that it was a result of poor work practices and that it demonstrated failure. The alliance recognised that safety was being jeopardised as a result of a number of rework incidents. On average, ten incidents/near-misses (of all types) were occurring each month, particularly during the months of November and December where 30 incidents/ near-misses occurred due to several issues, such as fatigue and stress. In fact, it was propagated that the likelihood of a person being injured while attending to rework was nine times greater when compared to normal work activities. This was of a great concern to the alliance as it was contradictory to their underlying value system that had been developed at the onset of the project. Responsively recognising the problem at hand, the ALT and AMT, collectively with the NOP, embarked on a targeted safety and rework-improvement program to alleviate significant Safety Quality and Environment (SQE) issues that had been consistently emerging.

Implementing cultural change It was recognised by the ALT and AMT that the culture of the alliance needed to change and that a learning climate needed to be created to combat the rework and safety issues that were repeatedly occurring in their projects. The alliance had no clear strategy in place to address rework: it had simply not been recognised. In fact, when rework did occur, the Alliance Manager observed that that the mindset of people changed drastically and they became demoralised. At the time when rework was identified as an opportunity for improved performance (e.g., cost, time and team satisfaction), the ALT and AMT observed that their initial KRAs (each had three to four different KPIs) were not aligned to alliance values and the nature of work that was required. A total of 21 KPIs had been developed to measure performance, which the alliance team found difficult to understand and implement. As a result, the original 21 KPIs were reduced to eight, which the alliance team was able to comprehend and consider tangible. The revised KPIs for each KRA were: 1 2 3 4 5

Delivery (40%) with earned value with a weighting of 40% and schedule 60%. Functionality (15%) with a weighting of 100%. Regional benefit (15%) with a weighting of 50% for subcontractor performance and legacy panels 50%. People and well-being with a weighting of 33% for value-add and 67% for OP transition. SQE Risk Management (15%) with a weighting of 100% for Positive Performance Indicator Frequency Rate.

Values were redefined and aligned to the performance objectives that were established. For example, safety was aligned to ‘no harm’ (i.e. the creation of mindset damage and rework can be prevented), and delivery to ‘excellence’. To improve the alliance’s absorptive capacity, awareness and accountability became central features of its ability to acquire and transfer knowledge. To be able to learn and instigate process improvements it was essential that individuals were able to confidently answer three questions: (1) What am I accountable for? (2) What are the key risks and controls? (3) How do I know the controls are in place and effective? A number of initiatives were established to build the capacity of the alliance under each of the questions. For example, under question one, paper-based manuals were replaced with a customised series of web-based process flowcharts to improve process clarity. In addition, to enhance individual accountability, a ‘Code of Conduct’ was established through team consultation. All individuals working within the alliance were required to commit a ‘no-harm’ vision (Figure 18. 3). In addressing question two, behavioural-based inductions, SQE leadership 402

Code of Conduct Working for the Barwon Water Alliance means you will be part of a team committed to the vision of “No Harm”. “No Harm” is a belief that harm, damage or rework can be prevented. To achieve this requires each of us to take personal responsibility for our actions and hold each other accountable. Each of us will operate under the following SQE Fundamentals: 1 2 3

Assess the risk; Develop a plan and follow it; Only do what you are competent to do

By signing this Code of Conduct I commit to working in accordance with the SQE Fundamentals and understand the consequences for committing any of the actions on the back of this card. Signature Name Date This Code of Conduct must be held in your Start Card pack at all times. Actions that will not be tolerated include: CATEGORY

ACTION

Personal Responsibility

− − − − − − − − − − − − − − − − − − − − − − − −

Plant and Equipment Excavation and trenching

Heights

Lifting/Loads Traffic Confined space Electrical Isolations Asbestos Hot Works Environment

Working under the influence of alcohol and or non prescribed drugs Repeatedly or deliberately not wearing PPE Repeatedly or deliberately not completing a Start Card Not immediately reporting an incident or injury Signing check sheets falsely or without understanding them Disregard any of the three SQE Fundamentals Operating plant/equipment without competency Operating plant/equipment that is not fit for use Digging without an excavation permit Being in a hole > 1.5m with no benching/battering/shoring Being outside a shielded zone of an excavation Working at heights without fall protection Working near an exposed edge without protection Climbing scaffold, formwork or other structures Being under a live load or slewing over person(s) Slinging a load without dogman/rigger qualifications Working near traffic without suitable traffic controls Unauthorised entry into a confined space Doing electrical works without required qualifications Removing danger tag/lock without authorisation Handling asbestos without required qualifications Hot works on a total fire ban day without a permit Damaging protected environmental areas Disposal of water or waste to an unauthorised location

Anyone committing the above actions will be issued a site warning. Anyone found to have blatantly committed one of the above actions will be immediately removed from site. More than one warning will result in immediate removal from site. All persons removed from site will be managed in accordance with their employers policies and procedures.

Figure 18.3  Code of Conduct: ‘No harm’

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training, key-risk-area training and team-based planning were initiated. Under question three, a checkpoint and surveillance regime was put in place to ensure that effective controls had been allocated. For example, throughout the design and tendering phases, sign-off from SQE, operations and construction teams were required to ensure they were satisfied with the design and proposed delivery method. Moreover, prior to construction, a kick-off planning meeting would be held for each project to review its strategic risks. During construction, commission and handover a series of inspections, audits, and reviews – all essential processes for knowledge acquisition – were regularly undertaken to ensure compliance and process improvements. Information from these inspections and audits were collated in real time via an iPad/web-based system providing immediate trends for monitoring at the program and project level and, where required, the issuing and tracking of corrective/preventative measures

Learning climate The focus on creating awareness and accountability provided clarity about what people had to do to ensure the ‘no-harm’ mindset that was created translated into experiential learning. In addition, people were engaged and became part of the solution in conjunction with a genuine intent to understand people’s challenges and to allow roles to be framed within the context of the climate. An explicit feature in creating the new climate was ‘learning’ through interaction and participation between the alliance and its contractors. Particular emphasis was placed on feedback and knowledge acquisition derived from work processes, information, reflection and discussion between the alliance’s members and its contractors; a distinct shift away from singleloop to double-loop learning occurred. The ALT and AMT actively promoted the principles embedded within an alliance, such as trust, honesty and cooperation, to engender an error-management culture (i.e. an organisational culture that supports effective and productive error handling). The same level of promotion to safety was also afforded to rework, that is avoiding having to rectify faulty work or to demolish and rebuild in order to gain access to areas. The development of this culture was a major challenge for the ALT and AMT, which required changing existing behavioural norms and values that had already been established within the alliance. To enable an error-management culture, the adopted model for change focused on changing behaviours, its climate, providing motivation and re-examining the way performance was being measured. Not only did the ALT and AMT provide awareness to the NOPs of the opportunities that would be afforded by a cultural change, they also actively engaged their contractors. To achieve this aim, the ALT and AMT recognised that they needed to demonstrate their commitment to change by providing additional resources to contain and prevent rework.

Learning from lessons learned Learning formed the nucleus of the alliance’s new culture, which was championed by the design manager. The journey to reduce incidents, and the need to rework, required the alliance to develop systems that could dynamically capture, in real time, issues that contributed to them, as well as other events, so the project team and contractors were aware of issues that may arise in other projects to be constructed. To support continuous improvement, a lessons-learned system was developed and integrated into the alliance’s Compliance Management System (CMS), which was implemented as part of the new change initiative. The lessons-learned initiative they developed provided a systematic process of collecting, disseminating and institutionalising lessons learned from projects and was incorporated into the process architecture of the alliance. 404

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Figure 18.4  Lessons-learned system work

The lessons-learned process is presented in Figure 18.4. Lessons learned were acquired from a variety of sources, such as functionality assessments and compliance reports and informal observations and experiences of individuals that had been ‘explicitly’ documented. Standing ‘lessons learned’ agenda items on project meeting templates also provided a platform to capture ideas while they were still fresh in the team’s mind. It was recognised that having the project closeout meeting as the only formal place to capture lessons learned was not optimal, since it would often be months or years since relevant learning events had occurred, and key project staff may have moved on to other projects. A lesson-learned register, a macrodriven spreadsheet, was accessible to all project team members and all were encouraged to participate in the initiative (Figure 18.5). The register also acted as a ‘value-added’ and innovations register, where the costs or savings from implementing actions were documented. The alliance recognised that there was often crossover between a lesson learned, an innovation and a ‘valueadd’ provided by the project, all of which had KPI drivers to ensure they were captured. The process of entering such data needed to be seen as simple and efficient by employees, with no need for duplication of data across different registers. The transparency of the lessons-learned system provided the project team members with the confidence to explore and challenge existing knowledge (e.g., specifications and work methods) and propagate innovative ideas through the OP’s Innovations Catchment Program (iCatch). Project team members were encouraged and rewarded to input lessons they had encountered in their daily work into the register and the iCatch program. When a project was completed, three key lessons were identified, summarised and distributed to all alliance team members and contractors (Figure 18.6). A full list of lessons learned in the register for that project was also issued to project team members and nominated Lessons Learned Champions (from each alliance department) to review and identify specific actions to improve and prevent reoccurrence of an issue. A period of 48 hours was given 405

Figure 18.5  Lessons-learned and innovations register

Top Three Key Lessons Learnt R1026 – Armstrong Creek Southern Precinct Dual Pipe Scheme 1 Contract Interfacing This contract was separated into four works packages. If dealing with multiple contractors it is important to ensure isolation can be maintained between contract interfaces for pressure testing and commissioning. A Water Infrastructure Control Register was established to manage the interfacing between contracts. 2 Pipe Installation Methodology Contractor’s method of installing and joining pipe needs to be checked against manufacturer’s installation requirements prior to approving the methodology. The contractor undertook numerous reworks due to pipe failing the pressure test as the MSCL pipe wasn’t ‘rammed home’ correctly. The lubrication was also not being applied to manufacturer’s requirements. 3 Contract Packaging Decision was made to split the Scope of Works into four contract packages to provide flexibility in delivery timeframes and increase competition between tenders. By packaging works to suit the capabilities of different types of contractors, e.g. bored sections issued as a separate package, enabled more competitive pricing. The Top Three Lessons were nominated by the Lessons Learnt Workshop Team. There were a number of other Lessons on this project. Our Systems Champions are now working on including these Lessons and others identified by the team into our Systems and Tools∗∗ ∗∗

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Top 3 Key Lessons Learnt W1209-13th Beach Golf Links Water Supply Improvements-Feeder Mains 1 Tender Evaluation. A “new player” contractors tendered a low cost for the project. Although the tender met all the requirements during tender evaluations, the contractor’s performance and management standard was poor. Stringent assessment is necessary for new tenderers including thorough reference checks, review of CVs, differentiating between site experience and office based management, and provision of construction methodologies and site layout set ups. Additional training and induction at the beginning of the project should also be considered. 2 Existing Services. A new gas main was installed between the original DBYD enquiry during design, and the commencement of construction. A decommissioned BW sewer was not identified and struck during boring. In a developing areas eg. Armstrong Creek, or if the project is due to be “put on the shelf”  for a number of months, each asset owner identified should be contacted separately to confirm that the DBYD information is current. Decommissioned assets should be included on the drawings and in exposure investigations. 3 Contractor Representative Changes. A number of changes in the contractor’s site supervisor occurred throughout the project.  The changes affected the project’s continuity and productivity. Problems occurred mainly due to the lack of experience of supervisors, including a trenching safety incident. Stringent assessments need be completed at the tendering phase and changeover to ensure that the nominated representatives has the required levels of site experience and project management skills. The Top Three Lessons were nominated by the Lessons Learnt Workshop Team. There were a number of other Lessons on this project. Our Systems Champions are now working on including these Lessons and others identified by the team into our Systems and Tools∗∗ ∗∗

Figure 18.6  Example of top three lessons learned

for the review and for actions to be entered into the register. The register prompted for controls to be put into place through updates to systems, such as design guides, standard specifications, standard drawings, inspection/audit checklists, process-flow chart/forms, toolbox topics, construction guides, training guides, or simply as a discussion topic for a following meeting. In each case, a person was nominated to be responsible for the action and a due date was provided. Earlier attempts at establishing a lessons-learned implementation process were unsuccessful for a variety of reasons, which included: •• ••

A register alone to capture ideas was insufficient. Even though employees were prompted to review the ‘Lessons Learned Register’ at key points of the project-delivery process to check for relevant issues, this rarely occurred. The register originally had a simple field for follow-up action. However, it was found that these actions were never completed, as there was no simple/automated method of 407

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informing the responsible person of their action from a spreadsheet, nor any reminders of outstanding actions. The manual re-entry of action data was a time-consuming administrative task and so the system failed. In addition, employees were not held accountable for any actions entered into the ‘Lessons Learned Register’, and so other tasks took priority. The real shift in closing the lessons-learned loop occurred when an automated method of merging the actions from the ‘Lessons Learned Register’ with the central action tracking register in the CMS was devised, from which all employees received regular reminders of outstanding actions. From these highly visible action lists, management drove actions and shifted their subordinate’s priorities based on due dates and fear of a red ‘Overdue’ status. The importance of management support for employees to capture and implement lessons learned should not be underestimated. Employees were encouraged and permitted to make time to implement the procedural/technical changes resulting from the lessons-learned outcome actions, or again, the loop would not be closed and the system would fail. Ideally, if lessons learned could have been entered directly entered into the OP’s central application or system for managing actions/tasks, then the complex middle step of action-data transfer between systems could have been eliminated and the process streamlined. A further key factor was the allocation of employee(s) as ‘champions’ for the process, who were responsible for organising project closeout/lessons-learned meetings and carrying out associated administrative tasks. Personal lessons learned related to KPIs for these champions; staff and managers were also strong drivers and motivators to keep the processes moving. Regular face-to-face meetings and workshops were also held to disseminate experiences and reflect on issues that had occurred. Consequently, tacit-to-tacit knowledge was shared, which formed the building blocks for creating a contextual backdrop for the lessons that had been acquired throughout a project. Through this process of socialisation, tacit knowledge became explicit, as individuals were able to explain knowledge and know-how. The alignment of the CMS with the lessons-learned system provided the alliance with the ability to ‘close the feedback loop’, which gave them the impetus to embrace learning. Moreover, it facilitated the sharing of responsibility for maintaining the process of ‘getting’, ‘giving’ and ‘learning’ to be undertaken in a proactive rather than a passive manner. Thus, learning within the alliance was embedded in a reciprocal process that emphasised mutual and equal balance between knowledge acquisition and sharing.

Innovation diffusion and KM/OL on the Level Crossing Removal Program Another example of a program alliance that has a specific focus on innovation diffusion is the LXRP in Melbourne, Australia. One problem with project innovation is that innovations are seldom successfully diffused from one project to other projects because the team composition on one project is usually different on the next project, and indeed people tend to come and go on any project so there is a constant churn of people within a string of temporary organisations (Lindner and Wald, 2011). However, as Schindler and Eppler (2003) propose, a process can be followed to contain contextual information to assist in sense-making for adaptation of knowledge and innovation. The LXRA is a program of work to remove 50 rail crossings and to refurbish and redevelop stations, with at least 20 of these to be completed by 2018. Rail and road grade separations include cut and fill to permit rail track to pass underneath existing road grade as well as ‘skyrail’ structures to build rail sections above roads. The rationale for the project is primarily based on 50 existing rail crossings being identified as dangerous and highly congested, resulting in severe 408

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delays to road-traffic flow, as well as wanting to improve the city’s rail operational performance (Victorian State Government, 2017a). The project has a target program cost, as at July 2017, of AU$8.3 billion (Victorian Auditor-General’s Office, 2017, p42). It is managed by the Level Crossing Removal Authority (LXRA) as a program of 11 program-alliance packages, each comprising several level crossing removals, rail grade re-alignment and the development of new or renovated stations with a number of owner, design and delivery participants engaged in each alliance. There are some overlaps of organisations being participants in several alliances and memberships of ALTs, which extends some opportunities for knowledge and lessons-learned transfer between program alliances as well as opportunities for participants within each alliance to transfer knowledge and lessons learned across projects within a program alliance. A stated program objective is that LXRP shall encourage innovation, continuous improvement and its diffusion within the LXRP as well as to industry and the wider community (Victorian State Government, 2017b, p4).

Innovation diffusion initiative 1 – making innovation diffusion a KRA One of the more remarkable innovations developed for the LXRA was a twofold strategy to encourage innovation development and diffusion. First, motivation for project teams within the program to diffuse knowledge from lessons learned both within their alliance program and across the LXRP has been specifically addressed through the alliance selection process, that requires alliance proponent syndicates to demonstrate their capacity and performance on innovation and its diffusion, but also specifically through a KRA and KPIs that measure and reward innovation and its diffusion. As one of the LXRA alliance managers (AMs) noted: There is innovation, KRA1, and 1.1 is ideas, 1.2 is execution of those ideas, and 2 is continuous improvement and efficiency. So, that one is about us getting more efficient in how we deliver them in demonstrating cost improvements from package to package to package. . . . we’re measured on idea generation, so, are we generating new ideas and ways of doing things? And, we’re also measured on how well we implement those ideas and how well we share those ideas across the program, and others get the benefit of them. As an example, if we come up with a new way to pour concrete or something, and we reckon it saves us 2% per job, if we share that with the other alliances and they also save 2% per job, we’re rewarded for that. These KRAs and the KPIs that measure them provide the incentive to innovate and diffuse innovation, as illustrated in the quote from the LXRP-1 interviewee. The governance arrangement provides the leadership message about the importance of innovation and its diffusion as well a mechanism to reward all alliance participants in that alliance. The shared incentive encourages and rewards all participants in the alliance, and the design and delivery NOPs through the gain-sharing on above-expectation KRA results. The LXRA also shares in the benefit through continuous improvement across the alliance program packages.

Innovation diffusion initiative 2 – embedding the project operator in the alliance team A second innovation that has been incrementally improved upon and diffused is through the involvement of two key operator and project-owner alliance participants that ultimately report 409

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to Public Transport Victoria (PT Key Performance Indicators). The rail and road system is government, owned and operated through government authorities. The road system is managed by VicRoads and the rail system operations franchisee is Metro Trains Melbourne (MTM). The LXRA chief executive officer (CEO) chairs the steering committee for the LXRP, with MTM and Vic Roads making up three of the steering-committee members, which also includes four other transport government strategy and operations authorities to cover the transport interests for the state of Victoria as a whole (Victorian Auditor-General’s Office, 2017, p26). Both VicRoads and MTM are involved at this steering-committee member level but also as ALT and AMT members with teams of their own operationally involved in the alliances. This provides a broad range of contact points as well as leadership roles to facilitate innovation diffusion as part of continuous improvement. The people from VicRoads and MTM can and do act as a knowledge conduit across the alliance projects within and between program alliances as well as disseminating lessons learned within their home organisation, largely through social interaction but also as collegial professionals. Not only is the project operator embedded at the ALT and AMT levels but is actively engaged in the alliance team at the project-delivery level. Of particular note is the active nature of VicRoads and MTM teams ‘on the ground’. They are considered as, and work as, members of the alliance team and are embedded in those project teams providing day-to-day input. This involvement may be unique and it has not been reported upon, as far as we know, elsewhere. The nature of their involvement provides not only an innovation in itself but could be considered a radical process innovation. One example we provide is from an interview with a senior executive from VicRoads who has been a project director as well as an ALT member (LXRP-5). He explained some of the roles undertaken by his team on alliance program package one: The other thing that VicRoads brings to the table is we’re the roads corporation under the Road Management Act and so we can bring the authority to manage traffic, change speed limits and alter traffic lights and all that sort of stuff. I had people working in that package one alliance that had the approval to sign off on all the trafficmanagement plans that were required to facilitate the works. So for trucks entering and exiting the site and all the traffic control that needs to happen and is associated with that, people in the alliance could sign off on all of the traffic management that’s required to go with that they’ve got the legislated approval to do that, authority to do that. Whereas the level crossing authority don’t have those, doesn’t have that ability to do that, they actually have to outsource that to VicRoads on their projects and get VicRoads people to sign off on a traffic-management plan. So when we’re embedded in the alliance we’ve got staff on site who’ve got the delegation to be able to sign off on all that. And on a project like that that’s a daily event, there’s traffic-management plans every day being created to change something or allow access into the site or out of the site or slow the speed limit because we’ve got roadworks alongside the site or whatever the case might be. So there are traffic-management plans being approved every day. The MTM member of the ALT we interviewed (LRXP-4) had this to say about his onthe-ground team involvement. The following relates to an innovation that involves direct rail authority issues that require the innovation to be approved as being safe for the rail network operating team as well as the travelling public. Rather than being external to the innovation development and diffusion process, and perhaps overly cautious, or reactive or even obstructive, the involvement of the MTM specialist expert members of the alliance team actively engages 410

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in helping work out a solution that meets the regulatory requirements as well as contributing towards continuous improvement. LRXP-4 said: from the moment an idea is born we sit beside either the Melbourne Rail Authority, LXR Authority, PTV [Public Transport Victoria], and say, ‘Right, you want to build X, well it’s on the rail corridor, it’s right beside our passengers, let’s talk about how we can do that,’ then we develop up that under the framework that we have with two authorities and PTV. So we help them develop up that scope of work, which is naturally implicit of getting rail operator’s input so that it’s safe . . . that we’re happy with this so far, the methodology they’re proposing. This illustrates an attitude and behaviour supportive of innovation. An interesting outcome of the interaction of the operator with the design, delivery and project-owner team is that innovation introduced from external sources and, indeed, partly internally from other projects within the program alliance, is that we see a process of co-invention. In a paper discussing how ICT innovations are adapted by those receiving the innovation initiative, Bresnahan and Yin (2017) argue that a product, process, service or other form of new idea being introduced is not of itself an innovation but the manner in which it is adapted is the true innovation. The process may be understood using institution theory (explained in several chapters of this book: Chapter 2, for example). Three critical ‘pillars’ of the theory are the regulative processes, the normative processes and the cultural-cognitive processes (Scott, 2014). Applying this theory to the co-invention process we can interpret it a process whereby: 1

2

3

An innovation is mooted: product, process or service. This represents the regulative pillar in a sense that there is an expected guideline, approach or set of rules on how to adopt the innovative idea. The introduction of the ‘new idea’ does not occur in a vacuum. The norms and workplace culture of the group ‘receiving’ the idea shapes how useful the idea may be perceived to be or how it may best be applied. These ‘norms’ filter the basis of which that idea may be adapted to suit the situated norms. The way that the idea is made sense of, within the bounds of the situated norms, determines how that idea is adapted rather than adopted. This is where the cultural-cognitive processes shape and determine how the idea is adapted in practice.

Co-invention results in empathic design (Leonard and Rayport, 1997) through negotiating the way that a new idea may be used, so that the user’s value proposition is addressed and the idea is developed to fit existing constrains and feasible adaptations to existing constraints. The example above illustrates how the operator can ensure a fit with the acceptable interpretation of government legislation while shaping how the idea may fit design and delivery practicalities. This cross-disciplinary approach, especially including the operator, presents a significant innovation in itself. All parties share and co-create new knowledge about how the idea may be applied within the prevailing context.

Innovation-diffusion initiative 3 – sharing knowledge and innovation across the program A third innovation that the LXRP exhibits is the way that the Level Crossing Removal Authority (LXRA) structured its governance to capture innovation and to more effectively diffuse it. In an earlier chapter section on KM and OL we discussed the need for lessons 411

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learned and innovation diffusion to be a person-to-person (P2P) exercise mediated through the person-to-environment (P2E) situation. The latter defines the context. People become cognitively aware of environmental constraints and enablers more effectively so that they can document them. P2P engagement enables a dialogue to take place in which framing contexts arise and are played through. People all bring different insights, biases, perceptions and experiences to a dialogue about a situation. Every person’s life is composed of different events because no two people, even twins, lead identical lives. Thus, when engaged in dialogue, people struggle to understand what they are faced with and argue through the way they see things with others in a compare-and-contrast manner until some sense of common-ground consensus is achieved and an understanding of how to deal with minority views. Effective dialogue results in effective contextual understanding. P2P exchanges help determine how a ‘good idea’ may be replicated or adapted to a different context. The LXRA established what it termed the joint coordination committee (JCC) that operates across the 11 program-alliance packages. This committee works at several levels. Each package-alliance manager (AM) attends the meetings each month with the objective of discussing how their projects and packages of projects are going. Insights are shared, contexts are explored and discussed and any lessons learned and new innovations are discussed at length. This is done openly: there is no competition between the AMs in terms of winning new contracts on the LXRP because all packages have been let and so there is no reason why one AM should hold out valuable knowledge and insights from other AMs. Furthermore, as discussed earlier in this section about initiative 1, the LXRA set KRAs for the diffusion of innovation, so there is a financial incentive through KPIs for innovations that positively impact performance to be used. If AM-1, for example, convinces AM-2 or AM-3, etc. that one of AM-1s innovations is of value, then they will adopt or adapt it and AM-1 will gain a financial incentive based on the KPIs. Thus, through the LXRA’s governance and alliance-agreement processes, innovation diffusion is made more attractive and likely to be adopted. The JCC also has other levels of alliance-participant meetings; there is a safety crossprogram group and other specialty groups that all focus on sharing insights, perspectives and lessons learned. We argue that this represents a significant process innovation. The LXRA have provided the regulative processes, the normative processes and the cultural-cognitive processes (Scott, 2014). The regulative process comprises the alliance agreement KRA for innovation diffusion and the JCC process. The collaborative norms are demonstrated by the low knowledge, power and information asymmetries and the general alliance ambience (Walker and Lloyd-Walker, 2014). The cultural-cognitive pillar is demonstrated by the nature of the P2P and P2E discourses taking place.

Innovation diffusion and KM/OL – other IPD-like projects Our third example of IPD-like situations, where there is evidence of and explanations of how knowledge sharing may be achieved, are drawn from studies on London’s Crossrail program of works in which a concerted effort was made to encourage innovation diffusion between elements of the supply chain through incentives and by creating the means for ‘innovation champions’ to promote awareness and diffusion of innovation (MacAulay et al., 2018). Additionally, these studies reported on how attempts were made to transfer innovation-diffusion processes across programs such Heathrow T5, London Olympics and the Thames Tideway tunnel. Processes such as bridging (e.g., a targeted search for innovative practices and products), engaging (e.g., use of incentives and procurement practices that encourage collaboration and 412

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innovation diffusion), leveraging (e.g., developing mobilisation strategies to entice partners in the project to share knowledge and insights) and exchanging knowledge about innovations and how best adapt them (e.g., developing an ecosystem of knowledge trading and transfer) were identified and examined by Davies, MacAulay, DeBarro and Thurston (2014). Readers may refer to these cited sources to learn more about how learning and knowledge was diffused in and through practice.

Discussion and conclusions Past studies that we have been engaged with on project alliancing highlighted the difficulty of knowledge transfer from one project to another using codified or technological means. The P2P approach appears to function more effectively on program (rather than project) alliances, as people on program alliances tend to have a more permanent relationship within teams meaning that the churn of people moving from one project to the next is slower and allows greater opportunities for P2P knowledge transfer. This chapter addressed the question, ‘How can the construction organisational delivery model enhance the effectiveness of innovation diffusion?’ We started the chapter with a section on the conceptual underpinning of innovation diffusion. Important concepts that apply to IPD, such as the nature of ‘sticky knowledge’ were introduced and explained, together with a brief outline of KM and OL concepts, with an emphasis on experiential learning about how OL may operate in practice. Figure 18.1 illustrated the flow of knowledge and learning between individuals, groups and the organisation in general. We then provided concrete examples of innovation diffusion within an alliance and other IPD-like contexts. Previous studies of alliancing and IPD have inadequately addressed innovation diffusion by not explaining what processes were adopted to enhance and enable diffusion and OL. We provided cutting-edge examples of innovation diffusion and OL on two program alliances in Australia. The Barwon Water example provides concrete examples of innovation diffusion and the application of lessons learned on a water infrastructure project. The second set of examples from the LXRP identified three innovation-diffusion initiatives. We also provided some insights into how innovation diffusion was encouraged and managed on some IPD-like programs or works in the UK. Clearly, in line with institutional theory and models of experiential learning, we can conclude the following in answer to this chapter’s research question. The project-delivery model that best enhances opportunity for innovation diffusion to enable an appropriate fit between the context and the new idea depends upon: 1

2

3

A regulatory process that supports innovation and its diffusion, such as a form of contract, but also how governance arrangements address both collaboration and integration. We saw examples of this through organisational-linking arrangements, such as the AMT and ALT and also the JCC. Other governance arrangements include stipulated and clear KRAs with KPIs that are used effectively to incentivise innovation diffusion. A workplace that support cultural mores of knowledge exchange, the freedom to experiment, organisational slack to allow innovation champions to emerge, a no-blame culture and respect for expertise. This is consistent with a workplace characterised by low power, information, and knowledge asymmetries. A sufficiently capable and willing, intellectually curious and well-trained team, with each participating discipline in an alliance possessing critical-thinking skills, independent resilience and the ambidexterity to confidently engage in dialogue to interpret the regulatory 413

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4

process in light of the mores, values and culture of the project teams, so that they can bridge, engage, leverage and exchange knowledge. There needs to be continuity of the team’s human-capital knowledge base, so that the P2E knowledge gained and P2P dialogues capture vital contextual insights meaning that innovation is appropriately diffused and that it avoids ideas being misapplied (not matching the context) that may produce unintended adverse consequences.

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19 IPD GOVERNANCE IMPLICATIONS Bjørn Andersen, Ole Jonny Klakegg and Derek H. T. Walker

Introduction Interest in project-management (PM) governance has grown steadily over the past decade. Turner (2006) introduced, over a decade ago, the role of governance (based on a definition of corporate governance) in the development of a theory of PM governance. Arguably, this was at the cusp of an emerging perspective of the importance of governance in understanding how projects are delivered. This whole area of how projects are governed provides a good starting point for the emerging discourse about how PM is successfully delivered, and how governance and governmentality may apply to integrated project delivery (IPD) projects compared to traditional project delivery approaches. Müller (2017, pp12–13) differentiates the concepts of project governance and governmentality. He notes that governance may be seen as a structured system of controls, a set of formal and informal processes and a set of relationships that defines and steers people between and across boundaries, such as within and between organisations. He contrasts governance with governmentality defined (Müller, 2017, p20) as ‘the mentalities, rationalities, and ways of interaction, chosen by those in governance roles to implement, maintain, and change the governance structure.’ Thus, governmentality has more to do with the culture, norms and mindset of people concerned with governing projects both from the perspective of those that develop governance arrangement and how they expect these arrangements will be implemented, and those that are governed. The governmentality concept fits with Scott’s (2014) three pillars of institutional theory concept. Scott argues that the way that institutions enact governance arrangements may be explained as being influenced by not just the organisation’s set rules and regulations but by the operational culture and the way that this culture interprets the meaning of the rules, etc. Scott identifies a Regulative pillar of rules, regulations and officially prescribed routines that are legitimised and sanctioned by the prevailing authority of an organisation. The Normative pillar is characterised by the culture of the organisation that sets norms and behavioural expectations. Organisations are not mono-cultural and so there will also be sub-cultural influences or logics based on, for example, professional associations’ standards and ethics guidelines or other workplace traditions (Schein, 1996). The third pillar, the Cultural-cognitive pillar, represents the way that people make sense of and agree on how to act upon regulations given their cultural norms. Thus, the concept 417

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of governmentality extends our understanding of governance beyond merely being a set of codes, regulations and prescriptions. Clegg, Pitsis, Rura-Polley, and Marosszeky (2002) report on research about an IPD project, an alliance that was part of the Sydney Olympics infrastructure investments. They discuss in detail how the traditional business-as-usual model of governance was modified, adapted and novated on that alliance project. They show how the project’s governmentality moved from a powercentred authoritarian interpretation of how alliance participants should conduct themselves, towards acceptance of a more liberal interpretation of how to interpret governance arrangements. This freer but more tightly self-disciplined mindset was achieved by observing the spirit of the project aims and strategy rather than written prescriptions, while substituting new measures, means and routines providing the boundaries and guidance needed to support responsible and responsive collaboration. In Chapter 2 of this book, the Collaboration Framework is described in detail. This identifies the need for a joint governance structure as its second element and incentivisation as its twelfth element. These two elements relate to governance. However, the framework also identifies other behavioural and process-related governmentality elements. This chapter aims in part to provide a more in-depth background for us to better understand the Collaboration Framework from the perspective of the role played by governance and governmentality in IPD projects. What do we mean by the term ‘governance’? Turner’s (2006) early paper described one governance theme that emerged around structures, formal enablers of governance hierarchy, rules and regulations, and contractual arrangements that define what is to be delivered, etc. He identified another theme related to stakeholder legitimacy in influencing how a project may proceed, including roles and responsibilities and legitimate influence by the project stakeholders. Stakeholders comprise sponsors, owners or stewards, and the project team as internal stakeholders, and that of external stakeholders such as society, government agencies, the end-user/ beneficiary and other interested parties who feel they have a stake in a project or what it may deliver. Turner also drew attention to the special feature of governance of a project in terms of its life-cycle, as opposed to a focus on an organisation or corporation. This introduced questions about how projects are initiated and how they emerge from ‘value desires’ to plans of action and then to the project outcome. All stages or phases may be seen to be governed or guided in some way. His third theme is useful for us to pursue in this chapter: the way governance impacts upon project delivery and the way that projects may be resourced, and the legitimacy of how that resourcing is agreed upon and managed (including issues of monitoring and control). This chapter focusses on two phases of governance at the front end of projects, as well as operational-process aspects of IPD. Considering the Collaboration Framework introduced in Chapter 2 as a basis for structuring this chapter, we pose a question to be answered by this chapter: How do clients ensure that IPD projects are appropriately governed, so that the briefing process facilitates the project being the ‘right project’ and that the project is subsequently effectively and appropriately delivered? This question is disaggregated into the following two questions: 1 2

What are the organisational structures and institutional pillar characteristics that provide the structure and culture for effective project/program governance? [Governance] What mechanisms and processes ensure that these governance intentions are enacted and that in practice IPD project participants are made clearly accountable? [Governmentality]

This chapter specifically explores governance and governmentality at the project front end, through gateway processes. We also investigate how IPD projects operationally manage the design and delivery stages through governance structures such as an alliance management team 418

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(AMT) and an alliance leadership team (ALT) and how various tools, techniques and processes are used to govern project delivery to minimise the impact of surprise events. We also highlight governmentality aspects that are relevant to IPD style projects.

What do we mean by governance within an IPD project context? Taking and adapting the concepts of governance and governmentality (Müller, 2017) we can describe how governance may help us understand what structural arrangements may be necessary

Table 19.1  Governance and governmentality concepts applied to IPD Concept

What it means in general

How it applies to IPD

Governance as a system of controls

Perceived as a system or collection of control structures and mechanisms to direct and control organisations, including related balanced economic and social responsibilities.

Governance as processes

Perceived as the role and functioning of processes through which organisations are directed and controlled to be responsive to the rights and wishes of their stakeholders.

Governance as motivation

Perceived as the mechanism by which accountability and responsibility is influenced.

Governance as relationships

Perceived as the role of governance in defining the relationships among the various internal or external stakeholders and their rights, responsibilities and influence upon the organisation.

Governmentality

The culture, norms and mindset of people concerned with governing projects.

The IPD form of alliance agreement and the way that it is designed to shape and maintain collaboration as a ‘one-team’ concept with a best-for-project mindset. Incentivisation based on project, not individual team performance, instils collaborative, shared, joint accountability to create a ‘one-team’ mindset. The IPD-agreement form includes processes specifically designed to engender collaborative behaviours such as no-blame, commitment to innovation, and consensus decision-making. The process for measurement of key results areas extend beyond ‘iron triangle’ measures to include broader social and environmental concerns. The IPD agreement encourages collective responsibility and accountability as opposed to individual team performance. This is formalised through incentives under a gain- and pain-sharing contractual clause. The IPD agreement is framed in ‘we’ not ‘you’ language to emphasise collaboration. Participants agree to transparency and an open-book policy and accept their mutual dependency within a ‘one-team’ concept of mutual shared obligations to deliver best-for-project outcomes. The way that authentic leadership is demanded in IPD projects. The designed accountability system that balances trust with control and the best-for-project mindset to focus everyone on avoiding power, information and knowledge asymmetries, to facilitate effective collaboration. As highlighted in Chapter 27, the team selection process has a very strong emphasis on proponent alliance team’s governmentality and culture.

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to deliver a project, and more particularly, an IPD project, and how governmentality helps us understand how to ensure that people and processes are aligned to deliver a successful project. Control in IPD is centred on ensuring transparency, accountability, responsibility and fairness. There is a focus on encouraging, and indeed achieving, an outcome by all participants jointly through their collaboration as members of a single project team with aligned common goals. Governance control systems are enacted through governance processes that support relationships between participants and relevant external stakeholders to get on with the job. A considerable effort is made to minimise barriers to collaborative effort and to maximise enablers to do so. When we consider IPD projects compared to more traditionally procured projects, we see a greater focus on stakeholder rather than shareholder orientation. IPD projects are usually developed as part of civil engineering and building infrastructure programmes to deliver value to multiple and layered stakeholder groups. The deliverers of IPD hospital projects in the USA are concerned not only with the economic returns to the Health Services Provider: Sutter Health for example (Lichtig, 2005; Post, 2007), but also to the whole range of medical workers engaged in those facilities as well as the patients receiving treatment and those that may be considered as the general public visiting a hospital. Fischer, Khanzode, Reed, and Ashcraft (2017) discuss sustainability in their book in terms of business as well as environmental sustainability. Similarly, the infrastructure alliance projects studied by Walker and Lloyd-Walker (2015) in Australia were focussed on multiple stakeholders as well as achieving triple bottom-line (economic, social and environmental) outcomes. We also see in IPD projects a need and a design concerned with both outcome control to deliver to stakeholders what they need, and also to be highly focussed on the control of processes and behaviours that are designed to support collaboration. This fits with the ‘agile pragmatist’ characterised by Müller (2009, p11) as a paradigm that: Balances the diverse requirements of a variety of stakeholders by maximizing their collective benefits through the timely development of functionality or value. Project management methods maximize value of a series of outcomes over time, based on the strict prioritization of user needs. It is against this backdrop that we now discuss how projects may be delivered across the initiation to the outcome phases. In doing so we focus on the IPD approach and contrast this with traditional project delivery approaches.

Governance at the front end of projects This section takes a more detailed focus on governance process at the front end of projects. The origins of the process emerge from the end of the last century. A gateway process was recommended by Peter Gershon (1999) to the UK government, based on private-sector best practices. The Office of Government Commerce (OGC) implemented it from 2000 (Klakegg, Williams and Magnussen, 2009, p80, Department of Finance and deregulation, 2009, p2). The OGC developed it further (2007) for commercial and infrastructure projects to test assumptions about a project’s viability involving a formal process for government projects in the UK. During development, the process has had many names and its scope and application has evolved. The term stage-gate, or phase-gate, is also used and Cooper, Edgett and Kleinschmidt used the concept for managing new product development before it was adapted to manage the approval of project proposals.

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The UK and Australian front-end governance approach The gateway approach has been adopted by other governments, for example in Australia (Commonwealth of Australia, 2006;2009). The Australian process has a series of five stage-gates across seven identified project delivery phases in which the project proposal is developed and reviewed for relevance, efficacy and potential benefit impact. ••

••

••

••

••

Phase 1 is the business-need identification phase in which strategic proposals are developed to frame potential options. Gate 0 is the business need gate testing for stakeholder support, demonstrated alignment with the organisation’s business goals and proposals, and more detailed plans about how to proceed to the next and subsequent phases. This is a ‘why bother?’ testing phase to ensure that there is a real need to be satisfied. Phase 2 follows a successful Gate 0 outcome and involves the development of a business case where options are explored and appraised for being affordable, value for money/best value, and whether the initial plans for the subsequent stages are still valid. The checking and appraisal of the Phase 2 plan details is undertaken through the Gate 1 – Business case stage-gate for the strategic direction and concept, to ensure that the business case process and assumptions are robust enough to proceed to the next phase. The identified project benefit concept should be SMART, that is Specific, Measurable, Achievable, Relevant and Time-bound. Phase 3 is where the delivery strategy is developed, for example for infrastructure it may be a traditional design and construct (D&C), Public–Private Partnership (PPP), or IPD form, such as an alliance. Gate 2 is focussed on how prepared the project proponents (owners/ sponsors) are to enable proposals to be called for from within their organisation if it is to be an in-house project (rare these days) or offered to the market. The gate checks for robust procurement options and ensuring that the plan’s feasibility is still justified. Phase 4 is where the procurement delivery tender solution is examined. The business case is reviewed and updated to reflect accumulated knowledge about the business need and other general environmental factors. Bids are assessed and the readiness of the partner’s plan for design and delivery is detailed. Gate 3 is the procurement-form-choice decision gate. The focus here is on matching the business need with the procurement strategy and readiness of the market to participate. It also involves questioning the robustness of the planning for design and delivery as well as which project-governance controls will be put in place. Phase 5 is the tender decision stage to deliver the project solution, where the contract for the project to go ahead is given as approved. The project is actually delivered during this phase, which may be significantly longer that previous phases. Plans for testing at completion, commissioning and transition are also approved in readiness for the asset/benefit to begin delivering value to the organisation as planned. Gate 4 tests for readiness for service upon project completion and its transition to handover. This gate reviews the decision before it is formally made and communicated for work to commence.

It could be argued that a post-handover stage-gate when the asset is fully operational should be considered. This may reveal useful lessons learned or flag conditions for asset refurbishment or change of use. In the following section, we will use Norway as a stage-gate governance, detailed, illustrative case study example.

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The Norwegian front-end governance approach The Norwegian government (the Ministry of Finance) took an active lead in improving public-sector investment projects in 2000, following a period of vast budget overspends, accompanied by projects that were delivered too late and with fewer benefits delivered than originally planned. The Ministry of Finance saw this as a serious governance problem and developed a so-called Quality Assurance Scheme to fix it (Samset et al., 2006). The first version of the scheme (2000) was a control intervention before the final decision in Parliament to finance and execute the project. This broadly corresponds to Phase 4 and Gate 3 described above for the UK and Australian approach. Later (2005), a second intervention was introduced earlier in the development stages, before the government accepted the project for further planning after thorough assessment of the business case. This corresponds to Phase 2, Gate 1 above. Similar governance arrangements have spread to other parts of society when copied by local government in large municipalities and regions. Over time, this scheme has developed further into a complete governance regime for major public investment projects in Norway. Private-sector parties that want to be suppliers to the state-funded investment projects also need to adapt their practices to this governance regime. This effectively means that the principles of governance installed in Norway influence the whole project management community across sectors and industries. The Ministry of Finance also installed in 2002 a research program called Concept to follow and document this regime. We suggest that this is the most well-documented governance regime currently available. All information is freely available online: www.ntnu.edu/concept (although much of it is in Norwegian). The original governance system in the UK was based on private-sector experience, whereas the Norwegian system was developed from the public sector but later spread to the private sector through the project bidding mechanism (Klakegg et al., 2009). The purpose was similar (value for money) and the means focussed front-end practices that stimulate the choice of alternatives to maximise value (Samset et al., 2014). Similar processes have been adopted and implemented by large commercial companies, as recommended by Merrow (2011) for petrochemical and mineral-extraction industry-sector megaprojects. There is consequently no clear-cut difference between private and public sector in terms of what means can be used to reach the ultimate goal. Figure 19.1 illustrates the Norwegian project stage-gate process. It moves across a similar process to the UK and Australia. There is a proof-of-concept stage in which the project need is identified, together with ideas to address these generated ideas. This is followed by pre-study works that result in two options and a ‘do-nothing’ business-as-usual (BAU) option being proposed for a government decision on whether to proceed to the next stage or not. If neither of the two active options are approved to proceed, then the BAU option is followed by default. Should the proof of concept be accepted, then more detailed work on the business case is authorised to proceed. The option accepted as being the best is then developed. Pre-project work develops the basis for: 1 2 3 4

Needs analysis that includes mapping all stakeholders and affected parties to assess the relevance of the anticipated investment in relation to their needs and priorities. Overall strategy that ideally specifies consistent, realistic and verifiable immediate and long-term objectives. Overall requirements that need to be fulfilled, e.g. functional, aesthetic, physical, operational and economic requirements. Alternatives analysis that defines the zero-option and at least two alternative concepts, specifying their operational objectives, essential uncertainties, and cost estimates. Alternatives should be subjected to a full socio-economic analysis (Samset et al., 2006, p6). 422

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QA1 Government

Needs identification

Idea PreIdea PreIdea Prephase study study phase phase study Proof of concept 2 option + do nothing define KRAs

QA2 Parliament

Pre-project

Business case needs analysis overall strategy overall requirements alternatives analysis

Government Departments design and delivery internal external consultants local authorities/stakeholder groups Parties involved

Norway Stage Gate Process

Detailed design and procurement

Execution and delivery

Design development

Deliver the asset

design and procurement strategy e.g. traditional DBB D&C, IPD

actual build

Government Departments

Delivery Contractor

design consultants financial analysts technical consultants

external consultants government oversight

Operate

Facilities managers/ operators

Figure 19.1  The Norwegian stage-gate process (Source adapted from: Samset and Volden, 2013)

In the Norwegian system, the business case and pre-project study results are presented to Parliament to gain national, rather than the ruling political party’s, approval. This removes uncertainty about projects being cancelled once there is a change of government, with a political party that is hostile to the project taking power, as happened in Australia, for example. The Liberal Victorian state government rushed through The East-West Link freeway extension PPP approval by executive orders immediately prior to a state election that proved to be highly controversial and that resulted in the incoming Labor Government cancelling the contract at great expense (Victorian Auditor-General’s Office, 2015). Once approved at QA2, full designdevelopment documentation and tendering takes place. A project delivery contractor is then appointed through a tendering process and the successful entity delivers the project. Figure 19.1 also illustrates the parties involved throughout the process, with government departments being actively involved at all stages up to the successful tenderer appointment to proceed with construction. While external consultant advice is sought throughout this process when appropriate internal resources are unavailable, the process varies from the Australian alliance process in several important ways. The business case pre-project phase is undertaken under the auspices of the government departments under the Norwegian system. Under the Australian and New Zealand alliancing approach, a consortium of designers and contractors, and often operators (where the infrastructure operator has been outsourced), is involved at the pre-study and pre-project stages (Walker, 2016). The process adopts either a selected single-syndicate alliance-team approach with full government project-owner representative involvement at the pre-study stage, or a competitive dual-syndicate approach is used, in which the successful syndicate is appointed at the QA2 point. Chapter 27 in this book provides details of how this collaborative process operates in the Australian context. 423

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The execution stage proceeds after the contract award for project delivery and involves government representation for contract administration purposes, such as dealing with contract variations, for example. It could be possible for Norway to introduce a procurement system similar to that of the Australian project alliance IPD-type approach where the integrity of the current system is maintained. We are not advocating for such a change as the motivation to engage in IPD, and alliancing in particular. This choice is highly contextdependent. Chapter 1 of this book provides a summary in Table 1.1 of the motivation and context for alliancing. Context and all participants having the requisite knowledge, skills, attributes and experience to deliver projects through an IPD process, determine whether or not to choose an IPD project delivery approach for the project-execution phase. There has not been a long history of IPD in Norway and so any such move towards IPD would be a new experience for many potential project participants. However, there have been a wide range of examples of projects where collaboration was evident from cases in the Norwegian private sector (Borve et al., 2017). The Norwegian stage-gate approach started out as a control intervention and developed further into an approach that took the form of a governmental control system. During this development, all sides of governance are dealt with as indicated in Table 19.2: from the perspective of a governmental control system. Processes adopted at the front end are illustrated in column three. These explain processes define and predicate integrating the project owner into project team relationships through that front-end stage together with the governmentality aspect that it demonstrates. ‘Good governance’ includes four principles that constitute sustainable and ethical project governance, namely: transparency, accountability, responsibility and fairness (Millstein et al., 1998). The Norwegian governance framework introduced here has significant influence over all these dimensions of public projects. It works through its formal structures – controls, processes and roles, and through its more cultural sides – relationships and governmentality.

Governance at the development phase of projects Front-end governance measures are primarily aimed at improving the process of selecting the most suitable projects to fund and execute and ensure they are given appropriate scope, time, and budget conditions, typically seen from the perspective of the project owner and funding bodies. One interesting question to consider is whether such measures are conducive to setting up IPD projects in a manner that helps facilitate their success. Are there activities, analyses, etc. woven into such governance processes that somehow help set the stage for an IPD-oriented type of execution of projects that undergo these processes? As far as we are aware, there are very few, possibly none, examples of case projects in Norway and perhaps elsewhere, that have been both subject to the level of intensity of the Norwegian project-governance processes and been carried through to completion as an IPD project. Thus, an attempt to answer this question must rely on a hypothetical discussion, which we will base on Table 19.2 and Table 19.3, as well as applying our knowledge of the governance schemes of the UK, the Netherlands, and Norway (Klakegg et al., 2016). For interested readers, this last source includes more about how the Netherlands chose different means to reach similar ends as in the UK, Australia and Norway, as explained in this chapter. Klakegg, Williams and Shiferaw (2016) conclude that all schemes will suffer from ‘wear and tear’ and thus need renewal and development to stay sharp and efficient. The project environment will also change and new approaches will be introduced or developed by project actors. These trends and developments illustrate the need for continuous improvement to any governance regime and quality-assurance system. 424

What it means to the Norwegian approach

An active intervention to check whether the proposed investment alternative represents good value, is realistic, and ready for implementing the next stage. Documentation is controlled for completeness, correctness, consistency, etc.

As part of the intervention, defined planning and control processes are implemented. The results are documented and will decide whether or not the project passes into the next phase. The intervention processes are described, anchored at a strategic level, and requirements are explicitly defined and strictly implemented.

The current stage of considering project incentivisation within the Norwegian stage-gate process is emerging but is still somewhat reticent and exploratory.

Concept

Governance as a system of controls

Governance as processes

Governance as motivation

(continued)

The process of passing gateway QA1 and QA2 is so demanding that it takes great effort by all involved parties to produce a viable proposal and acceptable documentation. This has led to an increasingly detailed and involved process ahead of the stage-gate to make sure all relevant information is available and taken into account. This has a significant integrating effect, and is reinforced by arenas for professional debate on these matters provided by the Concept research program. The Norwegian QA scheme is by no means a complete system, as government has never intended to tell the agencies or private sector HOW to do their job, just what they need to achieve (Christensen, 2009; Klakegg et al., 2009). The business development, briefing, design, procurement, project execution or operation processes of the public organisations and their infrastructure are not directly subject to the scheme. However, by imposing critical control on both the professional quality of the process and its results, the QA regime has had significant influence on the extent of professionalism at all organisational levels. The requirements are so rigid and the transparency so comprehensive that any deviation will expose the project and key actors to public criticism (Klakegg et al. 2009, 2016). This leads to a growing understanding that no party will succeed unless in collaboration with key stakeholders. The approach requires significantly more resources to be used in the early stages of development, and the involvement of more parties at an earlier stage compared to before. Motivation to deliver the best value in an holistic sense (recognising social and environmental value), rather than value for money (that tends to focus more heavily on cost/value – MacDonald et al.., 2013) is best served by incentives that link to broad triple bottom-line key-result areas. Incentives are based on gain- and pain-sharing on the end-project outcome rather than individual participants’ performance. This fosters a united team vision for a best-for-project outcome.

How it applies and may be used to better integrate the project owner, designer and deliverer

Table 19.2  Governance and governmentality concepts applied in the Norwegian QA scheme

What it means to the Norwegian approach

The QA scheme came out of a situation where the Ministry of Finance wanted more control over budgets and thus over the development of public projects. To achieve this they used political power, economic resources and professional knowledge to build a completely new environment for project management.

Any governance approach needs to be developed and implemented in accordance with and with respect for the existing culture and mindset. After all, it is always about the people and groups involved in the process, not primarily about the formal structures.

Concept

Governance as relationships

Governmentality

Table 19.2  (continued)

Even though the Norwegian QA scheme was originally a pure control regime, it quickly developed into an innovation arena, supported by the Concept research program. The scheme was controversial at first, but results have shown positive effects that turned the discussion into an active seeking of opportunities to improve processes, methods, knowledge and access to information. The selection of a few, highly professional private-sector parties (consultants) as external controllers and development partners defined them as role models, and the Ministry of Finance invited all relevant ministries and agencies to join in development of the processes and criteria involved in quality assurance. The Ministry of Finance’s position as gate-keeper (Klakegg et al., 2010) was in control of which projects were allowed to proceed to the project decision stage. This made it highly relevant and important for all parties to join. From this joint innovation process, and with increasingly positive results, good relations between the parties developed and opened up for broad collaborations and integrated processes. Culture (egalitarian, work–life regulations, democracy, etc.) and mindset (trust, communication, openness, etc.) form an important premise for the Norwegian QA scheme (Klakegg et al., 2009). It would not work without them. Avoiding a mismatch between the formal governance structures and people’s behaviour is a guiding principle (Klakegg and Volden, 2017). However, the governance scheme also strengthens these qualities and develops them within the context of the project-development process. The openness to exchanging experiences and good practice across sectors, organisations and levels helps all parties reach a level of good performance fast. By keeping arenas for innovation as (an associated) part of the QA scheme, important aspects of governmentality are upheld and further developed.

How it applies and may be used to better integrate the project owner, designer and deliverer

IPD governance implications

We present two views of governance at the development phase. The Norwegian perspective is useful because it is a sophisticated non-IPD approach that features many collaborative characteristics. The second perspective is from alliancing in Australia, as this provides a pure IPD arrangement.

The Norwegian project development and delivery-governance experience The assessment of the Norwegian state governance process is presented in Table 19.3. The whole complex problem addressed here is about how it is possible to ensure future projects (investments) will produce the benefits they are expected to, and thus create the value intended from the initiators. As indicated above, there is a multitude of formal instruments available, but it is also important to combine them in a way that aligns well with the culture and mindset that dominates the current environment in which they are to be implemented (Klakegg et al., 2009). This points to the culture and attitudes in the society where the arrangements are meant to work: copying other countries’ or organisations’ governance arrangements will not work. Our opening discussion on the relevance of institutional theory and Scott’s (2014) three pillars emphasised the importance and relevance of local cultural norms in interpreting regulations and rules. Judicial and cultural differences will force different responses to the same formal arrangements. In terms of promoting IPD, the governance and governmentality aspects above represent possibilities for all parties based on the following: ••

••

••

Project initiators need to find the best concepts and options for their projects. The knowledge needed to identify and develop these resides with the key stakeholders and specialists. Thus, IPD may be a useful approach to strengthen the project initiatives because it draws together the principle parties of the owner, design team and delivery team much earlier than is currently the case, as evidenced by the IPD literature in the USA, for example (Cheng et al., 2015), Finland (Aapaoja, 2014; Hietajärvi et al., 2017), New Zealand (Ibrahim et al., 2017), the Netherlands (Laan et al., 2011; Plantinga and Dorée, 2016), and Australia (Walker et al., 2015). Project financing parties need to ensure that the investment is viable in a financial sense. Triple bottom-line social and environmental sustainability of the projects have also become critical issues to those who make finances available for future investments, as this also provides longer-term competitive advantage (Porter and Kramer, 2011); and others in the accounting literature argue that ethical financing represents enlightened stakeholder engagement (Macve and Chen, 2010). Non-viable investments are unacceptable from an economic point of view and represent unethical investments that financers today need to distance themselves from. IPD will help financing parties avoid future investments that end up as bad publicity. Examples from the project management literature taking the ethics and public-good perspective to IPD may be found in the Australian Sugarloaf alliance project (Smith et al., 2010; Melbourne Water, 2014; Lloyd-Walker and Walker, 2017). Chapter 23 of this book discusses ethics, corporate responsibility and IPD. Long-term sustainability of built infrastructure is also crucial for long-term project success. The facility’s users need to be confident that they will get a solution that is relevant and functional for future use and operation as well as from the short- and medium-term perspectives. It is important to apply knowledge from use and operations data and to obtain that feedback early in design development. Clients also need to consider flexibility in design for inevitable future needs. IPD offers the opportunity to achieve both these at the same time by integrating users and operators in the development process, as evidenced in cases from the USA, for example (Fischer et al., 2017). 427

What it means to the Norwegian governance approach

This is the most prominent aspect of the Norwegian scheme; the historical motivation for introducing the scheme was to establish a new control mechanism to make public agencies more accountable. Initially, the motivation was to address the problem of frequent cost overruns. This led to the QA2 decision gate, and was later followed by QA1, aimed at ensuring that the most suitable projects under promotion were selected and designed, based on the most appropriate design concept. Thus, the Norwegian scheme is fully aligned with the control aspect of governance theory.

Both in terms of formal instructions posed to the external QA consultants and the procedures that have been established over the years, both QA stages involve various processes that constitute governance processes. These involve stakeholder consultations, collaborative design-concept development and evaluation, risk identification, cost–benefit analyses, etc. While most of the processes that directly feed the QA deliverables are delivered by external consultants, they are normally preceded by preparatory analysis processes managed by the agency (as part of a choice-of-concept evaluation that results in a formal report which forms an important part of the basis for the QA1 work). Thus, the QA scheme itself drives processes that result in more extensive governance at the front end of these projects.

Concept

Governance as a system of controls

Governance as processes

Since the QA1 decision gate involves analysis of several different solution concepts, this most likely also has an impact on the integration of future actors involved in project execution. The alternative solution concepts must be investigated in sufficient detail to allow analysis of investment costs, benefits delivered, stakeholders affected, etc. To enable this, inputs must typically be sought from different stakeholders, such as future operating bodies, users of the infrastructure delivered, engineering consultants, and contractors (such contact does not imply any obligation to award future contracts to suppliers consulted). We believe that this aids in initiating a process that facilitates integration across the project’s owner-agency supply chain at an earlier stage in the project-development process that would not necessarily be started until a later stage if the QA1 decision gate did not exist. This indicates that QA1 has significant potential in promoting IPD. Similarly, the QA2 decision gate, which is mainly focussed on risk, contracting strategies, and cost estimates, also requires that the external quality assurers conduct various analyses that rely on specifying design-concept details further from the QA1 stage. Consequently, the agency should have progressed the project-design concept further after QA1 For example, arriving at sufficient detail to allow undertaking a QA2 assessment at the QA1 stage, can thus contribute to further front-end integration of actors in future execution. However, QA2 is more transaction-oriented and focussed more on actual control than QA1 and as such probably has less potential for promoting IPD compared with QA1. This is closely linked to the discussion above; the QA scheme drives processes that mandate contact and dialogue among different actors involved in the development of the project. We assume this to have a positive effect in terms of laying groundwork for future implementation of IPD as a project-execution approach. This certainly applies to the actors involved in such processes who later inevitably become involved in the execution of the project (the project owner, operating body, users, and agency) as well as actors who are involved in the front-end phase, but who may not play a part during execution, i.e. various types of suppliers. Some of these may be chosen as actual suppliers, but the national supplier market in Norway is rather limited and, even for actors not involved in the execution of the project in question, involvement in front-end governance processes in general can help create general maturity for collaborative approaches like IPD.

How it may be used to better integrate the project owner, designer and deliverer

Table 19.3  Governance and governmentality concepts in the Norwegian governance process and their relevance for integrative initiatives, such as IPD

Governmentality

Governance as relationships

Governance as motivation

The original motivation for the stage-gate approach was to ensure greater financial responsibility and control but it has evolved into a best-practice rigorous approach to developing a business case based on wider key results areas (KRAs) than budgeted cost and time, or even fitness-for-purpose quality. This evolution has fostered greater collaboration between government and interdisciplinary consultants through preparing a rigorous QA1 and QA2 proposal. This follows naturally from the discussions about governance as control and processes. As a direct consequence of the analyses and processes driven by the QA investigations, actors involved in the project (but excluding suppliers due to the law of public acquisitions that rules for impartiality) are brought together at several instances and for different purposes that might otherwise not have happened. These interactions can certainly help form and evolve relationships among actors internal and external to the project. This final aspect of governance is the least tangible one, but, nonetheless, relevant to the Norwegian QA scheme. First, inside each individual project, the processes and interactions that result from imposing the QA1 and QA2 investigations certainly influence aspects such as trust, working culture, etc. in the extended project organisation. We argue that the net effect of this influence is positive, i.e. that trust among actors is increased and that the basis for future collaboration is improved. However, some of these processes might also bring to light and sharpen disagreements and conflicts that can lead to deterioration of trust and working relationships (in some cases, the QA investigations make issues surface that otherwise might not appear until later and then with greater negative consequences – as such it prevents conflict). (continued)

The fact that the governance processes force the formation of relationships early in the development of projects should help stimulate relations that IPD could benefit from. If such relationships have to be established from scratch, after project execution is formally started, it will naturally take longer for these to evolve than if they were seeded far earlier in the project-development processes. The Norwegian QA scheme even builds relations across projects because several arenas for collaboration and experience sharing were established as part of it. There still remain impediments to alliancing and similar IPD forms due to existing Norwegian competition and public-procurement laws that need to be considered and addressed. As such, the Norwegian QA scheme is seen to have had a positive effect on relationships, trust, and the general climate for collaboration in bringing public megaprojects through to funding and execution. There is no reason to doubt that this also has a positive effect on the likelihood of successful implementation of IPD or other relational-based contracting and execution models. Chapter 13 discusses trust and open rigorous debate, and Chapter18 discusses innovation and its diffusion for IPD projects. Both chapters stress the need for open and vigorous debate about proposed project-concept solutions in an atmosphere of no-blame and low power and knowledge asymmetry. This raises the prospect of conflict as being positive potentially if well managed. The Nordic countries generally have a naturally collaborative culture in which social good, low power distance and seeking consensus are societal norms (Högberg and Adamsson, 1983; Hofstede, 2001; House et al., 2004). This could work in favour of experimenting with IPD more fully in Norway.

The IPD incentive regime of establishing a fixed-price cost and time-target outturn cost (TOC), together with the gain- and pain-sharing agreement may be the next step in the development of the Norwegian project stage-gate process. We suggest caution, however: as noted in Table 1.1 in Chapter 1 of this book, the motivation to engage in IPD and in particular alliancing is highly contextual.

Concept

At the industry level, although many of the projects that are run through the QA scheme employ international suppliers to a smaller or larger extent, a majority of the actors involved, from the owner, agency, user, and supplier side are Norwegian and collaborate on many projects over the years. The way the QA scheme has forced a much more structured governance model onto state-owned investment projects during the last fifteen+ years has undoubtedly created a much better understanding of front-end governance in the industry as a whole. While some voice criticisms against the scheme and its implementation (mostly for requiring too much resource and time), most agree that it has had an overall positive effect on the development and decision processes for these projects, and there is a clear sense that there is trust in the system and among the actors. Interested readers might like to learn from the paper by Klakegg et al. (2016) about this issue.

What it means to the Norwegian governance approach

Table 19.3  (continued) How it may be used to better integrate the project owner, designer and deliverer

IPD governance implications

••

••

••

Regulating parties need to access complex information, including permit information, in order to consider the consequences of the suggested solutions. This information will be present up-front in the planning process even before formal procedure for approval starts. In order to avoid future conflict in the regulating process, active involvement to clarify premises for development is possible in an open, transparent process where parties are accessible. This highlights the advantage of having facilities-management expertise brought into the early stages of project design. The book by Fischer et al. (2017) provides many practical examples of this. The asset owner/client needs to know that the suppliers are willing and able to deliver the most appropriate solutions with the intended effects from a long-term perspective, and simultaneously to match expected cost, time and quality from the short-term perspective. Projects are becoming too complex for one party to fully understand and oversee. Project owners need to procure suppliers and service providers that they can trust. IPD is purposefully designed to do so, as described in other chapters of this book, particularly Chapter 13. The Norwegian situation above suggests that this is possible in the public sector as well as it has been shown in the private sector elsewhere, such as in the USA (Pishdad-Bozorgi, 2012) and Australia (Davis and Walker, 2008). Suppliers need to know they will be reasonably paid for their effort and knowledge contribution. IPD offers models that take this as a starting point and accept this as fundamental, unlike traditional (transaction-based) models where the basis is a competitive win-or-lose process (Ross, 2008; Love et al., 2011). The concept of reasonable return was specifically addressed in, for example, the National Museum of Australia project. The Australian National Audit Office confirmed that alliance-delivery-team participant fees were based on recent average profit margins over a business cycle, so that fair recompense was provided (2000, p40) and that these margin figures were verified by the probity consultants engaged to ensure that project participants acted and behaved according to legal and contractual (the Project Alliance Agreement) conditions (2000, p49).

There are numerous practical governance challenges that the parties involved need to address before entering into an integrated and collaborative process such as IPD: ••

••

••

Project initiators need to be well prepared before making the first move. The official start of project development (especially in the public sector) builds expectations among key stakeholders and society in general. Preparation includes ensuring that the selection process is fair and transparent, and that adequate governance measures are in place to counter the potential for either parties engaging in opportunistic behaviour (Laan et al., 2011). Regulating parties need to be careful in terms of not pre-accepting future solutions before they are adequately mature for a formal decision. The QA1 stage-gate is an important point at which clear, carefully considered options should be presented that have been rigorously developed to avoid the client (government) being pressured into hasty decision-making. The asset owner/client needs to yield traditional hierarchical and authority-based control in exchange for collaborative involvement (knowledge and relation-based control). This is a challenge because of the massive pressure to make quick decisions that accelerate in intensity. Owners may not have the competence, capacity or courage to do so (see Chapters 5 and 11 in this book for more details). There will be little time to investigate and make formal reports – so they need to learn to trust decisions being made collectively. There is 431

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••

also a need to keep some major business decisions formal and take time to anchor them in a wider, national, strategic-planning context. The Australian and Norwegian governance frameworks described above illustrate this. Suppliers need to be able to refrain from the traditional philosophy of building a case to get extras. The transaction-based world of procurement arrangements takes the starting point that suppliers shall tender low to get the contract, then, after the contract is awarded they look for opportunities to improve their economic results (Cox, 1999;2004;2014). This is known to frequently lead to conflict. IPD changes this altogether (Laan et al., 2011). IPD takes the position that contracts are awarded to those who are best able to solve the problem at hand, and that payment needs to be reasonable to avoid conflict.

The Australian project-development and delivery-governance experience The Australian and New Zealand IPD-alliancing governance process stretches across the pre-project through to the delivery phases of a project. This process has evolved over time. Several features are explained in greater depth in this section; however, interested readers should consult Chapter 27 in this book, which explains the Target Outturn Cost (TOC) process. The term TOC may be considered somewhat restrictive because it is much more strategic than the establishment of a fixed-price cost estimate for a project. The Project Alliance Agreement (PAA) has several governance features, including development of the TOC, development of delivery strategies, coordination mechanisms and an incentive arrangement that influences alliance-participant behaviours. Readers may wish to refresh their understanding of the motivation to engage in an alliance (see Table 1.1 in Chapter 1) and the Collaborative Framework elements and how they relate to each other (see Chapter 2, particularly Figure 2.2 and Chapter 2, Appendix 1). IPD, as its name suggests, place the word ‘integrated’ front and foremost. The governance system that supports integration includes integrating a joint governance structure (Element 2 in the Collaborative Framework, see Chapter 1); integrated risk mitigation and insurance (Element 3); joint communication (Element 4); substantial co-location (Element 5); common best-for-project mindset/culture (Element 9); consensus decision-making (Element 11); joint incentivisation (Element 13); and mutual dependence and accountability (Element 16). These elements are explained in greater depth in Chapters 6, 15 and 21. However, we discuss them here in this section from a governance perspective. IPD and alliancing in particular have collaboration as their hallmark, with supporting behaviours and processes.

Coordination governance arrangements The first and most obvious collaboration-alliance element is joint governance. This means that common integrated systems are used for making decisions, taking action and bearing joint responsibility and accountability for decisions and actions. Systems include the way that each participant has authority and agency delegated from their home-base organisation. There would also be common protocols for raising concerns, requesting information or clarifying information. Common systems would include standards and performance expectations, such as for health and safety, environment, dealing with stakeholders, and aligned human resource management systems such as performance reviews, disciplinary actions and a host of other administrative functions. Structurally, governance is usually enabled through two main coordination, monitoring and control committees. Tactical and operational-level coordination and control is undertaken by 432

IPD governance implications

the alliance management team (AMT), which is led by the Alliance Manager (AM). This team has representation from each alliance-participant organisation and their role is to help plan, monitor and control progress. The team resolves issues that cannot be dealt with by individual team members, perhaps because of lack of information, authority, or other conditions beyond their level of agency. This committee is very similar to a typical project-control committee on any project, except that the style and culture is one of low power and information asymmetry. Generally, the AMT has a shared leadership style in which those people with expertise and specific knowledge about a particular topic of discussion will in effect ‘chair’ that item of discussion. The aim is for openness, transparency and disclosure. A no-blame clause in the PAA protects people from retribution and the whole thrust of the committee culture is to get problems out on the table so that they can be resolved rather than fester. This also encourages and triggers innovation and experimentation so that novel solutions are often found. The Walker and LloydWalker study (2015) provides numerous examples of these. A strategic leadership committee, the alliance leadership team (ALT) is also a structural feature of alliance governance. This committee comprises the alliance-participant home-organisationbased champions for the project. They are usually senior executives with extensive experience of managing projects and, in the Australian and New Zealand context, where alliancing has been used for several decades, ALT members often have project alliance experience as well. Their role is to strategically guide the project. They take responsibility for ensuring that KRAs are being satisfactorily achieved and they also act as a conduit to their own home organisation and may also have other community influence. Their position and role often means that they have greater agency to authorise actions, or additional resources from their home-base organisations to speed up resolution of project issues or to ease tensions. The ALT meets periodically, usually monthly, and ALT members frequently visit the site from their home base. A similar AMT/ALT governance system is currently being used on the Tønsberg hospital project in Norway. The alliance as a whole would also have set articulated, clear KRAs. These would be established early on and be part of the framework for the alliance proposal response. The way that KRAs are monitored is through key performance indicators (KPIs). KPIs are important for maintaining coordinated action and are integrated so that a set of KPIs ranging from one to several may relate to one KRA. For example, a KRA for community engagement may include a KPI for communicating anticipated upcoming disruptions to the local community to KPIs relating to support for professional-association and industrygroup presentations. KRAs such as cost and time would be simple, as these can be measured against the TOC plan but other KRAs may need finessing as the project moves through the delivery stage. Participant P20 in the Walker and Lloyd-Walker study (2015, p172) explains the process as follows: the KRAs were initially developed by the owner very early on and massaged to death might I say, you can quote me on that, but finalised at the time of agreeing the TOC as well, so the TOC was really the value and the scope of work that we landed on in the TOC had to reflect the KRAs that we had for the project and also had to reflect the initial business case of the project, so all of that alignment of value statements and value requirements had to be done at the time of TOC to make sure that what we were putting forward was going to meet the objectives that we had initially planned, but also was going to create that value that we had promised. KRAs were often varied and specific to the project as those noted by P34 (2015, p173): 433

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the KRAs were around reducing congestion, improving safety, improving connectivity. And that improving connectivity is also about access control as well. Then community relations; so a very difficult community that we were living in, and socially very poor, and lastly, the integration with the maintenance regime. Risk and opportunity management is also managed in an integrated manner in alliances. One advantage of this is that because of the no-litigation clause and the client largely assuming overall risk, that there is a project-wide insurance policy rather than each participant taking out their own insurance (Department of Infrastructure and Transport, 2011). This not only saves money but engenders trust and confidence between team members. A further coordinating governance arrangement is the incentivisation provision of the PAA. Coordinating the alliance team is facilitated by the KRAs being applied to project performance as a whole and KPIs not being measured against any one team but against the project alliance team as a single entity. The TOC, as explained in more detail in Chapter 27 of this book, establishes the baseline cost, time and other minimum satisfactory criteria as defined by the KRAs. The incentivisation part of the PAA sets out the agreed percentage that each individual participant team is exposed to in terms of any gain- or pain-sharing resulting from deviations from the TOC. This not only motivates participants to collaborate, but also to coordinate their activities to ensure that the end-project result is favourable. It becomes pointless to pursue an uncoordinated agenda based on any one team’s individual goals if that jeopardises the end result. A further coordination feature of alliancing and IPD in general is co-location. Teams are, as far as is practicable, located together, usually in a single complex of site-office accommodation. This not only encourages collaboration but also facilitates coordination. Co-location also relates to mental co-location as those in the team that are not physically co-located are usually ‘virtually’ co-located and linked through digital technologies to be able to communicate freely. Another aspect of co-location is power and information symmetry. Alliances and other IPD forms usually have hierarchical structures that are flatter and considerably less command-andcontrol oriented so that it is easier for alliance participants to share perspectives on issues to arrive at common ground. Processes, structures and technologies are all geared to a unified team sharing a coordinated best-for-project vision for the project. Similarly, this approach is currently being used on the Tønsberg hospital project in Norway.

Collaboration governance arrangements Various governance arrangements help to cement collaborative behaviours in place. Communication technologies that are used by all PA participants not only help coordinate activities but also facilitate collaboration. Building information modelling (BIM) in construction and manufacturing projects provides one example of this. Where several design disciplines may use different BIM platforms in their home organisations, they either agree on a common PA BIM platform or ensure that there is sufficient interoperability to ensure that BIM product is transparent to those using the systems. BIM not only helps with design coordination but also for collaboration with the interfaces to visualisation and digital immersion technologies. These can be used to help the whole team appreciate the consequences of design on the delivery phase. Fischer et al. (2017, pp270–276) illustrate an example of IPD use of this technology in what they term a computer-assisted virtual environment (CAVE) where interdisciplinary team collaborative work takes place to not only improve design-detail effectiveness but to better understand sequencing and the logistics of construction delivery. This is one example of digital technologies 434

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having an impact on project delivery. Once these kinds of tools are being used it draws together disciplines into a more coordinated and collaborative collective united team. Governmentality arrangements are facilitated by IPD behaviours. In alliancing, in contrast to IPD in the USA Integrated Form of Agreement (IFOA), there is a no-litigation clause in the PAA. The way that the PAA legal framework formulates the way that IPD contractually varies from the traditional approach is highlighted by Ross et al. (2014, p11): •• ••

••

The pure alliance legal and commercial framework ‘changed the game’ by sharing most or all risks between the parties, so the parties would genuinely ‘all win or all lose together.’ This meant there was no longer any incentive to argue over which party bore a particular risk or to blame each other – instead the commercially sensible thing to do was to work together as one team in all circumstances – exactly the kind of behaviours required to succeed in high-risk environments. The concept of unanimous decision-making was a stark and legally tangible symbol of how much the game had changed from the traditional ‘master–slave’ relationship.

Governmentality is also evident in the consensus decision-making and unified best-for-project mindset. It becomes clear that governance and governmentality, the way that governance is interpreted by participants in a project (Pitsis et al., 2004/3; Müller et al., 2014), has a significant bearing on behaviours and actions on IPD projects.

Conclusion We set out to answer the following problem statement: How do clients ensure that IPD projects are appropriately governed, so that the briefing process facilitates the project being the ‘right project’ and that the project is subsequently effectively and appropriately delivered? Obviously, the answer given will be limited to the context described in this chapter. We further disaggregated this question into the following two questions: 1

What are the organisational structures and institutional pillar characteristics that provide the structure and culture for effective project/program governance? [Governance] 2 What mechanisms and processes ensure that ensure that these governance intentions are enacted and that in practice IPD project participants made clearly accountable? [Governmentality] The text and tables above illustrate that the questions do not have short, exact answers, but we will extract some main aspects here: Question 1: The main structure elements are defined stages with decision gates for major business decisions. This needs to be supplemented with proper organisational principles, including definition of roles and responsibilities compatible with the IPD principles. Adequate processes are then needed. It is important to define what information (documentation) is needed at each decision gate, and necessary control interventions are required. IPD does not rely on all activities and deliveries to be described up-front, so one main aspect of this organisational form will be to make it possible to make timely decisions as the project develops. This includes not only the ability to conclude complex technical and financial matters but also handle conflict resolution and priorities between conflicting goals and priorities. We also argue that organisational governance structures, such as the AMT and ALT, help shape and guide the way that the culture of IPD alliancing supports collaborative governance arrangements. 435

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Question 2: Probably the strongest force installing governmentality in this context is full transparency. This reduces any room for opportunistic behaviour to a minimum and increases the level of trust, since there are no hidden agendas. The opposite is probably also true – if there is no basis for trust up-front it will not work, the lack of trust will be exposed as soon as transparency is required and implemented. Open sharing of knowledge and experience is also a major issue. The next major feature, specific to IPD, is the risk-sharing and incentives mechanism. These are key to motivation and an innovative mindset. The cultural-cognitive pillar described in institutionalisation theory links governance with governmentality. We see many examples in this chapter that illustrate how behavioural requirements of IPD guide a specific way of thinking by IPD participants that in turn guides collaboration.

References Aapaoja, A. (2014). Enhancing value creation of construction projects through early stakeholder involvement and integration. DSc (Tech), Faculty Of Technology, Industrial Engineering And Management, University of Oulu Graduate School, Oulu, Finland, University Of Oulu. Australian National Audit Office (2000). Construction of the National Museum of Australia and Australian Institute of Aboriginal and Torres Strait Islander Studies, Canberra, AusInfo. Borve, S., Ahola, T., Andersen, B. and Aarseth, W. (2017). “Partnering in offshore drilling projects.” International Journal of Managing Projects in Business. 10 (1): 84–108. Børve, S., Rolstadås, A., Andersen , B. and Aarseth, W. (2017). “Defining project partnering.” International Journal of Managing Projects in Business. 10 (4): 666–699. Cheng, R., Allison, M., Dossick, C. S. and Monson, C. (2015). IPD: Performance, Expectations, and Future Use: A Report On Outcomes of a University of Minnesota Survey, survey report. Minneapolis, MN, Integrated Project Delivery Alliance: 18pp. Christensen, T. (2009). The Norwegian Front-End Governance Regime of Major Public Projects – a Theoretically Based Analysis. Concept report no 23, Trondheim, Norway, Concept Research Program, NTNU. Clegg, S. R., Pitsis, T. S., Rura-Polley, T. and Marosszeky, M. (2002). “Governmentality matters: designing an alliance culture of inter-organizational collaboration for managing projects.” Organization Studies 23 (3): 317–337. Commonwealth of Australia (2006). Guidance on the Gateway Review Process – A Project Assurance Methodology for the Australian Government, Canberra, Australia, Commonwealth of Australia, Department of Finance and Administration – Financial Management Group. Commonwealth of Australia (2009). Gateway Review Process – Overview. Canberra, Australia, Commonwealth of Australia, Department of Finance and Administration – Financial Management Group: 8. Cooper, R. G., Edgett, S. J. and Kleinschmidt, E. J. (1993). Winning at New Products, Reading, MA, Addison Wesley. Cooper, R. G., Edgett, S. J. and Kleinschmidt, E. J. (1997). “Portfolio management in new product development: lessons from the leaders-I.” Research Technology Management. 40 (5): 16–28. Cox, A. (1999). “Power, value and supply chain management.” Supply Chain Management. 4 (4): 167–175. Cox, A. (2004). Win-win? The Paradox of Value and Interests in Business Relationships, Stratford-upon-Avon, Earlsgate Press. Cox, A. (2014). Sourcing Portfolio Analysis Power Positioning Tools for Category Management & Strategic Sourcing, Stratford-upon-Avon, Earlsgate Press Davis, P. R. and Walker, D. H. T. (2008). Case Study – Trust, Commitment and Mutual Goals in Alliances. Procurement Systems - A Cross Industry Project Management Perspective. Walker D. H. T. and S. Rowlinson. Abingdon, Oxon, Taylor & Francis: 378–399. Department of Infrastructure and Transport (2011). National Alliance Contracting Guidelines Guidance Note 2: Insurance in Alliance Contracting Selling Insurable Risks. Department of Infrastructure and Transport A. C. G. Canberra, Commonwealth of Australia: 55. Fischer, M., Khanzode, A., Reed, D. and Ashcraft, H. W. (2017). Integrating Project Delivery, Hoboken, NJ, John Wiley & Sons.

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IPD governance implications Gershon, P. (1999). Review of Civil Procurement in Central Government, London, HM Treasury: 19pp. Hietajärvi, A.-M., Aaltonen, K. and Haapasalo, H. (2017). “Managing integration in infrastructure alliance projects: dynamics of integration mechanisms.” International Journal of Managing Projects in Business. 10 (1): 5–31. Hofstede, G. (2001). Culture’s Consequences: Comparing Values, Behaviors, Institutions and Organizations across Nations, Thousand Oaks, CA, SAGE Publications Inc. Högberg, O. and Adamsson, A. (1983). “A Scandinavian view of project management.” International Journal of Project Management. 1 (4): 216–219. House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W. and Gupta, V. (2004). Culture, Leadership, and Organizations – The GLOBE Study of 62 Societies, Thousand Oaks, CA, SAGE Publications Inc. Ibrahim, C. K. I. C., Costello, S. B., Wilkinson, S. and Walker, D. H. T. (2017). “Innovation in alliancing for improved delivery of road infrastructure projects.” International Journal of Managing Projects in Business. 10 (4): 700–720. Klakegg, O. J. and Volden, G. H. (2017). Governance in Public Projects: The Norwegian Case. Governance & Governmentality for Projects – Enablers, Practices and Consequences. Muller R. Abingdon, Oxon, Routledge: 24–37. Klakegg, O. J., Williams, T. and Magnussen, O. M. (2009). Governance Frameworks for Public Project Development and Estimation, Newtown Square, PA, Project Management Institute. Klakegg, O. J., Williams, T. and Shiferaw, A. T. (2016). “Taming the ‘trolls’: major public projects in the making.” International Journal of Project Management. 34 (2): 282–296. Klakegg, O. J., Williams, T., Walker, D. H. T., Andersen, B. and Magnussen, O. M. (2010). Early Warning Signs in Complex Projects, Newtown Square, PA, Project Management Institute. Laan, A., Voordijk, H. and Dewulf, G. (2011). “Reducing opportunistic behaviour through a project alliance.” International Journal of Managing Projects in Business. 4 (4): 660 – 679. Lichtig, W. A. (2005). “Sutter Health: developing a contracting model to support lean project delivery.” Lean Construction Journal. 2 (1): 105–112. Lloyd-Walker, B. M. and Walker, D. H. T. (2017). The Sugar Loaf Water Alliance – An Ethical Governance Perspective. Governance & governmentality for Projects – Enablers, Practices and Consequences. Muller R. Abingdon, Oxon, Routledge: 197–220. Love, P. E. D., Davis, P. R., Chevis, R. and Edwards, D. J. (2011). “A risk/reward compensation model for civil engineering infrastructure alliance projects.” Journal of Construction Engineering and Management. 137 (2): 127–136. MacDonald, C. C., Walker, D. H. T. and Moussa, N. (2013). “Towards a project alliance value for money framework.” Facilities. 31 (5/6): 279–309. Macve, R. and Chen, X. (2010). “The ‘equator principles’: a success for voluntary codes?” Accounting, Auditing & Accountability Journal. 23 (7): 890–919. Melbourne Water (2014). Annual Report to the Federal Department of Environment: Sugarloaf Pipeline Project November 2014, Melbourne, Melbourne Water: 44pp. Merrow, E. W. (2011). Industrial Megaprojects – Concepts, Strategies, and Practices for Success, London, John Wiley & Sons. Millstein, I. M., Albert, M., Cadbury, A., Feddersen, D. and Tateisi, N. (1998). Corporate Governance: Improving Competitiveness and Access to Capital in Global Markets, Paris, France, OECD Publishing: 112pp. Müller, R. (2009). Project Governance, Farnham, UK, Gower. Müller, R. (2017). Chapter 2 – Organizational Project Governance. Governance and Governmentality for Projects: Enablers, Practices, and Consequences. Müller R. Abingdon, Oxon, Routledge: 24–37. Müller, R., Pemsel, S. and Shao, J. (2014). “Organizational enablers for governance and governmentality of projects: A literature review.” International Journal of Project Management. 32 (8): 1309–1320. Office of Government Commerce (2007). The OGC Gateway™ Process – A Manager’s Checklist, London, The Stationary Office (TSO). Pishdad-Bozorgi, P. (2012). Case-based study and analysis of integrated project delivery (IPD) approach and trust-building attributes. PhD, Building Construction. Blacksburg, Virginia, Virginia Polytechnic Institute and State University. Pitsis, T. S., Kornberger, M. and Clegg, S. R. (2004/3). “The Art of managing relationships in interorganizational collaboration.” M@n@gement. 7: 47–67. Plantinga, H. and Dorée, A. (2016). “Procurement strategy formation: (re-)designing rail infrastructure project alliances”, .” International Journal of Managing Projects in Business. 9 (1): 53–73.

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Bjørn Andersen, Ole Jonny Klakegg, Derek Walker Porter, M. E. and Kramer, M. R. (2011). “Creating shared value.” Harvard Business Review. 89 (1/2): 62–77. Post, N. (2007). “Lean without Mean - Sutter Health’s waste-watchers trim construction fat to deliver a $5.5 billion capital program.” Engineer News-Record. Manhattan, BNP Media: 80–84. Ross, J. (2008). Price competition in the alliance selection process. PCI Alliance Services, Infrastructure Delivery Forum. Perth, WA, Main Roads Department of Western Australia: 12pp. Ross, J., Dingwall, J. and Dinh, H. (2014). An overview of collaborative contracting: Making collaboration effective and choosing the right framework. Melbourne, PCI Group: 17pp. Samset, K., Andersen, B. and Austeng, K. (2014). “To which extent do projects explore the opportunity space?” International Journal of Managing Projects in Business. 7 (3): 473–492. Samset, K., Berg, P. and Klakegg, O. J. (2006). Front-end governance of major public projects. EURAM 2006, Oslo, 17–20 May, Berg P. O., European Academy of Management: 8pp. Samset, K. and Volden, G. H. (2013). Investing for Impact Lessons with the Norwegian State Project Model and the First Investment Projects that Have Been Subjected to External Quality Assurance, 7491 NTNU – Trondheim, Ex Ante Academic Publisher. Schein, E. H. (1996). “Three cultures of management: the key to organizational learning.” Sloan Management Review. 38 (1): 9–20. Scott, W. R. (2014). Institutions and Organizations, Thousand Oaks, CA; London, SAGE Publications Inc. Smith, S., Anglin, T. and Harrisson, K. (2010). Sugarloaf Pipeline: A Pipe in Time, Melbourne, Sugarloaf Pipeline Alliance, Melbourne Water. Turner, J. R. (2006). “Towards a theory of project management: the nature of the project governance and project management.” International Journal of Project Management. 24 (2): 93–95. Victorian Auditor-General’s Office (2015). East West Link Project, Melbourne: 122 pp. Walker, D. H. T. (2016). Understanding the Alliance Target Outturn Cost Process and its Implications, Melbourne, Australia, Centre for Integrated Project Solutions, School of Property, Construction and Project Management, RMIT University: 77pp. Walker, D. H. T. and Lloyd-Walker, B. M. (2015). Collaborative Project Procurement Arrangements, Newtown Square, PA, Project Management Institute. Walker, D. H. T., Mills, A. and Harley, J. (2015). “Alliance projects in Australasia: a digest of infrastructure development from 2008 to 2013 ” Construction Economics and Building. 15 (1): 1–18.

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20 INFORMATION MANAGEMENT IN THE BUILT ENVIRONMENT Duzgun Agdas, Marc Miska, Shoeb Ahmed Memon, Steve Rowlinson and Derek H. T. Walker

The major part of an investment in any facility is the operation of that facility. Thus, the old adage ‘begin with the end in mind‘ is an appropriate philosophy by which to look at the facility production process through integrated project delivery. What is it that we want from our facility and how do we go about ensuring that we get what we want? Indeed, do we expect our requirements and objectives to change over the life-cycle of the facility? Here, we are moving away from using the project delivery process to focusing on the entity, the facility itself. We are expanding the scope and remit of our team in order to achieve operational goals. In order to deliver a successful facility we first need to review our strategic plans. What is the environment in which our facility operates, what goals and objectives do we have for the design that we are developing for the project, and what information do we need to maintain the facility and how and when do we need to access this information? This strategic focus goes way beyond the traditional concepts of the brief in the construction industry and looks at the whole life-cycle of the facility. The facility might be an apartment block, an automotive factory or a bridge that is run under a public private partnership. The needs in terms of information vary with the types of project; each has unique needs. Needs are not the same but the process by which we develop our data environment will be similar. It needs to be accessible to all and can be clearly specified if we take the time up-front to develop our goals and objectives into a strategy. This fits with the views expressed in Chapter 2, where we considered the amount of effort required at the front end of an integrated project delivery (IPD) project. What we are doing in this chapter is delving into this facilities domain in more depth. The question that we are addressing here is: What are the information needs of the developers, managers and owners of facilities; how should that information be stored and accessed and how should the data that provides the information be captured in the first place? The construction industry is beset by low productivity, extensive re-work and missed deadlines and budgets (Love, Edwards, Irani and Walker, 2009). Much of these unfortunate characteristics are masked by the fact that the information supplied throughout the project delivery process is inaccurate, poorly presented and analysed, and difficult to obtain. Love et al. (2018) take an interesting analytical approach to a study of re-work, adopting a ‘stupidity theory of organisations’ (Alvesson and Spicer, 2012) as their theoretical lens, noting that ‘asking questions may be seen as being offensive or frowned upon, thereby allowing stupidity to grow unchecked and pervade organisational 439

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life’ (2018, p3). They further reason that errors which result in accidents and re-work result from ‘functional stupidity’ barriers to mitigating re-work, due to problems with: reflexity, through an inability to critically reflect on what they are doing: justification, being an inability to understand why they do what they do; and substantive reasoning, being an inability to determine what the consequences of their activities are beyond the immediate task at hand. A further example of falling prey to misinformation occurs when blindly and uncritically accepting data. Love and Ahiaga-Dagbui (2018) have a paper on ‘fake news’ pursuant to their argument about questioning accepted ‘facts’ that are poorly substantiated by evidence or merely asserted without question. They take an example of criticising the way in which a cost-performance data set was used by Flyvbjerg et al. (2002) as the basis to argue that the projects had massive cost overruns or revenue underruns and that this resulted from optimism bias or strategic lying. The point made here is that data is not truth and its misuse can lead to misleading conclusions. In a world where children are digitally enabled before they can read and write, it seems very strange that an old, well-established industry like the construction industry cannot manage to collect appropriate data and turn these into useful information. Perhaps the issue underlying this is the adversarial nature of an industry operating under the procedures of an outdated paradigm, the inherent lack of collaboration stemming from this, and the view of many participants that information asymmetry is good for them. This is a cultural and institutional issue and one that the introduction of IPD was designed to address. However, this will involve both a change of mindset and an innovative adoption of new technologies and data-manipulation techniques. That is not to say that there are not islands of innovation throughout the industry. Top contractors, such as Skanska in Northern Europe, Laing O’Rourke and Bouyges in their worldwide operations, and Gammon in Hong Kong are all capable of and attempting to make use of data digitisation, including Big Data, in their business operations. These companies are market leaders in their own domains and the majority of the industry, perhaps including sectors likes engineering consulting and materials supplying, have not bought into the data management and data sharing advantages in the same way as have these contractors. The old silos still exist between the different sectors of the industry and between the different professions. This chapter attempts to address the root causes of this lack of enthusiasm and take up of technologies that other industries and other sectors are warmly embracing. The questions we ask are: •• •• ••

Why is there a reluctance to share a common data environment and to collaborate in bringing together data that can be analysed and used for the efficient operation of the facility? What are the inhibitors to the wide-ranging collection of data and its use as information in the construction industry? What are the preconditions necessary for a change in such working practices and attitudes that will enable integrated information management and data collection?

This chapter also acts as a ‘reality check’ for Chapter 16, with its focus on the advantages of the emerging digitisation of technology that offers disruptive innovation and its diffusion into the discipline of project management (PM). We explore some of the downsides and darker implications for increased digitisation of the range of data and information inputs that project managers need to cope with. Parts of this discussion also resonate with problems associated with knowledge and information transfer ‘stickiness,’ as discussed and explained in Chapter 18. It also links to Chapter 24, relating to the integration of design and construction information, and data for later constructive use in facilities-management systems. 440

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Background Information management within the construction industry has long been problematic, and cited as one of the reasons for lack of industry integration (American Institute of Architects – AIA California Council, 2007; O’Brien, Formoso, Ruben and London, 2008; Agdas and Ellis, 2010). The construction industry has been criticised for its lack of technology penetration and maturity (Australian Center for Robotic Vision, 2018). Many explanations for this phenomenon exist: a fragmented industry (O’Brien et al., 2008); lack of understanding and leadership (Agdas and Ellis, 2010); and lack of business alignment (Quezada G, Bratanova A, Boughen N and Hajkowicz, 2016). Despite the relatively well-understood lack of information technology (IT1) maturity and penetration to the industry, there has been a great deal of research in the field, with many distinct implementation areas. For example, there have been many research initiatives that revolve around the improved design for the projects (Ku K, Pollalis S, Fischer M and Shelden D (2008), and use of field technologies for efficiency improvement of construction operations (Yin, Tserng, Wang and Tsai, 2009). In this chapter we will discuss information management that pertains to IPD and the impact of Big Data in the built environment. Despite the clearly identified lack of information-communication technology (ICT) penetration into the construction industry, what is not lacking is research on the subject. A search on Google Scholar on ‘Construction ICT’ returns 19,500 results, while the same is true for Construction IT (information technology) returns, 648,000 results. Also interesting is the breadth of the research articles written on the subject. While the current literature is dominated by building information modelling (BIM) applications in construction2, there are many articles on field technologies, technology adoption, collaborative design, and virtual/ augmented/immersive-reality applications Despite the large body of literature and numerous industry reports on the need for better ICT implementation and data adaptation into construction, the construction business itself has not changed in a fundamental way to enable this alignment (Quezada G et al., 2016; Australian Center for Robotic Vision, 2018). There are clear process improvements, i.e. it is undeniable that CAD technology is superior to hand drafting, and 3D/BIM solutions are superior to traditional 2D drawings, and should have enabled better construction productivity; however, the evidence is all but contradictory (Australian Center for Robotic Vision, 2018). There can be a strong argument made about lack of construction productivity over the last two decades; the more optimistic outlooks only indicate productivity improvements that are lower than that of the other industries and overall economic growth rates. Perhaps improved safety and working conditions can be partially attributed to this phenomenon; however, it fails to explain the falling productivity rates in full. The relevance of this not so profound observation is the lack of alignment between ICT solutions in construction and productivity improvement – this has been dubbed the solution to trends in lack of productivity. The answer might be the lack of alignment among business practices in construction ICT solutions, and added process improvement afforded by better technology-use is often simply negated by additional institutional barriers and regulations. This is a weak hypothesis at best, but given the state of practice and seemingly forced technology adoption, it is also a viable scenario. Accepting this scenario, the purpose of this chapter is to provide an overview of the data-management practices in the construction industry, its relationship with IPD, and to provide a succinct summary of opportunities in the future. IPD has been promoted as a holistic collaborative effort that combines people and systems to maximise the combined efforts of all parties involved across all phases of construction project life-cycles (American Institute of Architects – AIA California Council, 2007). Arguably, the most encouraging part of IPD as a collaborative effort to fix construction productivity issues 441

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is the clear emphasis put on information sharing, potential issues with business-as-usual, and what should be enabled in an IPD solution to improve the status quo (Fischer, Khanzode, Reed and Ashcraft, 2017).

IT in construction and the built environment The traditional argument of industry fragmentation in construction and the built environment falls short when it comes to explaining the operational data management and relationship issues. Below are some specific discussions of different built-environment sector informationmanagement applications across project life-cycles, to highlight issues around lack of technology alignment – this is not a comprehensive list but is meant to serve as a scaffold around which to build the ensuing discussion. 1

2

Planning and design phase for building: A large body of literature exists on the need for improved design-construction integration, and overall design processes. The potential of using BIM solutions to improve existing practices appears to have been shared by all parties involved in construction, yet it is hardly arguable that BIM solutions are improving project outcomes, except for sporadic published success stories. This is despite the common efforts by industry and government agencies alike (e.g. USA and UK government agencies mandated the use of BIM for a number of years, and a mandate is to be followed by the Hong Kong government starting in 2019). The technology is yet to deliver on the promise of seamless data integration throughout the project life-cycle. There are many reasons that may cause this – none more significant than the potential legal ramifications of open-design considerations – but one significant factor is the ICT maturity of the organisations that use BIM solutions. Despite these strong efforts, the lack of technology and cost leadership in the industry causes issues in technology adoption when compared to other industries like retail manufacturing (Blanchard, Comm and Mathaisel, 2008). Building operations/facilities management: A similar phenomenon exists in the building operation phase, where substantial emphasis has been paid to creating smart buildings to provide better indoor environmental conditions while providing energy savings. The main rationale is to collect and provide granular data from multiple deployed sensors across multiple rooms, and to collect detailed information on indoor air quality – air temperature, humidity, vibration, sound, light levels, etc. Yet it is highly unlikely that systems that control indoor air quality, heating, ventilation and air-conditioning (HVAC) systems would be capable of utilising this information, as these systems simply work on the basis of temperature set points, with guaranteed minimum ventilation rates to ensure health and safety regulations (Brooks, Kumar, Goyal, Subramany and Barooah, 2015). This creates issues on multiple fronts: (a) the additional cost of purchasing, installing, and maintaining these extensive sensor networks, ( b) additional training requirement for facilities personnel and additional staff to make up for the additional work required, and (c) cost and management of the collected sensor data. Essentially, the added functionality for the building-sensing systems creates no additional functionality per se but can incur substantial additional costs. Another interesting fact about this particular problem is that measuring accurate occupant numbers can be used to achieve substantial energy savings without compromising occupant comfort, and the smart lighting systems do have this information available (at least a proxy of it). However, because the motion sensors in the lighting system exist behind a proprietary system, they cannot be used for HVAC-system applications. This is another example of the need for open data standards to reduce the costs associated with the interoperability of systems (Gallaher, O’Connor, Dettbarn Jr. and Gilday, 2004). 442

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3

Structural-health monitoring (SHM): An example of where additional functionality at an added cost can be observed is in structural-health monitoring systems (Agdas, Rice, Martinez and Lasa, 2016). Hailed as the answer to seemingly more frequent issues in infrastructure, especially bridges’ condition assessments, which is currently carried out via visual assessment. The major difficulty with visual inspection is the necessity to have visual access to the critical parts of the structure. What cannot be seen simply cannot be assessed. The intermittent nature of inspections is another concern, as, despite having benchmarks to economically ensure that inspections are frequent enough, the increased inspection frequency is only justifiable for structures with known defects, which can be problematic for the visibility issue discussed earlier. Given this scenario, SHM is intended to provide additional, and more frequent, feedback from the structure to enable better decision-making. SHM systems are complex, complicated and cost-intensive, yet they can provide information about the structure that is not available via traditional inspection methods. Moreover, the feedback from SHM systems is more than likely to be (near) real time to enable more timely decision-making, which can be crucial, especially during emergencies. However, such systems are not without limitations either: (a) the most prohibitive factor is the cost of these systems, not just in terms of sensor installation and maintenance but data acquisition, maintenance and processing; (b) the data generated can be substantial to manage or process – yet this issue has been more or less addressed with available on-board processing; (c) the governing agencies are not mandated to react to the real-time data with their decision-making process.

4

These are potential issues that are fundamental to successful system implementation but can be justified because of the potential functionality that can be added to the system. What is not justifiable is that the majority of the bridges worldwide are designed to be overly redundant to not benefit from such sophisticated systems. Because there is no industrywide uptake of such technology solutions, the economies of scale would never be achieved to justify the prohibitive cost. Traffic operations: The transport industry is a prime field for Big-Data applications, as transport networks stretch over vast geographic areas and data collected at every point has ripple effects to the next ramp, intersection and traffic light. A fundamental problem in transport networks is that data is collected by various road agencies across geographic and jurisdictional regions with different systems, sophistication and motivations (Miska, 2017). Further, in transport, data collection is usually part of a real-time control system; therefore it is not always designed to allow for data exports or interchange. To turn similar data that is provided through various systems, frequencies and formats into useful information – and to do this quickly – one needs a common understanding or language to put the data into context. Speed data, for example, can represent the speed of a single vehicle at a point in time (individual speed), the average speed of vehicles at a certain location (space mean speed), or even the average speed of a vehicle while travelling for a period of time (time mean speed) (Knoop, Hoogendoorn and van Zuylen, 2009).

Fundamental issues in information and technology management in the built environment The issues that pertain to ICT implementation issues in construction have been discussed widely in earlier literature. There are a number of common themes, such as the IT maturity of the industry, data stewardship, system maintenance costs, etc. (Bilal, Oyedele, Qadir, Munir, Ajayi, 443

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Akinade, Owolabi, Alaka and Pasha, 2016). Thus, in this section the discussions will be kept to what we believe to be the more fundamental issues that can now be addressed to provide the necessary paradigm shift in the built environment. 1

2

Lack of technology and cost leadership: Despite the calls for improved industry practice in data sharing and reducing barriers, the temporary nature of projects and lack of drivers for technology are great impediments to large-scale, successful application of these technologies (American Institute of Architects – AIA California Council, 2007; O’Brien et al., 2008). Great strides have been made in different industries, and the common theme is the technology and cost drivers of IT innovation with clear costs and benefits. This is an interesting contrast to the construction industry where ICT solutions that are created/adopted to enable increased collaboration are not fully exploited because parties engaged in temporary agreements are not collaborative in their engagements. The cause of this problem lies in the technology: it is often the case that the industry that designs collaboration software will overlook the functionality that promotes collaboration. A more plausible explanation might be the lack of alignment between business objectives/functionality requirements that IT systems can meet to justify the capital expenditure required (Rowlinson, 2007). Whether this misalignment is actual or perceived by the industry is debatable; however, the results are a clear indicator of such a problem. What makes this situation particularly interesting as a problem is that IT implementation in construction has been a long-standing research field. For instance, ‘BIM in construction’ returns 128,000 results on Google Scholar, while ‘BIM benefits’ return 52,500, and ‘implementation of BIM’ results in a total of 55,900 results. It is our opinion that this is not a complicated problem but simply a lack of alignment and benefit capitalisation, although there do exist a number of papers that focus on numeric IT-benefits measurement for the construction industry (Andresen, Baldwin, Betts, Carter, Hamilton, Stokes and Thorpe, 2000). Given this scenario, technology and cost leadership for IT implementation in the industry is more problematic to implement (Rowlinson, 2007) than the organic shift that has been promoted for the last two decades. An example of technology leadership in IT implementation can be seen in the retail industry, where fragmentation is not as problematic, and major players can dictate where the technology should go by fitting ICT solutions within their business practices that trickle down to the downstream members of the industry (Blanchard et al., 2008). What exacerbates the problem is the capital-intensive and cash-flow problem-stricken nature of the industry. Simply put, not many companies or projects can afford the necessary capital for system adoption costs. Lack of business alignment: Earlier in this chapter we provided specific examples of the limited success that IT systems have shown in built-environment industries. More specifically, there now follow the general misalignments that we believe exist, which pertain to under-defined value propositions for different parties: Scenario 1: Additional information capabilities provided do not improve system functionality, and process functionality may or may not be improved. This is a scenario where additional data provided by ICT systems (i.e. sensor networks) cannot be used by the systems in place. In other words, data provided cannot be integrated to decision-making processes to provide the additional system functionality needed. Scenario 2: Additional information capabilities provided do improve process and overall system functionality. However, the additional functionality does not improve overall business efficiency. This is a scenario where the additional information capability does not translate into better business outcomes, as the added functionality is redundant due to bottlenecks in implementation. 444

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Scenario 3: The first two conditions are met but the improved functionality and its impact on improved business practices are not clear or substantial to the parties involved. For instance, the improved design, planning and data management will definitely improve the overall success rate of construction projects, but these by no means guarantee successful delivery. There is a very real cost component to what can only be described as an ill-defined value proposition. Scenario 4: All three conditions are met and the firm and project-level factors are all supportive of additional information-management capability, but the institutional and regulatory surroundings do not justify investing in such a system. Fundamentally, the real estate and construction industries are using old business models and trying to fit new technologies into these outdated systems. When looking at the issue of technology adaptation we need to examine our current, predominant procurement systems and examine the adequacy of the business models that we are using. We need to recognise that trying to adapt our technologies to these old models is not a viable option. As argued in several chapters in this book, the industry has been working under an old paradigm that was professionally based and undertook professionally structured processes that were conducted in silos in alignment with codes of practice. This approach, in the UK and the Commonwealth nations, was based upon the Royal Institute of British Architects (RIBA) process model. The model espoused in this Handbook is IPD that is based on information generation and information flows and requires collaborative process models and logistics rather than professionally driven processes. In IPD there is a fundamental need for information sharing and goal setting at the outset of the project. Thus, the business-process model that needs to be adopted is not the linear RIBA model but a more complex and sophisticated project execution plan that is enabled by information management and the processes associated with BIM. It is no wonder that there is a lack of fit between the ICT being adopted by the industry and in different tasks and activities in the project process model. Goodhue and Thompson (1995) suggest that the aim of technology is to assist in the successful completion of tasks and activities. Thus, any technology adopted should be well suited to the tasks and activities for achieving exceptional outcomes. However, this is not the case with BIM implementation in the real estate and construction industries because these industries have adopted BIM mainly due to legislative requirements or the requirements of key stakeholders. Thus, the idea of a fit between BIM and project process models has not been considered. The real estate and construction industries have focussed on projects as being unique and have seen project management as different from production management. In taking this attitude they have failed to take notice of the work undertaken by scholars and companies in the productproduction world where the technology-acceptance model (Davis, 1986), the theory of planned behaviour (Ajzen, 1991) and the unified theory of acceptance and use of technology (Venkatesh et al. 2003) have been used to appropriately structure organisations and shape people’s expectations in working with new and different technologies. In shaping people’s expectations, these theoretical models suggest individuals’ use of technology is mainly dependent on their perception of expected outcomes, effort they need to make, social influence (competitors and working partners) and other facilitating conditions, such as provision of training and incentives for the adoption of technology (Wixom and Todd, 2005). Such an approach is the reflection of a ‘grass-roots approach’ for systematic adoption of BIM in the built environment, as argued in Rowlinson, (2017). BIM on the other hand is actually a process rather than a technology. As such, it cannot be bolted on to our traditional procurement systems but needs to be part of a new business model 445

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that spawns a new business-process model. The business concept for the implementation of BIM in real estate and construction has not been thought through. Any change in business, as usual, requires an alignment of new ‘structures, processes’ and ICT for successful implementation (Osterwalder et al., 2005). This is where, almost universally, the implementation of IPD with BIM has failed to be successful because the business models and the business-process models have not been adapted to this new paradigm. IPD is not business-as-usual. Hence, the technologies being brought into the industry require a new business model that in turn requires better and more sophisticated business processes and logistics. IPD as a new business concept will evolve as the real estate and construction industries change from an attitude of business-asusual to focus on collaborative behaviours (Memon, 2017) and adopt collaborative procurement approaches, such as the New Engineering Contract (NEC). In short, this is a revolution in the way the real estate and construction industries need to work.

What needs to be done/overcome? Technology adoption One of the technical issues of construction informatics and data management has been the disconnect between the apps and the native applications in the industry. Hardware and software solutions used in the construction industry are not created specifically for the industry, and the patchwork supplier side of things has only complicated technology adoption and interoperability of systems. This is especially problematic when data management is extended to different lifecycles of the facilities and across the interconnectedness of facilities. The good news is that the data currently collected seems to be moving into a format-free, interoperable route. These efforts are still substantial and require time, technical expertise, and financial resources. This trend provides a fundamentally usable database for the development of applications.

Cost of adoption Despite emphasis on large-scale, one-off projects, the majority of construction projects – particularly in developed countries – are maintenance and rehabilitation-focussed in nature. Unsurprisingly, this also explains why small/micro-companies (fewer than 20 employees) comprise the overwhelming majority of the construction industry. Considering this, it is unlikely that these smaller companies can benefit from economies of scale when it comes to justifying the larger, sunk information-related costs. This is a typical example of transaction costs that has been sporadically researched in the construction industry. One possible solution for many small projects with limited time and resources to benefit from IT investment is bundling maintenance and rehabilitation projects into asset-management contracts. This would allow for a longerterm engagement with parties, more opportunities to distribute the costs over larger number of projects, and time to reap the benefits from added information capabilities.

How to enable better information management In this section, we summarise the need for a holistic approach to IT management, discuss some potential applications in the built environment and introduce our data-management protocol which can seamlessly integrate across many applications to enable improved capability. Figure 20.1 illustrates a three-condition approach to enable a more coherent and integrated information-management environment. 446

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Technical Issues Process Improvements Technical Issues Granular data Access Control Protocol …

Governance Issues System Improvements Technical Issues Granular data Access Control Protocol …

Acceptance Issues Business Improvements Faster completion Greater efficiency Improved safety …

Manufacturers/ICT Providers

Alliance

Industry

Regulation/Standards

Legal Framework

Training

Figure 20.1  Information management implementation-framework overview

Condition 1: The proposed IT systems must provide better data capabilities within a process. This can be better, more granular, new, more accessible, data. Data does not mean information but, better data has more potential for better information and, therefore, decision-making. Condition 2: The improved information-management capability within the processes must translate into improved system functionality. This does not mean individual process improvements impacting on system functionality is the sole purpose here. Indeed, crossprocess capability is of great importance. Condition 3: The improved system functionality must translate into better business models and project outcomes. More often than not, the first two conditions can be met partially or fully, but better outcomes for the principal parties involved do not materialise because the investment requirements are not justified, or the institutional and regulatory environment within which the projects operate do not allow for the agile decision-making that better data can afford.

Big Data in the built environment and moving forward Big-data analysis can provide deep insights into overall business processes, project progress, and resource utilisation but these insights come at the cost of data collection. This problem only amplifies when the true benefit of Big-Data analytics is to be realised across multiple and traditional co-dependent but independently managed systems. For instance, a robust and reliable transport network can lead to highly accurate travel times that can be augmented into electrical systems used within residences to achieve better optimisation of resource utilisation. How granular each system and the processes within the two systems need to be, and how much data needs to be collected, are questions that still need answering. More and more granular data will always bring more costs in system installation and maintenance for data collection, storage and 447

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data processing and interpretation costs. Thus, rather than collecting data to feed a machinery of analytics it is important to find the right balance between collection effort, costs and overall benefits. The common trend of collecting more and more data in the hope of unearthing inefficiencies in the processes too often results in an increased overhead that causes inefficiencies. This section investigates how much data is too much data.

Information vs data Data are simply facts or figures – bits of information, but not information itself. When data are processed, interpreted, organised, structured or presented, so as to make them meaningful or useful, they are then called information. Information provides context for data (Lazer, Kennedy, King and Vespignani, 2014). With today’s technology it is possible to generate information from data without context because such context can be generated from the data itself, and therefore can provide insights beyond the commonly used analytics. However, this is only possible if enough data are available: Big Data. While the generation of information from unstructured data is especially useful in areas where context has not yet been defined (e.g. bio-informatics) it has its limitations in areas where the context is generally well defined, like in many engineering disciplines – with the exception of those dealing with large quantities of information provided through sensor networks (e.g. traffic operations, building health). In these areas one does not expect to identify a new context for the data, as data are purposefully collected and not continuously generated. Enabling Big-Data analytics in these fields requires a vast effort of data collection without any evidence that the results offer any additional insights or improvements to common processes or system functionality.

Balance To find the right balance it is important to understand that Big-Data analytics is not equivalent to data driven decision-making, but only one part of it. Effective analysis of Big Data requires technology to help collect, store, process, transform and structure it in preparation for use in supporting decisions. In the next step, mathematics is used to analyse and visualise the data and to extract insights in response to clearly defined business problems, questions and hypotheses through algorithmic computations. The real value however is added in a final step that introduces business knowledge, design thinking, and behavioural science to address business problems that are ill-defined and shifting and where the factors affecting the problem are not completely understood. Without this final step, Big-Data analysis loses its appeal and is unable to enhance knowledge.

Potential Big-Data implications and things that need attention Consider a practical application where travel speed and travel volume towards the airport could inform staff about the expected fluctuation in demand on check-in counters, facility usage and service requirements. A model used for such predictions is sensitive to what inputs represent, and there is no straightforward connection of various data types to that system as outlined above. However, if there existed a common language that allowed for interrogation of data in a more natural way, then it would open doors for more practical applications that can be scaled beyond one-off research studies or showcases that require unsustainable hardwiring of data sources that would break with every change (Soylu, Giese, Jimenez-Ruiz, Kharlamov, Zheleznyakov and Horrocks, 2013). It could enable truly smart cities, and true 448

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communication between application-built systems to create a holistic picture of an area, precinct, or just a single building. There are many single-purpose sensors that feed single systems, which is the business-as-usual paradigm and has been successful in process improvement. However, much greater benefits can be realised if these sensors, and subsequently systems, can ‘talk’ to each other. If seamless sensordata integration can be achieved, the resulting data set and ability to make decisions based on this integrated data could provide a better outcome than the combined effectiveness of individually acting systems of single-sensor inputs. Closed-circuit television (CCTV) cameras that collect sensitive information could still provide utilisation information of areas without compromising privacy. When overlain with air-quality or water-consumption data, a building could make smarter decisions or create alerts if something is odd. Some questions that can enable these better decision-making capabilities are: Does the energy consumption match the utilisation of the area? What are common trends that allow for optimisation?

Smart and connected cities The data issues described above pertain to individual buildings and infrastructure components, and single phases of project life-cycles. Perhaps encouraged by the potential of Big-Data, analytics and Internet of Things (IoT) solutions highlight what can be done with technology and the substantial strides that can be made to make smart cities a reality. The main premise of these initiatives is to provide additional functionality for the built environment, using distributed sensor networks (i.e. having automated street lights for pedestrian traffic for safety, better energy management through occupancy measurement, etc.). These ambitious objectives bring additional complexities to the issues outlined above as cross-platform data integration and scalability of the data-management practices also become mainstream issues. For instance, energy companies need to predict the usage of electricity and are interested in understanding when people arrive home and turn on the stove, air-conditioning, and possibly charge their electric vehicle upon arrival (Gharaibeh, Salahuddin, Hussini, Khreishah, Khalil, Guizani and Al-Fuqaha, 2017). Traditionally, this information is synthesised from historic data using trend/prediction analysis. Instead, there are real opportunities to benefit from cross-system integration, i.e., different systems can talk to each other to enable better decision-making capability in (near) real time. To enable this, different systems need a common language. This is a wellknown and studied problem in the interoperability space, with reports quantifying the cost of the lack of such systems for fringe applications within the built environment (Gallaher et al., 2004). The conservative figures provided in this report are likely to have increased substantially in the last decade and a half, but the problems described are still relevant, and perhaps more emphasised. While most resources are invested into developing new technologies, and to make sensors smaller, more powerful and more independent from other systems, more focus should be diverted to connecting these sensor systems with an open, and independent data protocol that broadcasts to subscribers useful, non-identifiable information in real time.

Proposition, short to medium-term goals To use Big Data effectively a framework is required that separates the data collection from data storage and data access, as conceptually illustrated in Figure 20.2. Such a framework allows the compilation of practice-oriented applications that can use one or multiple layers without the need to tackle the whole path from sensor to information. Some applications will provide more data to the framework, some will provide tools for data analysis, and others will simply make data easily 449

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and readily accessible. The communication of these applications is controlled by a middleware layer that enables the aforementioned separation of layers. Using a general and sector-specific ontology, the collected data becomes accessible through discovery and interrogation of connected data sources and tools. Experts can then connect those sources and tools to purpose-built applications. The ontology, like natural language, will be extended over time and provide a more and more rich source of connecting data to unlock the real potential of Big Data. The general ontology is used for data discovery, negotiation of delivery format, and connecting data with available tools and algorithms for manipulation. Further, it defines high-level areas, elements and concepts that can be used by laymen as well as specialists in the field. To meet the needs of experts, a sector-specific ontology is added to unlock the specifics of the data and enable more sophisticated tools that would be of limited use for others. The result is a multi-tier data-interrogation network that provides intuitive and fast access to data from various sources and formats, ready to use, and without the need for a tedious data-preparation process.

Conclusion This chapter sought to answer the questions: •• •• ••

Why is there a reluctance to share a common data environment and to collaborate in bringing together data that can be analysed and used for the efficient operation of the facility? What are the inhibitors to the wide-ranging collection of data and its use as information in the construction industry? What are the preconditions necessary for a change in such working practices and attitudes and that will enable integrated information management and data collection?

We suggested answers throughout the chapter and summarise our response as follows. The construction and greater built environment suffers from a lack of integrated information that can enable better decision-making for all parties involved across different projects. There are many reasons that can create this phenomenon but lack of business alignment and benefit realisation are immediate concerns. To allow for short and medium-term information integration, the following technical challenges need to be addressed initially:

Interface Discovery

Application

Sensor Network

Toolbox

Document Base

Figure 20.2  Multi-tier data-interrogation framework

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•• ••

Creating/adopting open and common standards to enable interchangeable data across the board (they are currently siloed in software-defined environments). Creating/adopting tools and protocols to enable responsible data sharing to protect the rights and privacy of the project participants.

Once the technical challenges are clearly identified, and potential solutions are put forward as presented earlier in this chapter (See Figure 20.2), certain environmental and managerial limitations need to be addressed: •• •• ••

A data-management governance framework needs to be implemented to clarify the roles and responsibilities that pertain to data collection, storage and management. A set of engagement rules (e.g. who pays for what, where is data hosted, when does handover, if any, take place, etc.). A clear set of rules in terms of data accessibility.

The successful implementation of the rules and frameworks outlined above, when set and put in place, will provide rules and management guidelines to allow for better information management. However, these solutions will not gain large-scale acceptance unless the following criteria are met: •• ••

Major stakeholders in the construction industry should form alliances around data management to overcome the fragmentation issue. Clear identification of benefits from better information-management practices to stimulate end-user interest in data sharing.

Notes 1 Information and communication technology (ICT) is also used, and will be the notation in this chapter. 2 Interestingly, searching BIM in Google Scholar returns 4.2 million results but these results are not limited to the construction industry.

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21 PROCESSES AND MEANS ELEMENTS OF THE IPD COLLABORATION FRAMEWORK Derek H. T. Walker and Beverley Lloyd-Walker

Introduction Chapter 2 presented an overview of the Collaborative Framework in broad terms. Three components of the Collaboration Framework were illustrated in Figure 2.2, comprising platform facilities; behaviours and processes; routines and means, together with the 16 elements of the framework (Walker and Lloyd-Walker, 2015). This chapter is focussed on the third component of the framework and is composed of six elements, each with several sub-elements. Elements and sub-elements of the Collaboration Framework are discussed in detail in Chapters 2, 9, 15 and this chapter. We argued from our analysis of the Walker and LloydWalker (2015) study’s data that effective collaboration in integrated project delivery (IPD) projects is dependent on the complementary interaction of three components. Figure 21.1 illustrates this concept together with the focus for this chapter. Chapters 2, 9 and 15 discuss the institutional-theory (Scott, 2014) perspective applied to alliancing. Figure 21.1 may be viewed from this perspective, where the platform foundational facilities provide a regulative platform that shapes what is possible in terms of decisions and actions. The normative pillar could be seen as the behavioural factors driving the culture and mindset that shapes behaviours. Behavioural factors in turn are influenced and directed through the ‘processes, routines and means’ component discussed in this chapter. The purpose of this chapter is to provide more detailed discussion and explanation of the six elements comprising the third component: the processes, routines and means component, together with sub-elements that were identified from that research work. Chapter 9 provides details of component-one elements and sub-elements and Chapter 15 does so for component two. We now explain each of the elements and sub-elements and how they fit with theory and we also provide empirical evidence in quotes from those we have interviewed to illuminate our argument. The elements and sub-elements are illustrated in Figure 21.2. At the end of each section we provide a rating for a research project underway at the time of writing this chapter, based on recorded and transcribed interviews with five senior alliance-team managers who were members of the Alliance Management Team (AMT) or Alliance Leadership Team (ALT). These alliance subject matter experts were interviewed for the study (Walker et al., 2018) undertaken

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Processes and means elements

The project outcome achieving KRAs through IPD collaboration

The focus of this chapter

Processes, routines and means – drivers as PM enacted practice

Behavioural factors – drivers as normative practices

Platform foundational facilities Figure 21.1  The Collaboration Framework concept

in 2017–2018 into the Level Crossing Removal Program (LXRP) Alliance Package 1, which was outlined in Chapter 9. This data is used to rate each Collaboration Framework platform element for the processes, routines and means component. Cultural drivers Enablers of consensus Inhibitors of consensus

11 – Consensus decision making

Processes, routines and means

Lessons-learned knowledge transfer Capacity to adapt to new ideas A culture of skills and learning development

12 – Focus on learning and continuous improvement

Incentive arrangements Managing tension between innovation and incentivisation

13 – Incentive arrangements

14 – Pragmatic learning-in-action 15 – Transparency and open-book processes 16 – Mutual dependencies and accountability

Action-learning Coaching and mentoring Transparency Accountability Characteristics of mutual dependency Enhancing enablers of mutual dependency Countering inhibitors of mutual dependency

Figure 21.2  Processes, routines and means driving PM-enacted practice

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Element 11 – Consensus decision-making This chapter is not focussed on how day-to-day decisions are made at the individual, dyad or small-team sub-group level. Its main focus is on how decisions are made within an integrated project delivery (IPD) context, more specifically on highly collaborative alliancing projects or programs. The specific focus is on the management level through the governance mechanisms of an alliance-management team (AMT) and alliance leadership team (ALT). When arriving at a group decision, the main outcome possibilities are a majority, an autocratic minority or a consensus decision. However, the process of making a decision starts with a fundamental premise that frames the identified problem and a hypothesis about its solution. This immediately flags a potential issue in that the problem as framed may not be the real problem and also the hypothesis may be poorly constructed for the purpose of solving the problem thus energy is expended in a misguided way. Considerable effort and energy is needed to adequately frame the problem, an hypothesis to solve the problem and the solution itself before any action is taken and evaluated. The processes, routines and means for this consensus need to take stock of cultural drivers of consensus by the team and enabling and inhibiting forces acting upon the situation and teams involved. The criterion for rating the level of authentic leadership on IPD-alliancing projects, according to Walker and Lloyd-Walker (2015, p163) is:

Low consensus decision-making is manifested by a highly hierarchical project team leaders’ leadership style where power and influence determine how decisions are made and where the expected response is that decisions are implemented without question or complaint. It is also manifested by a tendency for a domination of top-down directives being issued as edicts. High consensus decision-making is manifested by a highly egalitarian and collaborative leadership style of project-team leaders. Issues and problems requiring a decision develop out of inclusive knowledge sharing and discussion of perspectives, expected intended and unintended consequences and implications of decisions. High levels of feedback, good or bad, are sought.

Why take consensus decisions? The majority decision may or may not reflect the most efficient or effective decision. The outcome will, by definition, ignore or at best undervalue the minority position. Autocratic minority decision-making also assumes that those making the decision are correct, have the authority to do so and that their decision will be implemented as articulated. However, they may be wrong in all their assumptions and they rely on their authority and power to influence how that decision is implemented in accordance with their wishes. A consensus decision takes shared framing and analysis to formulate a hypothesis and also shared commitment to implement the decision as agreed. There are many self-help books and numerous articles and authoritative sources available about how best to make decisions in a variety of contexts. Klein, for example, outlines six aspects of making effective decisions (1997, p344): ‘recognising patterns (situation awareness); making fine perceptual discriminations; recognising typicality and detecting anomalies; mentally simulating future states (to evaluate courses of action) and past states (to generate explanations for events); improvising; and adapting to events (i.e. metacognition)’. These aspects typically fall 456

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within capabilities at the higher end of a range from novice to expert (Dreyfus, 2004). Cicmil, in her PhD thesis (2003), and later in a specific paper on re-thinking project management (PM) set out a hierarchy of PM expertise following the Dreyfus model, with expertise steps ranging from: novice (where templates and guides are considered ‘gospel’ and not challenged); advanced beginner (where there is a realisation of the limitation of these templates and guides to cover all circumstances); competent performer (where there is a prioritisation of competing approaches and questioning of assumptions and context validity of the ‘set’ formulae or guidelines); proficient performer (where there is a confident and measured intuition applied, based on guideline-use experience and perceived situational context); and expert or virtuoso (where the application of experience-based intuition is effortless and naturally instinctive) (Cicmil et al., 2006, p680). Purely from a knowledge, skill and expertise perspective, it makes sense to use the entire team’s talent effectively by allowing expression of their cumulative knowledge, cognitive, social and intuitive powers. This helps to shape more reliable and effective problem-framing, factfinding, sense-making, critical thinking and analytical powers to craft a decision. IPD forms, such as alliancing, value the engagement of a range of perspectives to gain intellectual and social capital to make best-for-project decisions. A key element of the IPD alliance is its integration of the owner-participant (OP) with the design, delivery and often project end-operator, nonowner alliance participants (NOPs). This integration allows a far wider range of perspectives to be brought to the table for decision-making that is traditionally the base for other project delivery forms. Therefore, this presents a strong argument for favouring a consensus rather than a majority or autocratic minority decision-framing and making process. The wider perspectives should help improve problem-framing because the OP most likely has a lot of tacit knowledge and much expertise about the project benefits’ needs and possibly knowledge of political considerations. The design and delivery NOPs most likely have tacit knowledge and expertise about design and delivery aspects and the operator NOP most likely has much tacit knowledge and expertise about operational efficiency and effectiveness issues. Together, their expertise is greater than the sum of the parts. This is partly because tacit knowledge is notoriously difficult to articulate and formally diffuse through documented means; tacit knowledge is best exchanged through collaborative practice (Polanyi, 1997; Leonard and Sensiper, 1998; Koskinen et al., 2003). Given the value of an integrated team fully engaging in the decision formulating and making process, it makes sense that respect be shown to all participants to allow the time for gaining a unanimous decision. Other elements in this component support this principal. As mentioned in Chapter 9, a joint governance measure is that the project-alliance agreement requires joint and several responsibility and accountability for the project outcome and that the incentivisation routines and means are based on the total project performance and not based on the performance of an individual team for their part of the work. Additionally, an important requirement of the project (or program) alliance agreement is a no-litigation clause (explained in more depth in a later subsection) for any decisions or actions taken by alliance participants, unless they are illegal or manifestly incompetent. It therefore makes total sense that if parties cannot sue each other and are jointly incentivised that decisions, and the framing process leading up to problemsolving, should be made by consensus.

How does consensus decision-making take place? In an IPD-alliance context, consensus decision-making by teams refers to the extent to which strategic and project operational executive-level alliance participants achieve total agreement on a project or program decisions made at the AMT- and ALT-level meetings. It also refers 457

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to subsequent unanimity that cascades through the project design and delivery teams about the validity and authority of those decisions and how they are interpreted and enacted. Unanimous agreement on a decision may take extensive time for discussion, exploration and testing mental models, and may be seen as being against the interests of speedy decisions and actions to counter crises. However, time invested in gaining a unanimously agreed view on an issue may be set aside depending on how quickly such decisions may be implemented. This is because the meaning of the decision is generally clear and so greater energy may be expended in interpreting how to best implement the decision rather than effort being expended in making sense of a policy or directive. Decision-making has attracted much attention over past decades, with various theories about the decision-making process accepting that it is often undertaken in conditions of scant information, particularly at the front end of projects where much is unknown and undecided and where what is known may rapidly become out of date and thus misleading (Williams et al., 2009; Williams and Samset, 2010). Early scholars of decision-making note that it is also limited, the term ‘bounded rationality’ is often used to describe what Simon (1991, p132) explains as ‘the limits upon the ability of human beings to adapt optimally, or even satisfactorily, to complex environments’. Additionally, many strategic decisions, such as whether to proceed with a project, may be based on half-truths, lies and optimism bias (Flyvbjerg et al., 2003; Flyvbjerg, 2009). How may decision-making be structured to be more effective then; more reliable and trustworthy? One approach to address this issue is to integrate teams when making important decisions so that sharing their perspectives may help steer them through intelligent, genuine dialogue towards a rich understanding of a problem and its wider context. This may then lead to a reasoned and reasonable decision. If a decision made in this way is to be of value, and truly shared, then logically it should be made by consensus. Langley et al. (1995) describe five models of decision-making, drawing upon the work of Herbert Simon (1957; 1997) and other decision-making theorists. Their Model 1 follows a logical and systematic way to methodically progress through known facts to arrive at a logical conclusion following an intelligence-gathering phase, a solution-design option phase and then a choice-making phase. Model 2 follows a chaotic path where ‘decisions appear to emerge in an inconsistent fashion’ (1995, p263). Model 3 is described as an iterative process, similar to Model 1 but with several dynamic factors emerging to disrupt the process and forcing re-framing, re-calibration and revising options and choices, often with authorisation points in-between iterations. Model 4 states that decision-making is a convergent process that follows a trajectory of discussion and analysis to filter the ‘decision’ along a particular path towards its conclusion in a series of converging approximations. Their last model, Model 5, envisages moderation of Model 4 but with an important feature of decision-makers as shapers being guided towards a co-created perfect future decision. Here their insights, inspiration and intuitions, based on past reflection on what their experience taught them, helps them perform the role of carrying their memories and reflections to inspire insights that help convergence towards a decision. So what is new? One evolution of this five-model thinking emerged with Snowden’s Cynefin Framework (Kurtz and Snowden, 2003; Snowden and Boone, 2007). This is explained in some detail in Chapter 9, so we do not repeat that discussion other than to reiterate that decision-making should be consistent with the context in which it occurs. The Cynefin Framework describes four domains or contexts, two as ordered and two as unordered, with a fifth domain of uncertainty described as disorder, where most people find themselves unsure of which domain they are actually in. The Cynefin Framework’s complicated domain has many unknown unknowns with multiple possible appropriate ‘correct’ answers. Therefore, multiple perspectives gained from a team of experts with diverse background experiences are important, so that high-quality 458

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sense-making may take place about a situation, arriving at an appropriate course of action. Here, having the wisdom and compound experience of a team of experts can maximise the knowledge to be drawn upon for analysis. For the Cynefin Framework’s complex domain, the situation contains many unknowable unknowns and so Snowden and Boone recommend that the leadership team should: Create environments and experiments that allow patterns to emerge . . . Use methods that can help generate ideas: Open up discussion (as through large group methods); set barriers; stimulate attractors; encourage dissent and diversity; and manage starting conditions and monitor for emergence . . . (Snowden and Boone, 2007, p73) so the need for collaboration, sense-making and arriving at consensus is even more urgent than for complicated situations. The role of consensus here seems to be about gaining a shared view of the framing of what the problem situation actually is and, broadly, what probing action can be taken so that rapid sensing and evaluation can provide feedback to guide further action. Consensus in decision-making does not mean that everyone meekly agrees to a position. The process of making decisions and the routine involves purposefully leaving the means to take action vague while keeping the aims crystal clear and agreeing to navigate solutions by agreeing on end states rather than developing detailed plans. We see consensus in the context of complex projects in which integrated teams collaborate as a state of mutual understanding, while acknowledging that the foundations for that understanding may be challenged and remain dynamic.

Cultural drivers of unanimous consensus decision-making Chapter 10 discusses the cultural perspective of IPD alliancing in depth. The key focussed on in this chapter are those that impact power and information asymmetries and influence the ability for team members to challenge assumptions, seek clarity if they struggle to understand anything, and to be open and transparent. These inform the concept of how accountability and responsibility is applied to committing to a consensus opinion. Walker and Lloyd-Walker (2015, p203) identify examples of the cultural drivers of projectteam participants’ consensus-decision-making thinking. The explain these as: expecting that those with relevant expertise to contribute opinion and discussion do so regardless of their place within a hierarchy; welcoming assumptions being challenged and being careful to consider a range of perspectives when making decisions; being respectful of others’ perspectives but assertively arguing their points of view to arrive at a balanced conclusion; and expecting that a consensus will emerge from meaningful debate and that consensus-driven decisions will lead to more effective actions when people are not afraid to raise the issue of reviewing a consensusbased decision if they believe that the basis, context and underlying assumptions for a decision have significantly changed. Chapter 10 discussed the theoretical aspects of Hofstede’s (1983;1991) seminal work on cultural dimensions and also the theories and content that were delivered by the Global Leadership and Organizational Behaviour Effectiveness (GLOBE) study (House et al., 2004; Chhokar et al., 2008). To recap briefly, Hofstede identified five national cultural characteristics that impacted people’s perception of power legitimacy, information sharing and sense of individualism or collectivism. The GLOBE study investigated middle managers from many counties across the world 459

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about their perception of a number of cultural dimensions from the perspective of how they felt these should be and how they perceived they actually are. This helped to unearth the values of those engaged in the study and from that we gain a better understanding of how they favoured one leadership-followership style over another and also how they might reach consensus on various issues. Both research studies have adopted common concepts but used slightly different approaches to how cultural dimensions may be measured (Hofstede, 2006; Javidan et al., 2006); deeper discussion about this is presented in Chapter 10. We see from Table 21.1 that the cultural impact on facilitating collaboration and consensus may be significant. While the cultural studies had a focus and aim on investigating national cultural traits ,the concepts may also be useful in deciding a particular organisational culture. As Schein (1985) argued decades ago, culture, at its taproot level, is about common and shared assumptions, with the deeper level of intensity being about shared visions and with observable artefacts comprising the superficial level of the visibility of a culture. We see evidence of many subcultures that may be poorly aligned or misaligned, for example, subcultures similar to that observed by Schein (1996) in organisations: the three executive, engineering, and operatives communities. We may observe many subcultures operating at the task level, small-group and project-team levels, so we can appreciate that the way people see the world, their core values and the environment that shapes their way of expressing their ‘truth’ and has a significant impact on their capacity to make unanimous decisions. Table 21.1 provides observations about cultural impact that may help us better understand drivers of enabling or inhibiting consensus and how power and information asymmetry contribute to this. Walker and Lloyd-Walker (2015, p203) identify examples of ways of thinking about cultural influences on consensus-making by team participants: expecting that those with relevant expertise to contribute opinion and discussion input do so regardless of their place within a hierarchy; welcoming assumptions being challenged and being careful to consider a range of perspectives when making decisions; being respectful of others’ perspective but also assertively arguing their position to arrive at a balanced and shared conclusion; and expecting that a consensus will emerge from a meaningful debate and that more effectively action will follow consensus-driven decisions when they are not afraid to raise the issue of reviewing a consensus-based decision if they believe that the basis, context and underlying assumptions for those decisions have changed. LXRP-2, interviewed in the LXRP Alliance Package 1 study (Walker et al., 2018), made an observation that typifies the culture that led to consensus on a radical project program rethink. It was that target. It was resetting the program and the process we went through to convince everybody that we were going to do it differently. It was throwing away what we tendered to do and doing it really differently. He explained in our interview with him that the contract was awarded late but with a fixed handover target date. This led them to radically rethink the program. This was because perspectives and ideas came from the integrated team. They were able to challenge many more assumptions than would be possible in any traditional business-as-usual (BAU) project delivery approach. The culture was open, with no discernible power or knowledge asymmetries. This means that power distance was exceptionally low, everyone’s perspective was respected and their ideas listened to intently. There was a collective sense of priority for a best-for-project outcome. The culture was distinctly no-blame.

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Power distance Power distance Large or small power distance: Power distance reflects the degree to which a society accepts a hierarchical system and unequal distribution of power. Masculinity Gender egalitarianism; Humane versus orientation; and femininity Performance orientation Hofstede’s masculinity dimension reflects the degree to which a society defines achievement in terms of success and the acquisition of money or material possessions. The GLOBE’s gender egalitarianism, humane and performance orientation relate to similar cultural values. Individualism Assertiveness; Family versus collectivism; Institutional collectivism collectivism. Hofstede’s individualism versus collectivism: individualism reflects the degree to which a society values independence from group membership. The GLOBE’s assertiveness and both family and institutional collectivism relate to similar cultural values. Uncertainty Uncertainty avoidance avoidance Hofstede’s Strong or weak uncertainty avoidance reflects the degree to which a society tolerates ambiguous situations and the extent to which it has created institutions and beliefs to minimise or avoid these situations. Confucian Future orientation dynamism Confucian dynamism is associated with the teaching of Confucius about how people are pragmatic and futureorientated with a focus on tradition and obligations.

Hofstede dimensions

In some societies, people do not feel threatened by accepting ambiguity and uncertainty. In others, uncertainty is seen as disruptive and makes people psychologically uncomfortable. Strong uncertainty-avoidance societies reduce uncertainty and limit risk by ordering and structuring things, imposing rules and systems. Consensus is best achieved through team members clearly articulating their sense of comfort or discomfort about uncertainty so that a more informed debate can take place to work through issues and arrive at genuine consensus. In societies with high Confucian-dynamism scores, people tend to emphasise values that favour longterm outcomes. Relationship building and mutual respect are important because they facilitate long-term outcomes. Low Confucian-dynamism scores are linked to normative and short-term orientation, quick results are expected, and people are more concerned with stability.

This is concerned with the form and manner of the relationship between an individual and others in the society. In individualist cultures, people look after themselves and their direct families only, and they are expected to conform; while in collectivist cultures, people belong to a larger group that takes care of their interests in exchange for loyalty – relationships are therefore more tightly structured. Individualism may lead to assertive individualistic behaviour or assertive collectivist behaviours. Consensus is more likely to align with collective rather than individualistic norms and culture.

Some societies with sharp and strict divisions turn masculine; others, when the divisions are loose and blurred, turn feminine. In masculine societies, people admire success. In feminine societies, people pursue values such as relationship orientation, concern for quality of life, etc. The artefacts that express ‘success’ may also differ markedly between these dimensions of culture. This affects the likely respect for alternative perspective-taking by team members in openly discussing issues to achieve consensus. It also impacts the degree to which they may feel comfortable expressing contrary views to the perceived majority and the manner in which it may be expressed.

Large power distance indicates larger inequalities between the members in those societies with power and those without. IPD alliancing favours smaller power distance to facilitate team members to have the right to voice their opinions and expect them to be seriously considered.

Implication for consensus

Table 21.1  Cultural dimensions affecting effective consensus in decision-making (Adapted from: Rowlinson et al., 2008, p184–285)

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Enablers of consensus Organisational, structural, as well as behavioural enablers facilitate and support consensus decision-making and action-taking. Walker and Lloyd-Walker (2015, p203) identify examples of ways of thinking about enablers of consensus-making by team participants: ensuring that organisations are structured to facilitate communication between hierarchical and discipline levels within the project; being mindful about national and organisational/discipline cultural norms and expectations, to ensure that they design mechanisms to open up dialogue and challenge assumptions that ensures that each party to a decision is allowed to work through any difficulties in understanding broader perspectives; understanding the value of face-to-face as well as electronic meetings to allow trust and commitment to ‘grow’ and be sustained, resulting in ease of consensus-based decision-making. The governance arrangements and, in particular, the contract, as explained in Chapter 9 on the discussion of the Collaboration Framework Element 2, had an alliance agreement that stressed the terms ‘we’ rather than ‘you’, and joint responsibility and accountability for the whole Package 1 outcome rather than for each participant’s individual part of the works. This contractual wording reinforced and enabled unity of purpose through explicit joint accountability and responsibility so that it made sense for decisions to be made unanimously. The organisational structure, with the roles of a unified AMT taking joint responsibility and accountability at the project delivery level, and the ALT taking a united-team approach towards best-for-program oversight, rather than looking after separate participant organisational interests, enabled them to shape a consensus view. When challenges arose, such as the need to completely rethink the project delivery plan, the ALT was able to use its program-external links to facilitate access to knowledge that the AMT may not have had access to. The ALT was also able to provide support with political and institutional influence once it was convinced that a unanimous AMT position was proposed that convinced the ALT to support that idea. One important example of this was the proposal to remove the central express rail-line track that ended up saving significantly on time and helped the delivery of works to be radically changed from the original winning project submission. The unanimous support, and the unified team-understanding surrounding this technical innovation, enabled the ALT to help champion the idea. It proved to be both sufficiently efficient and safe to become a best-practice solution to be used on other similar package work. LXRP-4 explained the situation as follows: It was his proposal [an AMT participant] to the alliance, the alliance said, ‘We can make that work’. As a [operator] person he could go back into the [rail operator] business trusted . . .‘You know what, I’m driving this for all the right reasons, this is a great alliance outcome, but if we just switch off the track, middle track express services for a period of time we can take the job from this long to this long, this cost to this cost’, but it’s around the operator saying, ‘We’re satisfied with that . . . it’s safe, it’s reasonable, it’s practical’. So quite pivotal in that regard, to put that program in by six months, whatever it was. This example illustrates how a member of the AMT influenced others in the AMT, ALT and the rail operator’s organisation to gain support for a unanimous decision. Unanimity was based on technical background expertise and experience to work through a team suggestion and for the AMT team to arrive at a credible and persuasive position that others (such as the ALT) and the rail operator organisation could approve and support. It demonstrates the power of a unanimous decision. 462

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Inhibitors of consensus While mainly these are the reverse of enablers, a notable inhibitor to consensus is a feeling of participants being coerced or railroaded into a decision without sufficient time, information or their voices to be heard and considered. Lack of motivation to commit the energy and intellectual effort to arrive at a consensus can be an inhibitor. Also, as noted in the discussion of decision-making under conditions of chaos and complexity there are times when there is a need for rapid action and reflection, in which consensus decision-making is not viable. Finally, the focus on consensus in this element does not include entities that provide stakeholder input but are not required to live by the decisions to be made. As noted in Chapter 14, on stakeholder engagement, some stakeholders will press for a position based on their interests alone, whereas the alliance parties are the people that take responsibility and accountability for decisions made. Non-alliance (as opposed to alliance) participant stakeholders’ feedback and input of views and perspectives will be regarded in IPD projects and considered on their merits and the impact on the project outcome without demanding consensus on those positions. Walker and Lloyd-Walker (2015, p204) identify examples of ways of thinking about inhibitors of consensus-making by team participants: ensuring that organisations avoid being poorly resourced and structured to facilitate communication between hierarchical and discipline levels within the project; avoiding being poorly mindful about national and organisational/discipline cultural norms and expectations to ensure that they design mechanism to open up dialogue and challenge assumptions, to ensure that each party to a decision is allowed to work through any difficulties in understanding broader perspectives; and avoiding misunderstanding or ignoring the value of face-to-face as well as electronic meetings to allow trust and commitment to be ‘grown’ and sustained that may result in ease of consensus in decision-making. Central to this sub-element is the need to ensure that the teams are sufficiently resourced to be able to frame a problem, gather the required information and knowledge and make a coherent decision that can be supported unanimously with confidence. One inhibitor, present in the most effective of alliances for consensus decision-making, is ambiguity in stated aims and objectives. The difficulty arises in interpretation or disagreement about what a best-for-project outcome actually means. LXRP-4 made a comment about the body set up to engage with community, regarding urban planning and local issues. He stated: ‘what are the broader precinct and urban design outcomes we’re looking for as part of the level crossing removal?’ and it’s been something that we’re quite passionate about, and part of our – well, we call it the ‘LXRA blueprint’ – but one of our objectives is to provide great places. So ultimately that’s an objective to do more than what a traditional level crossing might deliver. So create that legacy for the community. This illustrates the slightly vague and ambiguous term ‘legacy for the community’. It could be conceivable that this aim could cause much debate and effort in reconciling that with a value for money objective.

Rating the consensus-decision-making element The indicative rating for the LXRP Package 1 alliance for this element is based upon the criterion for the element presented at the beginning of this section with 1 represented as very low and 5 for very high we rate this as 5. We suggest this score because: 463

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1

2

Alliance participants had managed at least one major rethink of the project plan and had to prepare a united and cogent position to take to the ALT and other stakeholder bodies to gain acceptance, endorsement and authority to proceed from plan to action. The alliance culture provided a supportive respectful workplace where it was safe to explore ideas that allowed cross-disciplinary ideation and input from sources not usually available in non-alliance situations. One example of this was the rail operator having significant idea that he was able to advance and convince others of its effectiveness.

Element 12 – Focus on Learning and continuous improvement Discussion of the Element 8 commitment to be innovative in Chapter 15 provides useful background for this subsection for the behavioural perspective that demonstrates motivation to be innovative. Chapter 8 discussed the role of design thinking in IPD alliancing and Chapter 18 discussed innovation diffusion. In all these chapters there were references to the processes, routines and means that facilitates collaborative innovation. Focus on learning and continuous improvement in terms of the processes, routines and means refers to providing a compelling projects-as-learning value proposition and the practice of transforming learning opportunities into continuous improvement. It builds on content discussed in Chapters 8, 15 and 18 in explaining how this may practically happen in an IPDalliance context. The criterion for rating the level of focus on learning and continuous improvement on IPDalliancing projects, according to Walker and Lloyd-Walker (2015, p163) is:

Low focus on learning and continuous improvement is manifested by actors within collaborative arrangements, and a network delivering a project, being blind to and failing to grasp the potential competitive advantage of applying presented learning opportunities. High focus on learning and continuous improvement is manifested by actors within collaborative arrangements and a network delivering a project being alert and aware of opportunities for improvement and being successful in grasping competitive advantage through effectively harvesting lessons learned.

Lessons-learned knowledge transfer Effective alliances participants need to be aware of and familiar with the mechanisms that projects offer for opportunities for learning. They should be aware of the owner-participant’s (OP’s) learning and continuous improvement preferences and needs, how other team members operate, and how to best collaborate with them to learn from the project and to gain technical, process or interpersonal knowledge. Some projects: vanguard (Frederiksen and Davies, 2008) or skunk-factory projects (Gwynne, 1997), are specifically established as learning laboratories for radical new innovation or for more methodical incremental improvement. Alliancing in Australia requires a focus on effective lessons-learned knowledge transfer to avoid lessons learned becoming lessons forgotten or ignored and, as noted for Element 8 in Chapter 15, POs expect alliancing and IPD projects to deliver innovation to achieve best-value project solutions (Department of Infrastructure and Transport, 2011b). Alliance participants 464

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need to be both willing and able to innovate. This requires behavioural mechanisms that enable and empower them to be innovative to be supported by specific processes, routines and means to do so. Walker and Lloyd-Walker (2015, p207) identify examples of ways of thinking about transferring and diffusing lessons learned by team participants through: understanding the purpose and aim of the project so that they can adapt new ideas to better direct their focus on effective rather than purely efficiency continuous improvement; understanding and being able to effectively frame lessons learned within the context of the project and the socio-political environment in which the project is delivered; and understanding the value proposition of those who may benefit to be familiar with lessons learned about the projects performance and challenges faced to enable continuous improvement to take place. The collection and recording of lessons learned, innovations made and their impact has been a difficult issue for a long time. Teams are temporary, they are always hard pressed to deliver project outputs and, even though an explicit outcome from project work may be articulated, the means and routines to do so are often poorly developed. Post-action reports of lessons learned for military campaigns and projects have been routinely used for decades (Davenport and Prusak, 1998). Post-project evaluation reporting has also been routine for many other project management sectors (Williams, 2007) and government auditing agencies often review projects to document lessons to be learned. A recent UK audit into Crossrail (National Audit Office, 2014) provides one example; the review of the rail projects and the LXRP in Australia provides another example (Victorian Auditor-General’s Office, 2010;2017). These reports are common; often they identify several issues but rarely address how, in detailed terms, these may be addressed. However, much of the most useful knowledge to project teams is tacit, gained through immersion within a particular context and difficult to transfer. Szulanski (1996;2003) refers to this as ‘sticky’ knowledge. Chapter 18 discusses this concept in more detail. Nevertheless, as indicated in Chapter 18, what can be documented in one media or another is being increasingly coded and recorded. Lessons to be learned are recorded but whether they are learned or not is another matter. This subsection investigates what processes, routines and means are deployed in practice. Governance and governmentality, as discussed in Chapter 19, provides some guidance. One governance aspect that is salient to this subsection is the contractual regulatory arrangements. In alliance and other IPD forms there is an incentive leg to the contract that includes key result areas (KRAs) that the PO specifies. In the case of the LXRP there were KRAs that related to innovation that leads to continuous improvement lessons being recorded and reported upon throughout the project duration, resulting in demonstrated improvements across projects within the program alliance package. Another KRA relates to the uptake of the improvement on other alliance program packages. The key performance indicators (KPIs) that measure the KRAs are somewhat of a challenge for the AMT to develop and be approved by the ALT and project owner but they focus the mind on what is important to the project owner. However, there is a process and routines for recording continuous improvement innovations and reporting the impact they have through the agreed AMT reporting cycle and they are linked into the incentivisation system (see the next section). LXRP-1 explained how the KRAs and KPIs work for reporting on a continuous improvement innovation: The Execution part of it [the KRA] is counted as a whole of life cost saving on an NPV [net present value] that’s discounted over, I think, eight years at a discount rate. The idea being, if we develop and idea and it costs us $500,000 to develop it, get a prototype up and running, and it saves us a portion of cash every year, then the way it’s assessed as adding value is just through NPV calculation on a whole of life basis. 465

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This example illustrates how a process, the KRA and AMT reporting cycle, provides a process and routine to capture and record an innovation and demonstrate its continuous improvement value.

Capacity to adapt to new ideas Knowing about an innovation, and even how it may be applied, is not difficult to operationalise into a routine or process. However, operationalising it in practice demands a full understanding of the context in which it was first used and analysis using critical thinking about how the process originally led to its result and how that may need to be adapted to the current situation (Szulanski and Jensen, 2004). This requires a specific skills set. Making the most from continuous improvement innovation requires a process of ‘unlearning’ and ‘relearning’. Without this adaptive capacity, lessons learned become lessons ignored and often the context is not deliberated upon when considering which lessons should be adopted or adapted depending on the way that the new context emerges. Walker and Lloyd-Walker (2015, p208) identify ways of thinking about building the capacity of team participants to learn from lessons through: understanding the mechanisms of reducing the ‘stickiness’ of knowledge to facilitate transforming knowledge awareness into action; understanding the importance of context when applying lessons learned from one situation to another to effectively learn, unlearn and re-learn to accommodate adaptation to changed contexts; and understanding the value proposition of those who may benefit from applying lessons learned and rewarding those who are responsible for contributing this knowledge accordingly – this would usually entail non-financial forms of acknowledgement and reward that encourage the process of effectively documenting lessons learned. There needs to be a procedural capacity to focus on continuous improvement. The KRA and KPI procedure was explained in part above. The way that these are integrated into other reward and incentive processes is also important to the level of effectiveness of the process. In trying to address this issue, the Crossrail program in London developed an innovation consortium comprising the Crossrail project-owner group, the program executive group and key first-tier subcontractors. Each member of that innovation consortium contributed funding to facilitate a committee and small research team to help identify innovation and continuous improvement and assess how to diffuse innovation across the multi-billion pound program of rail tunnel and station construction projects (MacAulay et al., 2018).

A culture of skills and learning development Effective learning and skills-development processes go beyond merely holding training sessions, workshops, or even arranging mentoring and coaching for people. These are important but insufficient by themselves. The critical process is one of institutionalising a culture in which people want to share knowledge and insights on which innovations and improvements seem to work. Interview participant LXRP-2 expressed the problem as follows: So there’s the joint coordination committee, which LXRA operate, which started (I think) on the regional railing alliance, and it’s been used on the major agencies packages. I sit on alliance managers’ sub-committee. The JCC – the joint coordination thing – is all very senior people from all other programs and projects, and then underneath there there’s subject matter expert groups, there’s an alliance manager group, there’s a sustainability group, a design group, a construction group, and all of these equivalent positions from the different projects meet. But up until now – until 466

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this last program has been awarded – we’ve all been in competition with each other to win projects, so now is the opportunity; now that all the projects are awarded we’re not competing anymore – at least not to win projects, but competing to be better than each other, which is healthy - we can now turn up and we can share ideas and we can talk to each other’. This quote first draws to our attention the joint coordinating committee (JCC) governance arrangement established and chaired by the LXRA as a process and means to entrench learning across the program. It also suggests a culture that has been developed. Firstly, now that all alliance packages are let for the program, all alliance-package participants appear to feel that they are no longer in competition on new alliance packages for the program and now are prepared and willing to more openly communicate and collaborate. Thus, a cultural driver, group norms, is being developed towards supporting discussing innovation more contextually. Additionally, a consistent thread of comment made by LXRA interviewees, as well as by many in the Walker and Lloyd-Walker (2015) study, stressed the point that staff moved around companies over the years, between disciplinary roles as well, so that frequently a team on one alliance may comprise colleagues from several other past projects and has represented organisations from client, design and contractor participants. This past collegial association seems to help build and rebuild a culture, and people have greater shared contextual knowledge and understanding with those they interact with. From our observation of more than 50 interviewed participants over our years of researching alliancing, we sense the development of an alliancing and IPD culture that supports innovation diffusion. This is partly because people have shared contextual knowledge and experience but also because they carry contextual and technical knowledge with them as they move from one project to another.

Rating the focus on learning and continuous improvement element The indicative rating for the LXRP Package 1 alliance for this element is 5. We suggest this score because: 1 Alliance participants have distinct and clear accountability for learning and continuous improvement. The background research and thinking that went into the major schedule rethink indicates very high levels. Additionally the KRAs and KPIs for innovation and its diffusion evolved for subsequent program alliances. 2 The joint coordination committee established by the XLRA anchors in innovation processes and facilitates peer-group reflective learning.

Element 13 – Incentive arrangements Incentive arrangements refer to the extent to which gain or pain is shared between participants in the project as expressed through a painsharing and gainsharing agreement. This element relates to how the incentivisation process was instigated and the way it operated to encourage sharing the rewards of innovation through mechanisms to create an incentive to excel. At one extreme, all profit margins may be quarantined and pooled and subsequently distributed, based on a negotiated and agreed pain- and gainsharing formulae based on the total project performance. At the other extreme, profit margins are based solely on individual team performance. A key element of IPD alliancing is the incentivisation model. In terms of extrinsic motivation, the governance arrangements purposely infuse gainsharing and painsharing provisions into 467

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the alliance contract. We outlined how incentivisation is linked to the alliance agreement in our general discussion on the Collaboration Framework in Chapter 2 and further elaborated upon it in Chapter 19, in terms of governance, and also in Chapter 26 with respect to explaining the alliance gainsharing and painsharing provisions in more depth. In this section we explain the identified sub-elements of the incentive arrangement process itself and managing the tensions between innovation and incentivisation. The criterion for rating the level of incentivisation on IPD-alliancing projects, according to Walker and Lloyd-Walker (2015, p164) is:

Low levels of incentivisation is manifested by little emphasis being placed upon encouraging parties to agree to place potential profit and gain/pain in a risk/reward arrangement subject to a whole-ofproject outcome performance. KRAs and KPIs are absent or rudimentary. High levels of incentivisation is manifested by much emphasis being placed upon encouraging parties to agree to place potential profit and gain/pain in a risk/reward arrangement that is subject to a whole-of-project outcome performance. KRAs and KPIs are well developed, provide stretch and challenge and are sophisticated in their understanding of the project context.

The manner in which the incentivisation process is operationalised depends on two aspects identified as sub-elements: the actual contractual and routines used to facilitate incentives; and the way that potential and actual tensions are managed to align the incentive outcome with the effort and effectiveness of innovation and sound project delivery management to achieve the outcome.

Incentive arrangements In Chapter 26, in the section on linking project output performance to an incentive scheme, we explained through Figure 26.3 that the project owner pays for all direct costs, including the project-specific overhead costs. The NOPs place their tendered profit margin and corporate overhead into an ‘at risk’ component of the target outturn cost (TOC). This provides the procedural basis and means for incentivisation. The KRAs and KPIs form the procedural means to link the incentive to the output. NOPs negotiate how the gain or pain is to be shared. The purpose of incentives is to reward high performance and encourage smart thinking, innovation and highly-effective efficiencies that lead to beating the TOC and target time as well as exceeding other KRA expectations. Gain or pain is based upon the project results as a whole and not by each NOP’s individual performance, and so this anchors performance to the one-team concept. It is also based on the project’s success in terms of achieving its KRAs and the effectiveness of the KPIs to maintain the incentive to excel. The ALT and AMT provide the governance arrangements and routines to ensure that, should there be any emerging issues that could prove detrimental to a successful outcome, then it is in the interest of all participants to work together collaboratively to overcome challenges. Low levels of incentivisation-effectiveness may be demonstrated by poorly considered and designed arrangements to encourage cross-disciplinary innovation and integrated supportive action by teams to achieve a best-for-project outcome. High levels demonstrate the opposite. For example, if NOPs feel that the TOC and delivery time is unlikely to be 468

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achieved, or if they develop innovations that improve upon the TOC and/or delivery time, the incentive arrangements should trigger them to take innovative integrated action to meet those challenges. The LXRP case study (Walker et al., 2018) provides an illustration of radical changes to a project TOC time plan that led to gainsharing based on innovation drastically reducing the time to complete excavation works for Alliance Program Package 1. Interviewees from LXRP refer to the challenges encountered when the contract award process led to a later project start than assumed during the TOC process. This could have potentially led to project-time overrun and painsharing rather than gainsharing results for the alliance. After re-examining the project plan’s assumptions, several innovative ideas emerged that led to re-planning and actioning the project based on alternative assumptions. First, the assumption was that, for Alliance Package 1, the work to lower the rail track and build a bridge so that the rail crossing removal had a bridge over the track would take place during the (Southern Hemisphere) summer months around Christmas and New Year, when many people were on holiday and the disruption would be the least to train schedules and road traffic. Also, the assumption was to undertake work during non-train-operational times. This meant being restricted to few-working-hours-per-day production. Upon reflection, and considerable modelling of proposed works, the plan was changed to undertake the works during midwinter (July) and to close down the rail network between stations and to schedule buses to transfer passengers, to deploy a 37-day closedown that removed 250,000 cubic metres of soil over ten days and poured 35,000 cubic metres of concrete in six days. This represented a radical innovation in thinking, as discussed in Chapter 15 in the Collaboration Framework, Element 8, discussion section. The whole construction process was changed, using radically different assumptions (work 35 days straight, no split access to the rail-line area, a radically different approach to the sheet-piling support system for the excavation area, and working during a winter holiday break time rather than in summer). This team-integrated approach was pursued to re-plan and action the works in a manner that reduced the project duration significantly and led to a gain-share rather than sticking to the original plan, perhaps trying to fine-tune the critical path to save a small percentage of time but remaining ‘behind the 8 ball’. Second, and this also relates to the next subsection, the integrated nature of the alliance team with road and rail operator-alliance participants made a vital difference due to the one-team integrated nature of the incentivisation mechanism. VicRoads as an alliance participant, as well as representing the OP, had a team of traffic modellers who could help determine an optimum waste-material disposal strategy. The rail operator-alliance participant was able to provide advice and input on how to optimise the planned works to minimise train-operation disruption. Collectively, the integrated one-team approach allowed all to benefit from the revised plan to complete the project, and all participants played their part in the revised plan’s success. Chapter 18 discusses some of these aspects in greater depth but it is pertinent here to point out that the incentivisation approach marshalled all participants in this example to effectively leverage the incentive mechanism of pain, as well as gain, to result in radical innovative practice.

Managing tensions between innovation and incentivisation Getting a range of participants: the OP and NOPs as well as first- and second-tier subcontractors to exchange information, knowledge, and to freely and openly air tensions and potential problems in collaborating is a challenge that often inhibits innovation being effectively deployed. As MacAulay et al. (2018) identify in their discussion of innovation processes adopted on the UK Crossrail program of works, various parties to the collaboration may suspect their partners 469

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of opportunistic motivations and each party may be unsure about the value of their intellectual property (IP) in any innovation outcome. The truth of the matter may be closer to the reality that each participant could not devise an innovation without insights, intellectual input, knowledge, experience and the capabilities of others. An innovation such as the example illustrated above on the LXRP is a case in point. The outcome required the expertise of the OP, operator, design and delivery NOPs as well as the subcontracted waste-material disposal subcontractors. Chapter 18 on the section relating to the LXRP innovation diffusion highlights the integrated nature of the innovation and IP tension issues. If, for example, in the LXRP case study, the procurement decision was to engage the cheapest or most time-effective waste-material disposal sub-contractor then there would be a reliance on that operator’s knowledge of potentially optimal truck routes to their disposal tip. However, they would not have the detailed traffic data set that VicRoads had accumulated, and so would not be likely to be in a position to (1) be clear on an optimum truck route to the disposal tip, and (2) understand how the impact of moving 250,000 cubic metres of soil and waste might have upon the residential and highway system. The outcome may have been a substantial stakeholder (public and commerce) adverse reaction to consequential traffic congestion due to truck movements. This example serves to illustrate that the IPD and alliance contract arrangements encouraged VicRoads to work with the project delivery and design NOPs as well as with the trucking subcontractors to develop a more effective waste-material disposal plan that may have otherwise been possible. Two aspects of tensions relating to gain- and painsharing have been examined. First, the IP issue, or fear, of the project participants was highlighted. This fear is somewhat misplaced. Most innovations of the kind illustrated above require input from cross-disciplinary participants and the mix is messy, impossible to disaggregate and so difficult to value individual contributions. It is likely that, without collaboration, any innovation of this nature would be stymied if each party had to agree on their IP input and value. Additionally, such innovations are embedded in unique situations and so the exact situation will never again be repeated. Perhaps a similar situation may lead to a solution adaptation but the same situation is virtually impossible to imagine as likely. Thus, collaboration and gain from a project, rather than individual input and gain from separate inputs is the most sensible result.

Rating the incentives arrangement element The indicative rating for the LXRP Package 1 alliance for this element is 4.5 for this score because: 1 Alliance participants are jointly accountable for project performance and that is linked to the gain- and painsharing arrangements but these do not extend beyond the alliance members. 2 Gain- and painsharing arrangements are clear, accepted and made routine.

Element 14 – Pragmatic learning in action This element relates to the way in which learning and innovation diffusion take place in practice through routines and processes with a competitive-advantage strategic aim to leverage collective opportunities to learn and adapt. Pragmatism implies that learning experiences are accepted to involve failures but that learning from these are important, hence the need for a noblame workplace environment. Often, unexpected opportunities arise out of failed experiments through assumptions being re-framed that lead to promising benefits in other contexts. 470

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Learning in action speaks to the team’s routines and processes that reflect practice and experience as well as how they support each other’s reflection on practice. The criterion for rating the level of incentivisation on IPD-alliancing projects, according to Walker and Lloyd-Walker (2015, p164) is: Low pragmatic learning in action is manifested by actors within a network delivering a project failing to translate learning opportunities into actual benefits and competitive action. Failed experiments are punished. High pragmatic learning in action is manifested by actors within a network delivering a project capitalising on learning opportunities to achieve competitive action. This can also be assessed by the weight that these actors place on the value of experimentation as a way to see issues and solutions in a new light. Failed experiments are valued for their intellectual stimulation in discovering, for example, a better understanding of cause-effect loops.

Two sub-elements were identified, action learning and coaching and mentoring.

Action learning Participants undertake individual and group-based action-learning activities. Experimenting to undertake complicated cross-disciplinary modelling and simulation exercises provides one such activity. These activities enable gaining knowledge from action by trial and error. The way that knowledge is captured and made re-usable from action-learning initiatives helps identify how well this has been systematically institutionalised. Typical examples of high levels of IPD modelling as action learning is the way that BIM or other modelling systems are used to test the practicality of ideas. USA IPD projects have been reported to use visualisation tools such as virtual-reality goggles so that the delivery participants can see the design superimposed upon a building frame, for example, when renovating or fitting out a space. Fischer et al. (2017, p269–276) discuss the Penn State Architectural Engineering Centre computer-assisted virtual environment (CAVE) and illustrate how 3-D visualisation is advancing towards full immersion technology that allows people to not only experience a ‘final product’ before it has been delivered but, critically, test its practicality from both a buildability as well as from operational and maintenance perspectives. Interviewee LXRP-1 on the LXRP told us that they were using sensors and drone cameras to map out how the rail-line improvements would appear to those laying track and also for train drivers, so that the design could be fine-tuned to meet concerns raised by operational stakeholders as well as help people learn about potential challenges in the proposed design and assumed construction approach. On the same project, LXRP-5 told us about the activities of the embedded VicRoads alliance team in modelling traffic so that the planned excavation of 250,000 cubic metres of materials could be undertaken and the waste materials transported effectively over a ten-day period. This cross-discipline interaction between experts in traffic data analysis, with deep knowledge about permits that might be needed for various options and how the anticipated truck volume may impact the city’s traffic, is linked to knowledge of working with the design and main contractor and materialmovement subcontractors. This provides a clear example of action learning through simulated action. Other action-learning exercises conducted on the LXRA included the change from conventional sheet-piling approaches to use of vibration Giken sheet piles rather than the 471

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originally proposed traditional driven sheet piles. This change in practice was first proposed to enable sheet piling to take place from the residential property boundaries to the railline boundary while trains were operating. The original plan was to use a rail-mounted sheet-pile driving rig. The Giken approach required continuous fine-tuning operations on a physical real-time action-learning basis. This innovative practice is now diffused as an option for other alliance projects within and across the program.

Coaching and mentoring Coaching and mentoring informs learning through experience and insights being shared in a formalised manner through one-on-one interactions between project participants and highly experienced expert coaches. Those being coached or mentored are encouraged and helped to contextualise their learning, to refine it through dialogue and to add value through that knowledge by sharing stories. In this way they explore meaning and make sense out of their learning. Coaching may be seen as concerned mainly with enhanced individual performance, such as in a sports setting, however, it is also used in a commercial setting where people can learn from an expert in an area who provides detailed independent feedback (Hackman and Wageman, 2005). However, coaching may also be seen from a team perspective, particularly when activities are interconnected between people and systems and where the combined team output is being optimised rather than any one individual being able to see how to improve in isolation. Team coaching has been reported in the USA as an effective part of the IPD approach (Fischer et al., 2017, p199–200). In an IPD or alliance situation not only are individuals, such as an alliance manager, coached, but the team is coached by external expert facilitators. We have spoken to many alliance participants who have experienced this kind of coaching from an individual and team perspective as well as being a coach and mentor. As an alliance progresses we have seen evidence, as researchers, of team members volunteering their advice, reflections and insights to coach colleagues. Mentoring is often more traditionally associated with an older, wiser person guiding and enlightening a younger or less experienced person (Swap et al., 2001). This activity may also be seen within an IPD and alliancing context where career development is associated with people shifting roles and, through doing so, developing a broad view of the impact of their actions and experiences that they share with colleagues. In our 50 or more interviews we saw many examples where an interviewee tells us that s/he has worked in the role of technical expert team member, alliance manager and alliance-leadership team member across several or many alliances. Many of those we interviewed felt it natural to shift roles without any sense of promotion or demotion. This makes their potential for mentoring, as well as their reflective self-examination, very high within a collaborative and noblame cultural setting. In this way, a potential mentor may be sourced from a wide range of settings. Mentoring can range from a young person helping less technology ‘savvy’ elders to use and take advantage of technology advances (Anantatmula and Shrivastav, 2012), to the Sugarloaf projectalliance manager we interviewed (Lloyd-Walker and Walker, 2017) who had been a chief executive officer of a very large global enterprise and an alliance-leadership team participant on several alliances. Mentors help others to understand contexts, technical issues, people’s behaviour, and actions and their motivations. Frequently, mentoring becomes a process triggered by a workplace situation providing a certain feeling or ambience, as described by an alliance manager interviewed several years ago by us (Walker and Lloyd-Walker, 2014). Based on evidence from interviewee quotes of alliance managers we concluded that the ambience of an alliance: as being a work space where complexity and at times chaos, but always high levels of uncertainty, prevails . . . teams seek to cope with uncertainty and indeed view it as an 472

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opportunity to trigger refining and improving the project design through innovation and responding to a best-for-project mentality that often encompasses CSR, sustainability and 3BL issues. They do so by developing an open, collegial and appreciative work environment that allows alliance teams to jointly accept responsibility for project outcomes and make decisions based on low information and power asymmetries. This allows ‘undiscussables’ to be raised, discussed and considered so that uncertainty and risk management is more positively pursued. (2014, p13–14) A significant mentoring and coaching mechanism deployed on the LXRP as described earlier in this chapter is the joint coordination committee at the pan-alliance level but coaching and mentoring activities take place naturally at the small-group level when integrated project parties with cross-disciplinary backgrounds and wide role experiences on projects interact and share insights.

Rating the pragmatic learning in action element The indicative rating for the LXRP Package 1 alliance for this element is 5 because: 1 2

Alliance participants are continually experimenting and modelling throughout the design and delivery project phases as evidenced by the example of the 250,000 cubic metres dig event. Supportive coaching and learning from the LXRP-wide to individual alliance level.

Element 15 – Transparency and open-book access These processes refer to participants agreeing to be audited and fully open to scrutiny. The oneteam mentality helps to legitimise the open-book mindset and it also helps to underpin trust and to authenticate TOC-incurred costs. Actors within the project network should have confidence that they can trust authorised inspection of their books and that those undertaking any audits, due diligence and inspections are capable and effective enough to understand the implication of what they inspect. Total transparency and accountability is necessary for an alliance TOC where the project owner is funding all direct, administrative and management costs. The criterion for rating the transparency and open-book access on IPD-alliancing projects, according to Walker and Lloyd-Walker (2015, p164–165) is: Two sub-elements were identified: transparency and accountability.

Low transparency and open-book approaches to project delivery intensely protects the security of organisations and individuals to gain access to information about cost structures or the basis of project plans. It is often exemplified by the code words ‘commercial in confidence’. It seeks to hide both good and bad news but this often results in mistrust that undermines collaboration and opportunities for constructive change. High transparency and open-book approaches to project delivery presents opportunities for generating trust by clients and other parties that may access that information. It is a confronting notion that many organisations cannot face. It requires the project owner’s authorised probity auditors to have free access to their financial books. Thus, confidence in ethical and legal business conduct is necessary to accept this challenge.

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Transparency This represents the extent to which project participants agree to be fully open about their cost structures, decision-making processes and project delivery processes. There also needs to be a system-wide appreciation of varying accounting practices by various participants because often costs are allocated to cost centres quite differently. For example the delivery of resources to a project such as concrete, steel or rail sleepers can be easily traced. However, accounting for people’s time for design work for example, or for lodging permits to a particular authority or engaging with stakeholders through sponsoring a local sports event can be more difficult to properly cost code and justify. The projects that we report upon in alliancing studies are almost all public-sector infrastructure projects. One aspect of transparency is the way that value for money (VfM) being achieved is articulated and demonstrated. The VfM process is linked to the business-case process because VfM will be judged on how well the value delivered matches that stated in the business case and the business case and project proposals go through a stage-gate process of approval from inception to commitment to delivery to project procurement and delivery. Alliance participants are required to submit a VfM report within six months of completion of the alliance project/ program (Department of Infrastructure and Transport, 2011a, p31) as directed by, for example, as follows: The VfM Report should be finalised within six months of the alliance achieving practical completion. However, the collection of data and information for the VfM Report should commence well before then. Continuous monitoring and progressive reporting should occur along the way to assess whether the MCOS are being achieved and the alliance’s performance trends. . . [MCOS = minimum conditions of satisfaction]. Thus, the purpose of having effective transparency processes in place is justified on governance grounds as well on grounds of furthering cross-team trust. High levels of transparency are meant to ensure that participants do not take short cuts on reporting, for example, or engage in opportunistic behaviour. Parties gaining access to data and alliance correspondence and communication materials include the probity bodies who are responsible for ensuring that all stages of the project/program meet the required legislative probity governance standards; the government auditor-general may undertake investigations into a project, for example for the LXRP an interim auditor-general’s report was undertaken and published (Victorian Auditor-General’s Office, 2017); and the ombudsman may also undertake an investigation into the conduct of a public-sector alliance. An aspect of transparency that had not occurred to us before interviewing high-level alliance leaders on the LXRP Alliance package 1 study (Walker et al., 2018) was that for this alliance, according to interviewee LXRP-5, the train-operator participant was responsible for bus replacement of train-service costs to transport passengers and that this was part of the TOC. If the project had been undertaken using a design and construct (D&C) approach, for example, then this bus transport costs would be hidden from the general public or at least not easily linked to the project works. Thus, the TOC may appear to represent a higher cost than may be the case for a D&C approach because of the different accounting conventions of the train operator and a project delivery entity undertaking a D&C project. This example underscores the need for transparency so that investigations and audits may have the full picture rather than part of it.

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Accountability This represents the extent to which project participants agree to be fully open to scrutiny, allowing authorised project-owner representatives to audit and inspect books, processes and decision-making rationale. The processes deployed in an alliance or other similar IPD form at a high level ensure that transparency occurs and is not stymied in any way, which may be seen for a low accountability level. This means that there must be systems in place, e.g. the joint governance arrangements, common communications approaches and other platform foundational facilities to support the accountability of alliance participants. Beside the systems and processes, as we have argued from an institutional-theory perspective (Scott, 2014) throughout this book, there needs to be group and individual norms that support transparency and the principles of being accountable on these alliances. People engaged in alliances need to understand why they are, and must be, accountable. Further, they also need the cultural-cognitive abilities to make sense of the regulative procedural arrangements based on their norms and to thus accept the requisite level of accountability and support its application. Institutional understanding of the basis of accountability to be transparent, trustworthy and trusted is required of participants to join and remain in an alliance. The term ‘institutional understanding’ may not be used or recognised by alliance participants but ‘doing the right thing’ is clearly understood, even though this term is vague.

Rating the transparency and accountability element The indicative rating for the LXRP Package 1 alliance for this element is 5 because: 1

Alliance participants are in unison with their understanding of why and how transparency should be manifested. They expect open-book access and respect the right of the project or program owner to have this access. While they may refer to ‘probity police’ it is more of a short-term way of understanding that their interactions are, and should be, monitored because of the TOC process and the basis of the alliance incentive arrangements. 2 Similarly all parties interviewed in the LXRP Alliance package 1 study (Walker et al., 2018) were clear and accepted expectations about their level of accountability.

Element 16 – Mutual dependency and accountability The expression of a single united team as characterising IPD alliancing has been discussed at length in this book in numerous chapters. This element relates to the processes, means and ways in which behaviours consistent with a united single-team mindset are operationalised. It refers to collaboration in projects requiring participants to not only recognise their interdependency but to also honestly respond to a ‘sink-or-swim-together’ workplace culture when communicating. Platform facilities and, in particular, governance systems may both support and enhance individual team responsibility and accountability or alternatively they may inhibit approaches to cross-team collaboration. The criterion for rating mutual dependency, according to Walker and Lloyd-Walker (2015, p165) is: Three sub-elements were identified: characteristics of mutual dependency; enhancing enablers of mutual dependence; and countering inhibitors of mutual dependency.

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Low mutual dependence and accountability refers to an inability or lack of desire to acknowledge the potential value of team interdependence and accountability. Participants follow individualistic paths, possibly at the expense of others, and/or do not support a sink-or-skim-together workplace culture or they actively undermine that culture. High mutual dependence and accountability refers to an ability and keen desire to acknowledge team inter-dependence and accountability in ways that builds inter-team trust and commitment through actively enhancing a sink-or-swim-together workplace culture and to actively counter any actions that may inhibit this culture.

Characteristics of mutual dependency Collaboration in projects requires participants to recognise their interdependency and also genuinely engage with a sink-or-swim-together workplace culture when communicating and taking action. This sub-element relates to the nature and degree of their sense of mutual dependence and lies at the heart of integration and collaboration. The IPD-alliance form purposefully bonds team members from the various alliance-participant organisations in ways that help them consider their identity to be aligned to the alliance project/program. The alliance team are often co-located, they use the alliance-wide established email address and their alliance identity is reinforced through being ‘badged’ with the alliance name or symbols being used on clothing, letterheads and other communication devices. The aim is to create an alliance culture and ‘family’ to which alliance participants feel they belong. Many alliance workers have been hired by their home-base organisations to work on the alliance but might never have been working at the ‘home office’. Many alliances last for many years. The LXRP, for example, is a seven-to-eight-year program of works (Victorian AuditorGeneral’s Office, 2017, p23) and, as such, many people engaged on the 11 alliance program packages will pass from one alliance to another over that time and may also change their homebase organisation. Interviewee LXRP-2, for example, was an alliance manager on one package and then moved as alliance manager to a different alliance package, notionally employed by a different home-base organisation. He told us that this was common on alliance projects and that many of his former colleagues within his first organisation on the LXRP had moved onto other alliance packages within the overall LXRP, sometimes changing roles from being on the design team, the delivery contracting team, the operator teams or representing the OP. This situation of flux seems not to destabilise their sense of identity because their identity remains rooted with the alliance culture. Colleagues become familiar collaborating workmates and there is a professional culture of setting objectives that are termed ‘best-for-project’. The ambience of an alliance, as mentioned earlier in this chapter, is highly centred on the group identity (Walker and Lloyd-Walker, 2014). We have been told by interviewees from a broad range of alliances that after a short time people do not have any idea of the identity of their colleagues’ home-based organisation: they wear the same ‘badged’ clothing, share the same email domain address, are usually co-located together and maintain a sense of being in a single team. As LXRP-3 observed in terms of team identity and unified best-for-project goals: So if you went out to the project office, you wouldn’t know which jersey people really wear, but they are embedded in the alliance, and they’re delivering the best they can

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for the alliance, and they’re there to be challenged, and they’re there to challenge their home-base organisation as well. So obviously, there’s an affiliation back to a parent company ultimately, but the objective of the alliance is to get the best outcome, either for the State or for Metro or for the constructor, but not at the expense of the other. The impression given by all alliance practitioners we have interviewed is that a best-for-project unified vision is central to the decision-making process on alliancing projects. Decisions are made collectively and unanimously at AM and AL meetings, as discussed in the Element 11 section. This can and usually does result in high levels of a sense of project participant interdependence and accountability. The phrase we often heard from interviewees that typified interdependence was that they sensed that they would either swim or sink together.

Enhancing enablers of mutual dependence There are a number of processes, means and ways that participants enhanced mutual dependence. Many have been described earlier in this chapter and in Chapter 15 and Chapter 9 when explaining the Collaboration Framework. To recap, mutual dependence and mutual accountability are enhanced through both contractually formal and culturally non-formal governance means. Chen et al. (2018) surveyed 320 respondents, 235 of whom had worked on construction alliances, and their findings provide strong evidence that contractual and non-contractual measures supported and enhanced collaboration, mutual dependence and accountability. They highlight the same Collaboration Framework element characteristics as factors in their governance model. Basing the gain- and painsharing arrangements on the overall project performance against identified KRAs provides strong motivation to collaborate and work as co-dependent actors who may belong to different disciplines and home organisations but nevertheless understand the value and necessity to respect each other’s expertise and experience when making decisions and taking action. The same holistic measurement of KRAs through KPIs that measure project output and outcome accountability, rather than individual performance, also enhanced mutual dependence. Non-contractual enablers of mutual dependence include the creation of a unified team culture and ambience, behavioural norms of mutual respect and perspective-taking capabilities as discussed in Chapter 15, and a no-blame culture that engendered trust between participants so that they felt safe being mutually dependent. The LXRP had one interesting innovative procedural approach to meeting KRAs that related to the quality of urban facilities and environment. The LXRA had established what interviewee LXRP-3 described as the Urban Design Advisory Panel who: can be landscape architects or architects that includes council representatives for where the level crossing is in a particular municipality, and then that council representative can bring in. . . . it’s been something that we’re quite passionate about, and part of our – well, we call it the ‘LXRA blueprint’ – but one of our objectives is to provide great places. So ultimately that’s an objective to do more than what a traditional level crossing might deliver. So create that legacy for the community. The mindset demonstrated by this revelation is that the concept of mutual dependence is extended to the local community served by the rail changes as well as both rail and road-user stakeholders. There is a genuine sense of accountability of the alliance united team to not just deliver something functionally acceptable or even designed to be aesthetically pleasing but to

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create a positive holistic legacy. This requires the considered application of input from the Urban Design Advisory Panel to be interpreted and moulded and shaped to a workable design and delivery of the facilities that unites the expertise of the alliance organisations: the OP as well as design, delivery and operator NOPs.

Countering inhibitors of mutual dependence An important means to counter inhibitions towards the separate alliance-participant organisational teams to form a single unified team is the forging of a unified identity as described above. The ‘badging’ of all alliance participants through having the same email domain and same logo on their safety helmets and clothing provides a strong sense of being identified with the same clan. Writers on culture (see Chapter 10) stress the bond that forms between individuals into clans or ‘families’ forming a strong ‘in-group’ that creates shared stories, myths, experiences and converging versions of reality. This has its strengths in that people within the in-group feel mutual dependence and accountability and this also often leads to lower anxiety due to mutual support mechanisms (Hogg and Terry, 2000). A weakness with strong in-group identity is that mutual dependence may express itself as groupthink, rejection of ‘out-groups’ and blaming outsiders when things do not go to plan (Pettigrew, 1997; Ahlstrom and Wang, 2009). Notwithstanding the potential weakness of groupthink, there are measures that can be taken to reduce this tendency that are evident in the way that many IPD-alliances are structured and led. First, structurally, as already previously mentioned, the KRA definition may provide a strong countering inhibitor of groupthink or dismissal of the views of perceived out-groups. KRAs for infrastructure alliance projects almost always include social-good outcomes and they are highly focussed to meet the expectations of external stakeholder groups. Maintaining external stakeholder-focussed public-good KRAs legitimises external accountability to some extent and provides a counter to self-interest and a focus on internal cliques. Second, we see actions that address behavioural, attitudinal and social means and processes to counter any tendency towards inhibiting mutual dependence and accountability. The inclusion of the Urban Design Advisory Panel, discussed above, also suggests a mindset and culture relating to power and communication structures. To effectively operate internally and to engage effectively with stakeholders requires levelling power and information/knowledge asymmetries. Lowering power and information imbalances throughout the system helps to counter the emergence of groupthink and creation of cliques, and increases the likelihood of trust being built and maintained (see Chapter 13 on trust and Chapter 23 on ethics). In summary, we see evidence from the LXRP study, for example, that the IPD-alliance form, structure and processes and means lead to enhanced mutual dependence of the alliance team and its sense of accountability. This accountability also encompasses a wide range of stakeholders.

Rating the mutual dependence and accountability element The indicative rating for the LXRP Package 1 alliance for this element is 5 because: 1

2

The sense of ‘we all sink or swim together’ is seen to be very high. The OP and design, delivery and operator NOPs felt that they are parts of a strong united team with a common vision and group-wide accountability. The structure and culture of the alliance specifically encouraged the NOPs and OP to sense that they were a single united team and that this team’s role was to be accountable for not just delivering a functional rail crossing removal but to value-add through developing an urban and social legacy. 478

Processes and means elements 1 Motivation and context 16 Mutual dependence and accountability 15 Transparency & openbook 14 Pragmatic learning-inaction

13 Incentivisation

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

2 Joint governance structure 3 Integrated risk mitigation 4 Joint communication strategy

5 Substantial co-location

12 Focus on learning & continuous improvement

6 Authentic leadership

11 Consensus decision making

7 Trust-control balance

10 No blame culture

8 Commitment to innovate

9 Common best-forproject mindset/culture

Figure 21.3  Processes, routines and means factors radar diagram

Conclusion The aim of this chapter was to explain in more detail the elements that comprise the processes, routines and means that drive enacted practice for a successful project delivery outcome. Six elements were discussed in depth, together with their sub-elements. Examples of practice were given supported by quotes from interviews undertaken with five of the most senior executives in the LXRP representing both OP and NOP perspectives. We also linked practice to theory in providing our discussion and commentary. We present Figure 15.3 below as an illustration of the complete Collaboration Framework rating, based on assessment of data gathered as quotes from senior executives for the LXRP. This provides an example, as explained in Chapter 1 of this book, of how these elements could be rated for a benchmarking or a heath-check exercise. The radar diagram for these elements graphically illustrates this Collaborative Framework component.

References Ahlstrom, D. and Wang, L. C. (2009). “Groupthink and France’s defeat in the 1940 campaign.” Journal of Management History. 15 (2): 159–177. Anantatmula, V. S. and Shrivastav, B. (2012). “Evolution of project teams for Generation Y workforce.” The International Journal of Managing Projects in Business. 5 (1): 9–26. Chen, L., Manley, K., Lewis, J., Helfer, F. and Widen, K. (2018). “Procurement and governance choices for collaborative infrastructure projects.” Journal of Construction Engineering and Management. 144 (8): 04018071. Chhokar, J. S., Brodbeck, F. C. and House, R. J. (2008). Culture and leadership across the World: The GLOBE Book of In-Depth Studies of 25 Societies, Mahwah, NJ, Lawrence Erlbaum Associates. Cicmil, S. (2003). From Instrumental Rationality to Practical Wisdom. PhD. Leicester, Simon de Montfort University.

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Derek Walker and Beverley Lloyd-Walker Cicmil, S., Williams, T., Thomas, J. and Hodgson, D. (2006). “Rethinking project management: researching the actuality of projects.” International Journal of Project Management. 24 (8): 675–686. Davenport, T. H. and Prusak, L. (1998). Working Knowledge: How Organizations Manage What They Know, Boston, MA, Harvard Business School Press. Department of Infrastructure and Transport (2011a). National Alliance Contracting Guidelines Guidance Note No. 4: Reporting Value-for-Money Outcomes. Department of Infrastructure and Transport A. C. G. Canberra, Commonwealth of Australia: 53. Department of Infrastructure and Transport (2011b). National Alliance Contracting Guidelines Guide to Alliance Contracting. Department of Infrastructure and Transport A. C. G. Canberra, Commonwealth of Australia: 168. Dreyfus, S. E. (2004). “The five-stage model of adult skill acquisition.” Bulletin of Science Technology and Society. 24 (3): 177–181. Fischer, M., Khanzode, A., Reed, D. and Ashcraft, H. W. (2017). Integrating Project Delivery Hoboken, NJ, John Wiley & Sons. Flyvbjerg, B. (2009). “Survival of the unfittest: why the worst infrastructure gets built and what we can do about it.” Oxford Review of Economic Policy. 25 (3): 344–367. Flyvbjerg, B., Rothengatter, W. and Bruzelius, N. (2003). Megaprojects and Risk: An Anatomy of Ambition, New York, Cambridge University Press. Frederiksen, L. and Davies, A. (2008). “Vanguards and ventures: projects as vehicles for corporate entrepreneurship.” International Journal of Project Management. 26 (5): 487–496. Gwynne, P. (1997). “Skunk works, 1990s-style.” Research Technology Management. 40 (4): 18–23. Hackman, J. R. and Wageman, R. (2005). “A theory of team coaching.” Academy of Management Review. 30 (2): 269–287. Hofstede, G. (1983). “Cultural dimensions for project management.” International Journal of Project Management. 1 (1): 41–48. Hofstede, G. (1991). Culture and Organizations: Software of the Mind, New York, McGraw-Hill. Hofstede, G. (2006). “What did GLOBE really measure? Researchers’ minds versus respondents’ minds.” Journal of International Business Studies. 37 (6): 882–896. Hogg, M. A. and Terry, D. J. (2000). “Social identity and self-categorization processes in organizational contexts.” The Academy of Management Review. 25 (1): 121–140. House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W. and Gupta, V. (2004). Culture, Leadership, and Organizations – The GLOBE Study of 62 Societies, Thousand Oaks, CA, SAGE Publications Inc. Javidan, M., House, R. J., Dorfman, P. W., Hanges, P. J. and Luque, M. S. D. (2006). “Conceptualizing and measuring cultures and their consequences: a comparative review of GLOBE’s and Hofstede’s approaches.” Journal of International Business Studies. 37 (6): 897–914. Klein, G. (1997). “Developing expertise in decision making.” Thinking & Reasoning. 3 (4): 337–352. Koskinen, K. U., Pihlanto, P. and Vanharanta, H. (2003). “Tacit knowledge acquisition and sharing in a project work context.” International Journal of Project Management. 21 (4): 281–290. Kurtz, C. F. and Snowden, D. J. (2003). “The new dynamics of strategy: sense-making in a complex and complicated world.” IBM Systems Journal. 42 (3): 462–483. Langley, A., Mintzberg, H., Pitcher, P., Posada, E. and Saint-Macary, J. (1995). “Opening up decision making: the view from the black stool.” Organization Science. 6 (3): 260–279. Leonard, D. and Sensiper, S. (1998). “The role of tacit knowledge in group innovation.” California Management Review. 40 (3): 112–132. Lloyd-Walker, B. M. and Walker, D. H. T. (2017). The Sugar Loaf Water Alliance – An Ethical Governance Perspective. Governance & Governmentality for Projects – Enablers, Practices and Consequences. Muller R. Abingdon, Oxon, Routledge: 197–220. MacAulay, S., Davies, A. and Dodgson, M. (2018). Building Infrastructure: Navigating Public and Private Interests in the Pursuit of Innovation. 2018 IRNOP – A Skilled Hand and a Cultivated Mind. Walker D. Melbourne, RMIT: 26pp. National Audit Office (2014). Crossrail, Audit. London, National Audit Office, UK: 43pp. Pettigrew, T. F. (1997). “Generalized intergroup contact effects on prejudice.” Personality and Social Psychology Bulletin. 23 (2): p173(13). Polanyi, M. (1997). Tacit Knowledge. Knowledge in Organizations – Resources for the Knowledge-Based Economy. Prusak L. Oxford, Butterworth-Heinemann: 135–146.

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Processes and means elements Rowlinson, S., Walker, D. H. T. and Cheung, F. Y. K. (2008). Culture and its Impact Upon Project Procurement. Procurement Systems – A Cross-Industry Project Management Perspective. Walker D. H. T. and S. Rowlinson. Abingdon, Oxon, Taylor & Francis: 277–310. Schein, E. H. (1985). Organisational Culture and Leadership, San Francisco, CA, Jossey Bass. Schein, E. H. (1996). “Three cultures of management: the key to organizational learning.” Sloan Management Review. 38 (1): 9–20. Scott, W. R. (2014). Institutions and Organizations, Thousand Oaks, CA, London, SAGE Publications Inc. Simon, H. A. (1957). Administrative Behavior: A Study of Decision-Making Processes in Administrative Organization, New York, Macmillan. Simon, H. A. (1991). “Bounded rationality and organizational learning.” Organization Science. 2 (1): 125–134. Simon, H. A. (1997). Administrative Behavior: A Study of Decision-Making Processes in Administrative Organizations, Fourth Edition, New York, Free Press. Snowden, D. J. and Boone, M. E. (2007). “A leader’s framework for decision making.” Harvard Business Review. 85 (11): 69–76. Swap, W., Leonard, D., Shields, M. and Abrams, L. (2001). “Using mentoring and storytelling to transfer knowledge in the workplace.” Journal of Management Information Systems. 18 (1): 95–114. Szulanski, G. (1996). “Exploring internal stickiness: impediments to the transfer of best practice within the firm.” Strategic Management Journal. 17 (Winter special Issue): 27–43. Szulanski, G. (2003). Sticky Knowledge Barriers to Knowing in the Firm, Thousand Oaks, CA., SAGE Publications Inc. Szulanski, G. and Jensen, R. J. (2004). “Overcoming stickiness: an empirical investigation of the role of the template in the replication of organizational routines.” Managerial and Decision Economics. 25 (6–7): 347–363. Victorian Auditor-General’s Office (2010). Management of Major Rail Projects, Melbourne: 46pp. Victorian Auditor-General’s Office (2017). Managing the Level Crossing Removal Program, Melbourne, ISBN 978 1 925226 58 4 101. Walker, D. H. T. and Lloyd-Walker, B. M. (2014). “The ambience of a project alliance in Australia.” Engineering Project Organization Journal. 4 (1): 2–16. Walker, D. H. T. and Lloyd-Walker, B. M. (2015). Collaborative Project Procurement Arrangements, Newtown Square, PA, Project Management Institute. Walker, D. H. T., Matinheikki , J. and Maqsood, T. (2018). Level Crossing Removal Authority Package 1 Case Study, Melbourne, Australia, BIM+ Research Group, School of Property, Construction and Project Management, RMIT University: 77pp. Williams, T. (2007). Post-Project Reviews to Gain Effective Lessons Learned, Newtown Square, PA Project Management Institute. Williams, T. and Samset, K. (2010). “Issues in front-end decision making on projects.” Project Management Journal. 41 (2): 38–49. Williams, T. M., Samset, K. and Sunnevåg, K. J., Eds. (2009). Making Essential Choices with Scant Information – Front-End Decision-Making in Major Projects. Series: Making Essential Choices with Scant Information – Front-end Decision-Making in Major Projects. Basingstoke, UK, Palgrave Macmillan.

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SECTION 5

Section 5 provides new and relevant perspectives on integrated project delivery (IPD) that have received scant attention to date. Projects are not an isolated island (Engwall, 2003) but are linked within a specific context and overall program of works as means to a strategic end. A rationale must be present at the project level so that value adding can make sense, i.e. adding value for whom and to what purpose? We argue in these chapters that IPD should not only be about integrating teams and people but also about integrating approaches to business incentive and performance rewards. ••

••

Chapter 22 – Integrating capital project delivery: an activity theory-based approach: Synott, Rowlinson and Walker in Chapter 22 take an activity theory-based approach for understanding the way that the project owner, designer and delivery teams interact on traditional forms of project delivery and numerous past attempts to integrate their actions to achieve a united and unified one-team response. Applying this theory, that helps explain the dynamics of interaction in communities, helps us understand how IPD may offer a solution to the many disruptions and barriers that these parties (as well as their interaction with the facility operators) have faced. It also suggests how an IPD approach may take advantage of existing and emerging digital technologies to collaborate more closely through having a deeper understanding of the system they are operating in and the social significance of people working within that system and how their history and organisational culture may have impacted them. Taking a systems view can reveal problems that are masked by the way that different discipline team members view problems and possible solutions. A Hong Kong case study example is used to illustrate how activity theory was used to resolve just one of many technical issues and illustrates how an effective IPD approach can be beneficial in achieving collaboration to solve many project design and delivery problems. Chapter 23 – IPD from an ethics perspective: Chapter 23, by Lloyd-Walker and Walker continues the focus on a value perspective based on an ethical consideration of ‘what is value and value to whom?’ Discussion of and explanation of the concept of ethics and corporate social responsibility (CSR) is logically linked to IPD because a core aim of IPD is for a ‘one-team’ approach to best-for-project (or network for programs of work/projects) outcome and as Klakegg and colleagues (Klakegg, 2010; Klakegg, Williams and Shiferaw, 2016) have argued from experience and research, public sector projects owners have a strong public-good

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••

••

••

••

••

orientation, with different ideal outcomes to the private sector. This chapter also discusses the concept of creating shared value that is applied in projects such as infrastructure projects using the Sugarloaf North–South water pipeline as a case study example to explore ethical issues and how value was framed to include ethical and sustainability outcomes. Chapter 24 – Design and construction for operability: Atkin and Rowlinson in Chapter 24 address a poorly integrated aspect of IPD at present: the consideration of integrated facilities management (FM) into the project design and execution. While the whole of life cost and benefit analysis is thought to be considered in both IPD and public–private partnership (PPP) delivery forms, the advances in technology discussed in Chapter 16 are rarely considered. This is despite massive long-term benefits that may arise in the short to medium term if these new technologies could be incorporated into the project design. Chapter 25 – IPD and safety management: a productive combination: In Chapter 25 Rowlinson discusses occupational health, safety and well-being (OHSW). This is an important chapter that links to, informs and is informed by numerous other chapters in this book. It makes the case for IPD and the newly emerging digital and advanced manufacturing technologies being a catalyst of change together with design thinking being applied to work process and tasks, to positively change the nature of OHSW. It draws upon research and experiences from major construction projects in the Hong Kong context but also draws upon global trend reflections. Chapter 26 – IPD performance and incentive management: Walker and Rowlinson begin Chapter 26 with a general discussion of success and what success may look like to different project delivery stakeholders to help clarify differences in then value for money (VfM) and best value concepts that heavily influence how performance is perceived. Chapter 26 also discusses how project performance is operationalised within an alliancing context through key result areas (KRAs) and how key performance indicators (KPIs) are developed and used. The chapter also discusses how participants may be rewarded with a strong focus on project incentive approaches to provide pain- and gain-sharing mechanisms to incentivise participants to an IPD project. There has been some recent literature emerging on this topic that provides fresh new insights (Lahdenperä, 2016b;2016a). Chapter 27 – IPD and TOC development: Walker and McCann in Chapter 27 provide an explanation of how an IPD performance model is developed and how the target outturn cost (TOC) and target delivery time is developed and administered. This chapter explores the concept of cost and budget and how value may be identified for delivery through an IPD TOC process. There has been much confusion in the literature and in the reporting press about the basis process of project cost and budget estimating with particular uncertainty and ambiguity of what a project cost figure actually represents. This chapter discusses this area in preparation to explain the process of target outturn cost (TOC) development within the context of IPD alliancing. The TOC process is explained in detail based on experiences of one of the co-authors who had been the bid manager on many Australian alliances over a period of several decades since their early introduction. Chapter 28 – An IPD approach to disaster recovery: In Chapter 28, Mulowayi and Walker focus on disaster recovery from an IPD perspective. The chapter traces the disaster recovery process from an IPD point of view and illustrates how this is being achieved in a post-earthquake context in New Zealand as well as post-flooding disaster recovery in Queensland Australia. This chapter reminds us that IPD may be effectively applied in non-commercial contexts and that close integration of governments, nongovernment organisations and commercial entities is necessary where disruption to the ‘normal’ infrastructure has been experienced.

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22 INTEGRATING CAPITAL PROJECT DELIVERY An activity theory-based approach Richard James Synott, Steve Rowlinson and Derek H. T. Walker Introduction This chapter addresses the complexity in the design of project teams and organisations that undertake integrated project delivery (IPD). We take activity theory as the basic starting point for this study and develop activity-system models that move away from the simplistic view of design of project organisations into a more complex and mature view of the interactions between the various parts of the system. We commence by describing the basics of activity theory and define key concepts, such as Community, tools, rules, subjects and division of labour and, by way of an example case study, illustrate how these can be modelled in a complex and meaningful manner that allows for the use of the model in the design of project organisations. This chapter is linked to others in this book and fits within this section because it examines the processes and means that are used by teams to deliver projects. Activity theory has a long pedigree in the social sciences and formed the basis of much political thinking and debate. Roth notes that activity theory, also referred to as cultural-historical activity theory, was developed and explored in connection with theorists such as Karl Marx in thinking about how society operates and how people make sense of their work and the purposes they serve (Roth, 2014). Taking this perspective on ‘activity’ we see links to Chapter 11, for example, with Figure 11.2 that illustrates how tasks/jobs (and we could include activity) shape and are shaped by meaningful and purposeful intent. Thus, ‘activity’ may be seen in this purposeful light as ‘strategy’ in that in this broader context and meaning what is done as an activity could and should be designed to make sense and to be meaningful. Three common questions associated with analyses that may use activity theory are: why are we doing this? (the activity of motivation); what are we doing? (the activity being undertaken); and how is this activity being done? (the conditions under which the activity is being undertaken). This links it to Chapter 4 on value, to Chapter 8 on design thinking and also to Chapter 10 on culture. We could also argue that it links this chapter to Chapter 27, on ethics and shared value, and even to Chapter 26, which discusses project delivery performance.

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Background It is well understood that the way our industry procures and delivers projects is flawed. In 1994, Sir Michael Latham’s report ‘Constructing the Team’ (Latham, 1994) identified the fragmented and adversarial nature of the construction industry and presented teamwork and fairness as the keys to helping clients achieve the high-quality projects they require. In 1998, Sir John Egan released his report ‘Rethinking Construction’ (Egan, 1998). Egan pressed the importance of fostering a culture of trust and respect, full staff training and an environment in which staff can give their best. He emphasised performance measurement and the sharing of learning and passing these benefits on to everyone involved in a project. Egan envisaged not just doing things better, but doing them entirely differently. The core objective of these pivotal reports was the need to integrate our project delivery at all levels. There are three main factors that influence integration on a project (Ospina-Alvarado, Castro-Lacouture, Buwanpura, Mehamed and Lee, 2010): 1 Open information exchange, access to current information in a timely manner, and improved communication (Eastman, 2008). 2 Risk allocation, reward structure and establishment of common goals (Tang, 2001). 3 Culture of a project with emphasis on teamwork relationships and team building (Sullivan, 2009). We therefore need a different paradigm: a new model through which to adapt our tools and systems to the dynamic social context. There is need for a theoretical framework for analysing and planning the development of the forms of cooperation and organisation in the project delivery environment. We require a method by which to distinguish different pertinent aspects of cooperative work and to analyse specific characteristics of these aspects and their interplay (Schmidt, 1991). This prompts the chapter’s research question: where is IPD coming from and going to? In everyday thinking, the world is seen to consist of objects having certain qualities and mutual relationships. Common sense treats objects as isolated and fixed. This type of thinking focuses on how objects and conditions are here and now, ignoring the chain of interconnections within which they have emerged and exist. It also tends to ignore the inherent inner dynamic, self-motivation, and transformation of objects and phenomena. Although everyday thinking is adequate in many areas of practical activity, it does not suffice for analysing change and carrying out developmental interventions in complex work activities (Virkkunen and Newnham, 2013). In this regard we will introduce activity theory, also known as cultural-historical activity theory (CHAT) as a broad theoretical framework through which to describe the structure, development and context of human activity (Bertelsen and Bødker, 2003). This provides the context to the task of integrating project delivery and to analyse the wider forces that affect integrated production processes.

Activity theory The original model for describing human activity is a triadic relationship between a subject and an object mediated by tools. However, these three elements cannot be pulled apart without violating the core essence of human activity (Leontyev, 1978). In contrast, the focus of activity theory is the social setting within which activity takes place. Its strength lies in the fact that it bridges the individual subject and the social reality. Accordingly, it is instead built around the primary interaction between subject–community–object. 486

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The unit of analysis in activity theory is the concept of object-oriented, collective and culturally mediated human activity, or: activity system. Therefore, in order to describe and explain human behaviour in a more consistent and systematic way, three more elements – community, division of labour (DoL), and rules – are incorporated into the original model (Engeström, 1987). This forms the activity theory system model (ASM) shown below. For example, the system shown in Figure 22.1 can be reorganised with the following definitions at a project delivery level: •• •• •• •• •• •• ••

Subject: Project architect, engineering and construction (AEC) professionals who perform daily planning, design and construction activities. Community: Owners, end users, government agencies, supply chain, external knowledge consultancies, insurance companies, banks. Object: Transformation of knowledge of subject and community into design information that successfully identifies and addresses project constraints and aims. Outcome: Facility efficiently designed for best value and user needs. Tools: Two dimensional (2D) drawings, information and knowledge, digital tools, building information model (BIM) and BIM-enabled technology. Rules: A spirit of mutual trust and cooperation. Payment type, contract and specification, information exchanges, insurance. Relations between AEC professionals (Subject) and key stakeholders (Community) are mediated by the Rules. Division of Labour (DoL): The way to arrange works related to project delivery among key stakeholders in the (Community). Roles and responsibilities. Relations between the Object and key stakeholders in the Community are mediated by the DoL.

Physical or conceptual instruments that the subject uses to perform the activity.

Tools

Immediate goal of the activity

An individual or organisation who performs an activity Subject (i.e., the focus of a study)

Rules Laws, norms, conventions, customs and agreement that community members adhere to while engaging in the activity

Object

Outcome The long-term results of executing the activity

Community

Division of Labour (DoL)

Anyone who shares the same knowledge, interests, stakes and goals to accomplish an activity.

The way to arrange works across the community in an activity

Figure 22.1  Activity-system model (ASM) (Source: Adapted from: Engeström, 1987, p78)

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This model is useful in explaining what Scott (2014) refers to as the cultural-cognitive pillar of institutional theory. He identifies three pillars of institutional theory (we explain this theory in more depth in Chapter 2 and Chapter 10) comprising the regulative pillar that includes the rules, regulations and accepted organisational administrative processes; the normative pillar that comprises the cultural values of individuals and groups of people who participate in the organisation; and the cultural-cognitive pillar that is a taken-for-granted shared understanding of how things are done. The regulative pillar is seen as the ‘Rules’ in Figure 22.1 and ‘Community’ may be seen as the normative pillar. The cultural-cognitive pillar may be explained in terms of the way that ‘Community’ and the ‘subject’ interprets ‘rules’ based on the ‘DoL’ and ‘tools’ that are deployed. Thus CHAT and the ASM may help us understand how the cultural-cognitive pillar of institutional theory operates in practice. Activity theory considers an entire work/activity system (including teams, organisations, etc.) beyond just one actor or user. It accounts for environment, history of the person, culture, role of the artefact, motivations, and complexity of real-life activity. One of the strengths of AT is that it bridges the gap between the individual subject and the social reality (Engeström, 2000). Organisational and social constraints and practices impact upon the individual, cognitive processes and the realisation of these in specific tasks. Any adequate characterisation of work activity therefore requires analysis and synthesis of information from individual/cognitive, social and organisational sources. Existing frameworks, emanating separately from these separate disciplines do not present an adequate means of studying the dynamics of collaborative activity. We can illustrate this effect using a simple technology example. Rogers and Ellis (1994) argue, using an example of the activity of word processing when writing a report, that there are often disruptions and discontinuities in the word processing activity: such as printing a draft to get a better holistic view of a report, for example. The action of sending the document off to print, then waiting for it to be printed causes a disruption. This may take some time and so people tend to fill in the ‘time gap’ by engaging in another task. This behaviour pattern can mask how the system involving writing a report actually functions. Thus, it is important to consider the context of an action when designing or redesigning a system. Activity theory provides a philosophical and cross-disciplinary analytical framework for different forms of human practices at both the individual and social levels in order to identify and organise causal factors in a more consistent, systematic way (Kuutti, 1996) and to aid in the design of our interactions. It is also used for investigating the human choice of tools in innovation diffusion (Sun, 2016) and in the construction industry as a theoretical basis for analysing the complexity of interactions of action in projects, and interpreting the development of tools in activities. Activity theory introduces a change in perspective in that it sees action not as the execution of a ready-conceived plan, but as adaption to context. Suchman views plans as ‘an ad hoc starting point’ (2007, p27). It encourages discussions by diverse groups of stakeholders and can be useful in situations where it is necessary to explore the diverse communities and social contexts of a system (Lu, Chen, Lee and Zhao, 2018). It is useful for studying groups that exist largely in virtual form with communications mediated largely through electronic and printed texts (Foot, 2001). In recent years, activity theory has been extensively employed to provide an analytical framework for the design and analysis of human–computer interaction (HCI) and computer-supported cooperative work (CSCW). This paper adapts this method to the field of project delivery and

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operations in the construction and infrastructure field, mindful of the three integrating factors: information exchange, risk/reward and culture presented by Ospina-Alvarado et al. (2010).

Contradictions as drivers of evolution of the ASM Activities can be analysed through a set of key terms, namely, interaction, mediation, disturbance, contradiction and evolution. •• ••

••

••

Interaction: Subject, Object and Community are the three main interacting elements. Therefore, the three main types of interactions are: subject–object, subject–community and community-object. Mediation: Tools, rules and DoL are the three main mediating elements. The three primary mediating relationships are: a tool mediates the interaction between a subject and the activity object (the subject achieves the object by using the tool); rules mediate interactions between the subject and the Community; and DoL mediates interactions between the Community and the object of the activity. Contradiction: To understand the concept of inner contradiction in an activity system, one has to bear in mind that the system is based on the actors’ continuous action through which they repeatedly produce the outcome and regenerate the system. From an actor’s perspective, an inner contradiction means that two things that determine his or her action or two processes that the action is part of in the system pull the action in opposite directions (Virkkunen and Newnham, 2013). Disturbance: The inner contradictions cannot be directly observed but become known only through a historical analysis of changes in the structure of the activity and an actual empirical analysis of their manifestations in the practitioners’ daily actions and their coordination. They manifest themselves as disturbances, ruptures and waste in the processes through which activity is realised, as well as conflicts and disagreements between individuals, individuals’ dilemmas, and their experiences of paralyzing motive conflicts and double-bind situations (Engeström and Sannino A, 2011).

Engeström identified how contradictions arise from four sources of interruptions to planned ways of acting (1987;2014). The first contradiction occurs within an element, for example a change arising out of tools used or means of doing the work such as moving from using paper-based 2D drawings to a 3D BIM design mode. A second type of contraction occurs between two elements, such as a conflict over contradictory rules, regulations or guidelines. An approval process change may stem from an organisation-internal or an external source: requiring a change to the way that designs are signed off and accepted, for example. The third type of conflict may happen with new motives or ways of working. For example, in moving from a position of single-team responsibility and accountability, as occurs on traditionally delivered project forms, to a joint accountability for the final project outcome that we see with an IPD approach. The fourth contradiction occurs between two concurrently interacting systems. In a collaboration context such as IPD there may be this type of conflict and mismatch occurring when a subject (or Community) is being pressured to conform to the home organisation’s governance arrangements while also being obliged and required to act differently within an alliance context, for example. The result of these conflicts is that they impose inefficiencies, stress, disturbance and confusion that have to be resolved. Figure 22.2 illustrates these types of conflict.

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Primary contradiction - mismatch within the element

Secondary contradiction - mismatch between two interacting elements

Object

Subject

Tools

Central Activity

Rules

Community

Object

Subject Central Activity

Tertiary contradiction - reforming the object/goal

DoL

Rules Community

Tools

Subject

Object

Central Activity

Rules

Community

DoL

DoL

Quaternary contradiction - contradiction between two concurrent interacting systems

Figure 22.2  Classification of contradiction in activity theory (Source adapted from: Engeström, 2014, p71)

IPD has developed from such systematic historical contradictions. The need on the one hand for the incorporation of digital technologies and information modelling has led to disconnection between mechanisms and procedures for exchanging information and collaborating on designs and delivery approaches. Despite its existence for over 30 years, the New Engineering Contract (NEC) suite of procedures has not taken root in the construction industry to any great depth in most jurisdictions. Perhaps the underlying reason for this is that the NEC was designed as a mechanism for promoting collaboration, early warning and proactive management but was not supported by the range of digital technologies that we now have at our fingertips. Hence, the contradictions come about through the range of activities that different subjects, using different tools and abiding in different roles, attempt to make sense of the system and to deliver the object, the finished project. Thus, in the world of construction projects there have been many disturbances that can be related back to the lack of an appropriate activity system that is well understood and used by the subjects within the system. We attempt in the following section to illustrate this viewpoint by means of a contemporary example from the Hong Kong construction industry. We adapt the contradiction-analysis approach used by Yoon, Ham and Yoon (2016) on their study on human-related accident analysis based on activity theory. They analysed human-related accidents using the four misfits illustrated in Figure 22.2 as a starting point in understanding systemic problems that triggered accidents. We use this approach to analyse design conflicts on a case study project in Hong Kong through investigating the following disturbances, as covered by Table 22.1:

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Integrating capital project delivery Table 22.1  ASM element and disturbance type ASM element

Disturbance type

Activity Subject Tools Object Rule

Consequences arising out of a sequence of events leading to human error. Background of people involved in an activity and the errors they were responsible for. Problems by the subject arising from errors in using the tool . Problems related to the object/motivation of the activity. Problems of the explicit or implicit norms, and existing interpretation of rules and regulations used in the Community. Problems related to people involved in the case study project. Problems related to the responsibility and accountability of the people comprising that Community.

Community DoL

Having described the role of contradictions and their disturbance classification (Table 22.1), we now look at how they are identified through the disturbances in an activity’s smooth running. Disturbances are the manifestations of underlying contradictions in an activity system. Through identifying the disturbances in an activity and analysing the root contradictions, a full and clear set of drivers can be identified, and opportunities and recommendations can be made in order to accelerate the evolution of the activity system from social, political and technical perspectives. Engeström’s (1987) account of change as connected to expansive learning involves new activities and the transformation of activity systems. Expansive learning includes change in all the elements in the activity system. The subjects develop new types of agency, their use of tools changes, and new rules apply. At higher levels, transformation occurs through division of labour and new forms of interaction between communities. This shows how the activity system includes individual, interactional and collective dimensions: in summary, a multilevel approach. Systematic historical contradiction provides the mechanism that transforms institutions, as argued by Mørch, Nygård and Ludvigsen (2010) who used interviews, observation, and video-recorded workshops, and analysed software artefacts and documents pertaining to software-development activities in their study of the use of Microsoft Planner and other products. The way that transformation happens and is re-institutionalised though sense-making via the cultural-cognitive institutionalisation pillar (Scott, 2014) is illuminated by the case study below.

Case study The following case study details the design development and approval activity for the external wall system (EWS) of the station entrance building (SEB) of a major rail infrastructure project in Hong Kong that was completed in 2018. The EWS concept design was geometrically and technically complex, supported by secondary and tertiary steelwork that spanned between undulating primary trusses. The trusses were supported by mega-columns at 35-metre centres forming a huge open atrium within the SEB. The shape and movement requirements of the structure resulted in a number of major engineering challenges that had to be accounted for in the EWS design. Design challenges included: truss pre-loading sequence, large pre-cambers, onerous inservice movement requirements, complex setting-out procedures and intricate tolerances. The large number of different EWS types and the fact that a majority of the glazing and cladding panels were unique in shape resulted in a huge amount of design approval,

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fabrication and installation documents. However, the largest challenge was the introduction of building information modelling (BIM) as a tool for design development and coordination and the new information-management systems that would accompany this. These engineering challenges, complex geometry, lack of standardisation and new BIM requirements made the project particularly high risk in terms of time and cost. Through a sometimes ambiguous DoL, numerous parties retained design responsibilities and input, including the client/project manager, client’s consultant architect and engineers, main contractors (MC) design team and specialist EWS sub-contractors. Interfaces and input from steel structure specialist sub-contractor (SSC), statutory authorities, independent checking engineers, and other disciplines, such as civil engineering, mechanical, electrical, plumbing (MEP) and other suppliers also formed part of the design-development process. The task in hand for the entire design-delivery team was to: develop the design from a concept to a detailed design that could satisfy aesthetic, structural, performance and statutory requirements; that could be fabricated effectively; and could be installed taking account of movements, tolerance, cambers and complex setting-out requirements. To achieve this, the activity required a clear and open exchange of information and a collaborative knowledgecreation culture to address these challenges. The concept design of the EWS and the detailed design of the steel support structure were developed in 3D by the client’s consultants and translated into 2D hard-copy drawings for inclusion in the contract design documents. The only concept design 3D model transferred to the MC was a panelisation-surface geometry model for the EWS. Despite this complexity, the medium of communication for design approval by the client/ project manager and statutory authorities was also solely through hard-copy 2D drawings. Although a majority of design teams were situated on the site, they were housed in separate offices, with the specialist EWS sub-contractors design team subsequently moving off site and being split between their Hong Kong, European, Indian, Middle-East and mainland China offices. Within the main contractor and specialist EWS sub-contractor organisations, 2D and 3D design and coordination functions were treated as largely separate entities. The contract was awarded under a two-stage tendered, lump-sum traditional contract between the project manager and the main contractor, with the EWS package carved out and sub-contracted to the specialist EWS sub-contractor with a back-to-back agreement. Figure 22.3 represents the ASM for this case study. The analysis was carried out and presented from the point of view of the lead author who held the role of Design Manager for the EWS package, acting on behalf of the main contractor. The data depended upon is largely derived from project documentation, notes and reflections and from deep involvement as a project participant. While this has the limitation of being potentially biased, it does have the advantage of offering a useful case study to illustrate how activity theory may be used as a sense-making and process-improvement tool. To achieve a comprehensive analysis of the activity system, disturbances and contradictions, key representatives of the whole design-delivery Community should be engaged. As such, this case study analysis is presented with the qualification that it represents the experiences and vantage point of one person only.

Disturbance analysis The following summary uses the format from Table 22.1 and analyses the disturbance associated with the design development and approval process.

492

Tools

Subject

Community

Tools

knowledge management ASM

Figure 22.3  Case study: design development ASM and its evolution

Agreement

*Scope update/ clarification

DoL

Project Manager Architect Engineer Statutory Authorities Status 1: Post tender design Teambuilding workshops information and

Traditional transactional contract Lump sum payment ‘Collaboration Charter’ Codes of Practice

Rules

Traditional transactional contract Lump sum payment

Subject

Work assignment of traditional design development

DoL

Subject



 Community



Outcome 2D drawings and information

Object Design approval or comment

Object

Subsequent design approval ASM

PM Architect Engineer Statutory Authorities

Object Design document creation

Subject Main Contractor EWS Sub-contractor

Community

BIM Models Information and knowledge

2D drawings Surface Geometry Model

Traditional transactional contract *Teambuilding workshops Lump sum payment Status 2: ASM *PM-MC = Target cost *MC-SC = new lump sum after payment Supplimentary *Performance incentives

Future information and knowledge management ASM

?

Deleted sub-elements in new status

Rules

Preceding design intent production ASM

* Extra sub-elements in new status

PM Architect Engineer

Subject

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Activity The delivery-design period increased from two to seven years. There was a huge amount of additional resources required for all parties. Adversarial environment and breakdown of working relationships occurred. Valuable energy was diverted into blame-and-claim and ‘cover your arse’ (CYA) defensive behaviours with commercial language infiltrating design meetings. Design issues were being discovered in factories and on-site.

Subject There was a general lack of knowledge and experience of digital-information tools in the general design and planning workforce.

Object The end design did not match the architect’s interests or meet the quality requirements of the client. It was not delivered on time or to the original budget.

Rule The contract was relied upon heavily. It was used as a go-to document for leverage in many disagreements, meaning that optimum solutions were not always the primary focus of technical problem-solving.

Community There was a lack of trust between parties that stifled information flow and joint problem-solving. A tribal mindset hindered knowledge sharing and creation. Responsibility avoidance stifled innovation. Separate offices exacerbated an ‘us versus them’ mentality.

Dol The splitting of the project scope between parties resulted in a building that was not optimally designed for aesthetics, fabrication, buildability and performance. Rather, the design was developed in a linear and sequential process as it progressively transferred between parties with their own language, agenda and understanding of the object.

Contradiction analysis Drawing upon the four levels of contradiction suggested in Figure 22.2 (Engeström, 1987; 2014), we identify and discuss four contradictions that severely impacted the case study activity as illustrated in Figure 22.2.

Primary contradictions These contradictions occur as a mismatch within elements of an activity.

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1 Tools: a

Heterogeneous interpretation of the design intent, exacerbated by the fact that it was represented in data-poor 2D form. This resulted in conflict as the design developed; b 2D design approval documentation was not produced directly from the 3D model; c Division of the 3D model was planned for fabrication purposes only and not design coordination and review. This resulted in heavy models being produced that were cumbersome for design review; d There was no information exchange portal for 3D information. This resulted in exchange being carried out through email and hard-copy transmissions. 2 Rules: a

The division of the design parties under separate contracts made information flow transactional and encouraged responsibility push, CYA behaviours and a blame-andclaim culture.

3 DoL: a b

2D and 3D design was developed by separate teams in tandem resulting in differences between approved 2D design and the 3D fabrication model; The design scope of major building components given to the party who was not responsible to supply it, resulted in ease of design being favoured over cost, fabrication or buildability.

4 Community: a

Separation of organisations work spaces greatly reduced opportunity for a collaborative mindset and serendipity.

5 Object: a

The heterogeneous understanding of the object resulted in repeated design submissions and conflict

Secondary contradictions Secondary contradictions occur as a mismatch between interacting elements of an activity. 1 Tool–Subject: a

Requirements for formal information exchange through 2D design only and some subjects having a lack of experience in 3D design. This resulted in coordination problems.

2 Community–Subject: a

The fractured information exchange between the design-delivery team with the project manager and main contractor controlling the information exchange in the form below:

Consultant > project manager > main contractor > specialist sub-contractor

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3 DoI–Object: a

As the design developed, any and all items seen as a deviation from the original design intent required negotiation and delays caused by insistence or formally instructed change: in some cases that was up to two years.

4 Dol–Subject: a

EWS models not passed to the main contractor by the specialist sub-contractors for reasons of ‘commercial considerations’, therefore EWS clash analysis was carried out by the specialist sub-contractors in isolation of the main contractor overview. 5 DoI–Community: a

Protection of scope resulted in all parties rejecting responsibility for some major engineering challenges resulting in missed opportunities for collective problem-solving as a Community and resulting therefore in a sub-optimal solutions.

Tertiary contradictions These contradictions occur as a mismatch reforming the object/goal. 1

There was a mismatch between the contract documents and specifications, built around the analogue 2D-design-development process; developed for the analogue design age; and the contract required a 3D digital-information management process for the complex BIM-enabled design.

Quaternary contradictions These contradictions occur as a mismatch between two concurrent interacting systems. 1

The mismatch between the pre-award ASM which developed the 2D design intent: Objects -> Tools, and the design-development ASM which required 3D tools. 2 The mismatch between the statutory authority data-poor 2D-design review practices and requirements and the data-rich 3D tools used to develop and communicate the developed design. 3 The mismatch between the design information produced and collated for project handover and that required to efficiently manage the building in the future.

Discussion What is evident from Figure 22.3 is that the original project ASM was a highly traditional transactional system which separated key members of the design-development team through the use of a contract and specification that was largely developed for the analogue era. This procurement model did not suit the realities of the highly complex building design that was enabled by and reliant on effective joined-up use of BIM. The design development was contracted to the MC and divided further with the EWS design being contracted to the SSC. Design information was communicated between all members of the design-development Community through the medium of 2D hardcopy drawings, but was required to be developed using 3D BIM. Design changes were largely decided in isolation of the MC and SSC, also being instructed through 2D hard-copy transmittal. Inevitably there was a breakdown in the subject–community–object interaction. 496

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Accordingly, from the disturbance analysis, we can see that that there was a fractured information exchange, lack of collaborative knowledge creation, protection of scope, general distrust of abilities and intention, and a reliance on referring to contract documents for leverage in disputes. The result was a ‘letterbox’ approach to information transfer, and limited problem identification and resolution. There was an over-reliance on informal personal networks and relationships to overcome many impasses. The contradictions resulting from this approach and the contractual and physical separation of project design participants become apparent through the contradiction analysis, summarised below: •• •• •• ••

A primary contradiction caused by this reliance on 2D information for communication resulted in the 2D and 3D design information being developed separately and in tandem, leading to unaligned understandings. The subject–community secondary contradiction shows a fractured information exchange that mirrors the same physical and contractual separation of the Community. The tertiary contradiction highlights the fact that the chosen procurement model was largely developed for the analogue era for a 2D-design process, and did not reflect the unique requirements and risks of this BIM-enabled project. The quaternary contradictions relate to the 2D information entering and leaving the ASM through the form of the tools created by the preceding design intent ASM and the documents (outcome) created for the subsequent approval ASM, and their mismatch with the 3D tools needed to mediate between subject and Community.

It is clear that there were contradictions in alignment of objectives and understanding, collaborative knowledge creation and effective information exchange, leading to the breakdown of trust, relationships and teamwork. Tool, rule and DoL choices and application with regards to open information exchange, project culture, and risk/reward allocation were not effective mediators between subject–community–object and, as such, the activity was subjected to disturbance and ultimately a ‘break-fix’ moment. Remedial action through the form of a supplementary agreement was implemented in an attempt to overcome the breakdown, thus changing the ASM to that shown in Figure 22.3, stage 2. The project manager’s original approach to risk management for the design was to transfer responsibility for design development to the main contractor and to communicate the design intent through 2D drawings and specifications. In return the main contractor was paid a lump-sum figure to take ownership of this activity. This strategy had the effect of separating project knowledge down organisational lines and creating boundaries at precisely the stage that the opposite needed to happen. By passing all BIM-development responsibilities for the whole design, using a traditional contract and specification and communicating all design information in 2D format, the client attempted to limit their exposure to the unknown risks of the introduction of this new tool. In doing so, the net project risk was increased and the ‘break-fix’ moment became inevitable. The idea that the risk and responsibility of the development of the detailed design and the introduction of a radical new tool for such a complex facility can be neatly transferred through a transactional lump-sum contract proved to be mistaken. What we see from Figure 22.3 is that, as part of the ‘fix’, the stage 2 remedial actions were largely focused on remodelling the risk/reward allocation through rules related to new payment terms. There was a re-transfer of risk back to the project manager through a target-cost payment, and new target dates and costs. However, the majority of the underlying contradictions identified in the above analysis remained unaddressed. For example, the need for a thorough and collectively developed BIMexecution plan (BEP) in order to agree and plan project information exchanges, or meaningful 497

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changes related to social interactions, teamwork and trust. Arguably, at the point of breakdown, the ability to address the information-management contradictions was, effectively, largely gone, highlighting the problem with a culture of reliance on the ‘break-fix’ model.

Future project delivery activity-system design It is evident that when we introduce new instruments, such as BIM or the NEC into our working practices – instruments that aim to change the way we go about our work – we cannot do so through a simplistic view of activity. We require a process through which to visualise the true complexity of our activities. A means of forming a dialogue through which we can identify the likely disturbances and instigate complementing instruments through our tools, rules and DoL with a view to avoiding breakdown in our interactions between subjects, Community and object. Table 22.2 proffers some of those instruments and considerations that we currently use or that are being raised as possible future solutions, and presents them in a format that allows us to build the wider context with regards to risk/reward, information management and culture at cognitive, social and organisational levels. Readers may wish to refer to Chapter 16 for further discussion on digital technology advances and tools for IPD. Figure 22.4 inserts them into the Table 22.2  Future tools, rules and DoL? Organisational

Tools

Rules

DoI

Risk/Reward

Alliance contracts Project bank accounts

PE plan

Open info exchange Culture

Common data environment Social capital initiatives

Target-cost payment Integrated project insurance (IPI) Multi-party contracts

Social/Project

Tools

Risk/Reward

Blockchain

Knowledge organisation chart

Psychological safety policy Organic organisation, organisation ecosystems Rules

DoI

Blockchain, Target value design (TVD) I-Lab/CAVE, whiteboards IM Standards (ISO19650) VR/AR/MR, BIM, BEP BEP Collaboration software Spirit of mutual trust and cooperation

Collaboration workshops Project CoP, BEP Shared problem identification and resolution (ownership)

Individual? Cognitive

Tools

DoI

Risk/Reward

Approach to complexity Mutual dependency and and mutual accountability understanding and trust Big room Knowledge transfer

Open info exchange Culture

Open info exchange Culture

Workplace design Computer programming

Rules

Smaller power distances Psychological safety

Project risk workshops

No-blame/responsibility push

Collaborative mindset, Co-learning PE plan Celebrate failures

[Where: PE plan = project execution plan; I-Lab = Innovation Laboratory; CAVE = computer-assisted virtual environment; VR = Virtual Reality; AR = Augmented Reality; MR = Mixed Reality; BEP = BIM-execution plan; IM = ISO (International Standards Office) digitised information management; CoP = community of practice]

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Integrating capital project delivery Tools BIM model Virtual/augmented/mixed reality Common data environment (CDE) eSubmissions 2D drawings Information and knowledge

Information Exchange ASM

Client Project manager Subject Architect Engineer Contractor Specialist sub-contractors Facility manager

Risk/Reward Structure ASM

Object Project Information Model (PIM) Asset Information Model (AIM)

Rules

Community

DoL

Relational/Alliance contract Pain/gain share Standard form contracts and specifications Integrated Project Insurance (IPI) BIM execution planning (BEP) Project bank account

Users/owners Statutory Authorities Integrating Agents Project communities of practice ICT programmers Minority voices Workplace design

Information exchange Design for Manufacture (DfM) Vertical integration Colocation and workplace design Agile practices Design sprints

Outcome A design that provides: - optimum space/facility for end users - best value for financiers - efficient operation - flexibility in future uses

Culture - Teamwork & Relationships ASM

Figure 22.4  Future project delivery activity-system model?

ASM as a framework through which to visualise and discuss our activities by focusing on the interrelation between our artefacts as a heuristic aid for identifying and exploring the multiple contextual factors that shape or mediate our goal-directed, tool-mediated activity. These practical tools can be applied in order to take a more sophisticated and sensible approach to organisational change, how we frame and design project organisation and how we transform our collaborative work in practice. What do the contradictions and disturbances look like when applying combinations of these and other artefacts? How do we adapt them to take into account the characteristics of our projects, participants and stakeholders? Can we still rely on transactional rules when the tools we use rely upon open information exchange and integrated knowledge management? Should we continue to design our DoL with the primary goal of transferring risk and responsibility? Is the design of these elements focused on building a collaborative culture and a strong Community? These are largely issues about taking a design-thinking approach, as discussed at length in Chapter 8, so that the systemic implications of IPD are considered when choosing the procurement delivery approach (that impact the design of rules, DoL and Community interaction elements) and designing-in the requirements for tools that match the system.

Conclusion In the project presented in the case study there was a problem with a leak in the EWS that, despite considerable effort, was proving difficult to fix. It was persistent; every time a panel 499

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was removed and the flow stemmed, a new leak would appear soon after in a nearby location. It wasn’t until we stopped, stood back and employed a more sophisticated tool, in the form of a brush electrode spark test, that the source of the leak was located some 20 metres away. Likewise, the persistent problems that were experienced with information flow required a sophisticated tool to identify the underlying source. But this did not happen, and soon after the ‘break-fix’ event, the same problems quickly resurfaced. In capital-works projects, our so called ‘wicked problems’ are much more complex, yet it is the same problems around relationships, information and knowledge sharing, and distrust that often surface. The same approaches to solving these problems are frequently employed, focusing on the visible surface issues, only for the problem to resurface elsewhere soon after. We likewise need to employ a more sophisticated tool to locate the source. Conversely, an increasing number of governments and organisations are beginning to claim to have achieved ‘digital transformation’. However, the contradictions that this introduces at cognitive, social and organisational levels have only started to be understood. Without redesigning our activity systems by developing our interrelated tools, rules and DoL then what they have arguably achieved is simply a digitisation of the old analogue activity systems. In Hong Kong the Government has recently mandated the use of BIM and NEC on all major capital works. However, the manner in which this is being implemented by individual government departments is akin to the traditional triadic view of activity and a transactional approach to transferring the known and unknown risks ‘away’. Current contract documents apply content with little regard for context. These newly mandated tools and rules risk being tacked onto outdated delivery models with the expectation that the ‘collaborative working’ problem is automatically solved with technological advances. This case study clearly illustrates the dangers of not considering context and history, as well as how systems may or should be integrated and how people might be prepared for the changed work practices, activities, tools and DoL, for example. In work as in life, we often focus our energies on addressing the immediately visible surface issues, failing to properly identify and tackle the root causes precisely because they are not easy to see. As a result, we see the chronic issues that plague our projects and industry and we stick to old, outdated work practices or struggle to adapt to new and better ones. Activity theory is presented here as a way to make those root causes and contradictions visible by identifying and formulating problems to investigate the core source of their impact. It aims to formatively redesign the activity instead of pushing through pre-conceived solutions in isolation. This philosophical concept, related to the distinction between the immediately observable surface of an activity and the internal relationships in its systemic structure, is fundamental in understanding the dynamics of the development of an activity system. Application of activity theory enables us to identify solutions by using design thinking, as discussed in Chapter 8, and reconceptualising the object of the activity. Changing the principle of executing an activity through the development of new tools, rules and forms of DoL reforms the internal and external relationships of exchange and collaboration. Its capacity to facilitate analysis and synthesis of information from individual/cognitive, social and organisational sources makes it useful for such complex tasks as designing and intervening in evolving activity systems to effectively integrate project information and knowledge management (creation, transfer, use) from project conception to operation. Engaging practitioners by giving them agency in the development of their systems of activity facilitates ownership of the new activity system. By overcoming the separation between the overall view of an activity from the outside and partial views from the inside, as well as subjective devotion and objective analysis, it enables practitioners to jointly analyze and develop their whole systems of the activity (Virkkunen & Newnham 2013). 500

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Instead of attempting to control our world, we should accept that all of our designs have unintended consequences and drift in unexpected ways. Therefore, instead of pushing our initiatives through at any cost, we may look to cultivate a more dynamic delivery model, one that allows us to continually test its effectiveness, identify its contradictions, and give participants and stakeholders agency in its design, interventions and evolution. We need to transform how we analyse and procure our projects and allow flexibility in all components of our ASMs. Activity theory has been presented as a dialectical framework and a rich vocabulary with which to analyse and plan a more integrated form of project delivery. Activity theory has the potential to provide an opportunity for transformation by: acting as a framework to drive inter-organisational learning; aiding diffusion of innovation as a framework for formative interventions; providing an instrument to analyse collaborative working practices in situ; and aiding relational procurement decisions and project planning to take place. This chapter makes a contribution to IPD theory and practice by answering our research question – where is IPD coming from and going to? We used a case study and AT to analyse and explain how IPD could be more effectively implemented. Our focal point of using AT to consider context and history bridges a gap in the way that IPD is often explained. This approach also helps to better explain how the cognitive-cultural pillar of institutional theory (Scott, 2014) works to help practitioners with their sense-making in complex situations and provides useful guidelines.

References Bertelsen, O. W. and Bødker, S. (2003). Chapter 11, Activity Theory. HCI Models, Theories, and Frameworks. Carroll J. M. San Francisco, Morgan Kaufmann: 291–324. Eastman, C. M. (2008). BIM Handbook : A Guide to Building Information Modeling for Owners, Managers, Designers, Engineers, and Contractors, Hoboken, NJ, John Wiley & Sons. Egan, J. (1998). Rethinking Construction – The Report of Construction Task Force, report. London, Department of Environment, Transport and the Regions, ISBN 1851120947: 38pp. Engeström, Y. (1987). Learning by Expanding: An Activity-Theoretical Approach to Developmental Research, Helsinki, Orienta-Konsultit. Engeström, Y. (2000). “Activity theory as a framework for analyzing and redesigning work.” Ergonomics. 43 (7): 960–974. Engeström, Y. (2014). Learning by Expanding: An Activity-Theoretical Approach to Developmental Research, Cambridge, Cambridge University Press. Engeström, Y. and Sannino A (2011). “Volition and agency in organisations: an activity-theoretical perspective.” Conference of Association International de Management Strategique (AIMS). Detchessahar M. and B. Venard. Nantes, France, Association International de Management Strategique (AIMS). Foot, K. A. (2001). “Cultural-historical activity theory as practice theory: illuminating the development of conflict-monitoring network.” Communication Theory. 11 (1): 56–83. Kuutti, K. (1996). Activity Theory as a Potential Framework for Human-Computer Interaction Research. Context and Conciousness: Activity Theory and Human-Computer Interaction. Nardi B. A. Cambridge, MA, MIT Press: 17–44. Latham, M. (1994). Constructing the Team, Final Report of the Government/Industry Review of Procurement and Contractual Arrangements in the UK Construction Industry. London, HMSO. Leontyev, A. N. (1978). Activity, Consciousness and Personality/A. N. Leontev, translated from Russian by Marie J. Hall, Englewood Cliffs, NJ, Prentice-Hall. Lu, Q., Chen, L., Lee, S. and Zhao, X. (2018). “Activity theory-based analysis of BIM implementation in building O&M and first response.” Automation in Construction. 85: 317–332. Mørch, A. I., Nygård, K. A. and Ludvigsen, S. R. (2010). Adaptation and Generalisation in Software Product Development. Activity Theory in Practice: Promoting Learning across Boundaries. Daniels H., A. Edwards, Y. Engeström, T. Gallagher and S. Ludvigsen. New York, Routledge: 184–2016. Ospina-Alvarado, A. M., Castro-Lacouture, D., Buwanpura, J., Mehamed, Y. and Lee, S. (2010). Interaction of Processes and Phases in Project Scheduling Using BIM for A/E/C/FM Integration. Construction Research Congress 2010. Reston, VA, American Society of Civil Engineers: 939–948.

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23 IPD FROM AN ETHICS PERSPECTIVE Beverley Lloyd-Walker and Derek H. T. Walker

Introduction This book focuses on integrated project delivery (IPD) with many of our examples and the discussion being based within the context of project alliancing in the construction industry. In this chapter we take an ethics perspective. Many IPD alliancing projects that have been undertaken and documented are public-sector infrastructure construction projects (Morwood et al., 2008; Wood and Duffield, 2009; Walker et al., 2015) in Australia, New Zealand (Ibrahim et al., 2017), Finland (Lahdenperä, 2017) and the Netherlands (Laan et al., 2011). Megaprojects in the UK such as Heathrow’s Terminal 5, Crossrail and the London 2012 Olympics followed an IPD approach (Davies et al., 2014; Davies and Mackenzie, 2014). In the USA, IPD has also been associated with mainly healthcare infrastructure projects (Lichtig, 2005; American Institute of Architects et al., 2010; Cheng et al., 2015). The raison d’être of public-sector projects is to serve society through provision of a specific need such as health care, education, transportation and communication infrastructure. A feature of public-sector projects is that they meet the needs, and respond to the concerns, of a diverse group of stakeholders while providing value for money (Davies, 2007). According to a literature review on strategy and public-sector performance by Boyne and Walker (2010), responding strategically to this expectation is vital. We suggest that public-sector infrastructure project delivery needs strategic thinking and action through ethical reasoning and conduct. This ethical perspective considers stakeholder engagement to understand their values and what may be important to them. This prompts the research questions to be answered by this chapter: 1 2 3

How does taking an ethics perspective on a project-delivery choice enhance our understanding of why the IPD approach, and in particular alliancing, may be appropriate? What characteristics of alliancing, taken as an example of an IPD approach, are best examined from an ethical perspective to make sense of an IPD form choice? What implications does taking an ethical perspective have on the way that projects are led, and how project output and outcome performance might be judged?

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A quote from a study undertaken on assessing professional excellence in alliancing projects is worth opening with (Walker and Lloyd-Walker, 2011b, Appendix 5, p11 – Interview IV-10): we took them through alliancing 101 so they understood the principles of alliance, what are you trying to achieve. We got them to do some work on their own vision, if they look three years ahead what do they think was successful for them. We ran numerous processes which were all targeted at dragging out their values and their behaviours, and the behaviours had to demonstrate the values. If you say something and that’s your value, you’ve got to understand every action you take demonstrates your value, not every word you say, the words are irrelevant. So if you do something everyone will read it in one second flat, and that will be the culture of this organisation, or the value of this organisation. This quote illustrates the importance of integrity and holding a firm set of values underlying the way that project work may take place. Chapter 13 details the importance of trust and commitment in alliancing and IPD. A model (Figure 13.1) of trust was presented with integrity as a core element. Ridings et al. (2002, p276) relate the concept of integrity with transparency ‘in accordance with socially accepted standards of honesty’. We explore this way of thinking in this chapter, taking a broad ethics perspective. This chapter links to other chapters in the book that readers may wish to refer to. Chapter 4, for example, discusses values. This is central to an ethical perspective. Chapter 10 deliberates on culture and IPD projects. Chapter 13 explores the role of trust as an important element of undertaking IPD and Chapter 14 discusses stakeholder engagement in IPD projects. The chapter is structured as follows. First we introduce general ethical concepts that are pivotal in understanding the ethics perspective, and indicate how they link to the three research questions and how they relate to other chapters in this book. We then proceed to answer each of the three questions based on theories of ethics being applied to characteristics of alliancing. We apply our discussion to elements of the Collaborative Framework supported by institutional theory outlined in some detail in Chapter 2. We then provide a case-study example from a successful (output and outcome) alliance project in Australia.

Ethical perspectives When trying to understand the nature of ethics and ethical behaviour we can consider ethics from a number of perspectives in order that we do not assume the field to be simple or onedimensional. We can think of ethics in terms of: •• •• •• ••

Philosophy and philosophical thinking about morality, moral problems and moral judgement (Beauchamp and Bowie, 1997); Being defined as a study of what is good or right for people, what goals they ought to pursue and what actions they ought to perform (Velasquez, 1998); Being concerned with purposeful human conduct or activity (Robbins and Mukerji, 1990); Being focussed on improving the welfare of people and attaining a good life (Buchholz, 1989).

Ethics as a field of study has been in existence for centuries and some of the most famous philosophers have contributed to ideas and concepts that have developed into theories (Jónasson and Ingason, 2013b, p7). Ethical perspectives of project management (PM) have been a more recent phenomenon. The pragmatic view of ethics as being of any use as a frame of reference for action 504

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is that it is a field that helps guide us in a productive direction. It also helps us avoid pitfalls and issues resulting from unintended consequences to actions that pose a risk to the successful management of projects, due to facing stakeholder backlash or fury in reacting to actions or plans. Our experience of undertaking research in IPD is that managers of projects talk about workplace ethical problems in terms of dilemmas: situations in which they were faced with a difficult choice and where no clear-cut right answers existed. These often result in what may be described as ‘wicked problems’. Wicked problems are those in which there is no correct answer and choices are made on causing the least damage possible from actions that inevitably trigger disputes about what are right and wrong outcomes and outputs of those actions (Rittel and Webber, 1973; Finegan, 2010; Hancock, 2010).

Ethics and the field of project management Most professional associations have a code of ethics but these relate more to professional conduct and tend to stress obligations to ‘do the right thing’. PM teams frequently deal with conflicts when delivering a project as instructed by a client. They balance their duty to their client with issues they may perceive as compromises that impact upon other commercial entities, society or the natural environment. An example of the Project Management Institute (PMI) code of ethics can be found online at www.pmi.org/-/media/pmi/documents/public/pdf/ethics/pmi-codeof-ethics.pdf. Appendix A in that document describes the code’s evolution and development. A first version was developed in 1981 and the current version, accessed in March 2018, states that it was last updated in October 2006. The European-based International Project Management Association (IPMA) also has a code of ethics that was last updated in 2015. The link to that document is at www.ipma.world/assets/IPMA-Code-of-Ethics-and-Professional-Conduct.pdf. The IPMA code of ethics has a specific statement of principles relating to its: professional standards of practice; commitments to project owners and, directly or indirectly, stakeholders affected by the impact of a project or program of projects; commitments to co-workers and employees; responsibility to wider society; and sustainability and the natural environment. An example of the emerging interest in ethics is the Swiss Project Management Association seminar entitled ‘Values and ethics in project management’. A panel of experts was convened in 2008 and drew upon a small but influential group of PM academics and practitioner experts with an interest in this field. Some of them had previously published PM ethics articles in conference and journal papers. PM literature that specifically investigates and discusses the ethical perspective is available but somewhat limited. Early PM ethics literature includes Godbold and Turner (1996) but evidence that this is an emerging and recent perspective is reinforced by the inclusion in the Gower Handbook of Project Management, 4th Edition (Turner, 2007) of a chapter on managing ethics as the last chapter in that handbook (Godbold, 2007). Early contributions to the PM field as a means to expand PM thinking about ethics include Loo (2002) in Alberta, Canada, who investigated the use of vignettes and scenarios to explore ethical dilemmas. This approach was followed up in Iceland by Helgadóttir (2008) who wrote about how her Masters of Project Management (MPM) class participants used vignettes to workshop ideas around ethical dilemmas that enhanced their thinking and reflection competencies. Walker, Segon and Rowlinson (2008) wrote a chapter of a book on business ethics and corporate citizenship, with an emphasis on its application to the management of projects and this was used as a core component of MPM classes in Australia, Sweden and Hong Kong and the book has been used on numerous other MPM courses globally. More recently, Jónasson and Ingason (2013b) wrote a book specifically dedicated to the ethical perspective of PM. Kvalnes (2017, p288), in a recent book chapter, advanced the study of PM and ethics by linking PM and ethics 505

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through considering what is: legal; in accordance with an organisation’s values; moral by doing the ‘right thing’; sensible in view of the impact on reputation and good will; in accordance with business objectives and accountability; and ethical in terms of being justified. There have also been numerous publications of studies relating to corruption and ethical PM practices within a number of global contexts: in African (Bowen et al., 2007; Osei-Tutu et al., 2010), South America (Arroyo and Grisham, 2017), Australia (Zarkada-Fraser and Skitmore, 2000) and a literature review on corrupt practices, mainly construction project bidding processes (Le et al., 2014), that provide a global perspective of this particular ethical problem area. Thus we see an emerging and expanding interest in the application of ethics in the PM field globally. The issue of how to deal with dilemmas faced by ambiguous situations in which project teams find themselves in conflict with their consciences has also recently emerged as a study area with a research project involving case studies taken from a European, North American, Asian and Australian context (Müller et al., 2011; Müller et al., 2013). PM studies of ethical dilemmas reveal new insights into how project teams perceive their obligations and responsibilities for not only the way that project outputs are procured but also how their PM-conduct affects themselves and society, and how the project outcome impacts others (their industry sector, society and the environment). The study of ethics in general provides insights into how it can focus project teams and their leaders on the project outcome in contrast to being hindered by myopic constraints about delivering a project output that merely appears to satisfy the project owner. Frequently, a project owner is dissatisfied by a project output even if it delivers what they had asked for. Nogeste (Nogeste and Walker, 2005; Nogeste, 2006) wrote a doctoral thesis about this phenomenon, linking outputs to outcomes but also explaining that the client-briefing process has limitations. Understanding the impact of a project on other stakeholders is a complex process. Chapter 14 in this book details stakeholder engagement more fully and Chapter 26 discusses project output and outcome issues in more depth. The ethical perspective, as noted by the indicative literature examples in Table 23.1, provides illuminating examples and insights into using ethics as a strategic opportunity to make a greater value-adding contribution through a project. Consideration of ethics and the value system of stakeholders is a key aspect of IPD projects, especially alliancing public-sector infrastructure projects. This is because key result areas (KRAs) include specific society, environment, sustainability and stakeholder-engagement expectations. Table 23.1 draws upon a literature review, initially undertaken by Walker and Lloyd-Walker (2014a, p569) as part of a research project that investigated elements of ethics and how they may affect project managers facing ethical dilemmas. We adapted it to include recent relevant insights. Table 23.1 provides a framework for discussing the first question posed in the chapter introduction: How does taking an ethics perspective on a project-delivery choice enhance our understanding why the IPD approach, and in particular alliancing, may be appropriate?

Ethical concepts There has been much concern recently expressed (Soltani, 2014), and in fact for many decades, about businesses confusing their desire to make money as a first priority above strategically thinking about why an organisation exists and what its true purpose is (Hosmer, 1994a). Unethical behaviour, such as the Enron scandal and other culturally toxic, greedy and unscrupulous workplace behaviours that led to both recent and historical financial crises, point to the devastation that may be caused by organisations failing to consider ethics as a core element of their business strategy. This is accompanied by poor leadership that is often moulded 506

Institutional theory and ethics

Governance and ethics

Trust and ethics

Models and explanations of ethical conduct issues Culture and ethics

How are rules, laws, norms and patterns of action embedded in groups and societies?

What drives people to trust in others and their organisations and what is the actual nature of trust? How do trust and commitment link together for an ethics perspective? What arrangements constitute formal and informal mechanisms for shaping policy and action in how to identify an ethical dilemma and to respond to it?

Output and process: Deontology (duty and obligation); Justice theory (what is fair through a distributive or procedural process). •• Model of moral reasoning (Kohlberg’s levels of moral attainment ). •• Fraud (Cressey’s Fraud Triangle explaining fraud and its prevention). •• Corporate social responsibility (positions and opinions of organisations’ broader responsibility to society). National, local, workplace norms, practices and beliefs about what ‘the right thing’ is from a range of cultural perspectives.

(Turner and Müller, 2003; Klakegg et al., 2009; Müller, 2009; Turner, 2009; Lockwood, 2010; Müller, 2011; Müller et al., 2013) (Mattingly and Hall, 2008; Heugens and Lander, 2009; Bachmann and Inkpen, 2011; Morris and Geraldi, 2011; Scott, 2014)

(Kohlberg, 1971;1981; Ferrel et al., 1989) (Cressey, 1971; Wilson, 2004) (Sethi, 1975; Carroll, 1991; van Marrewijk, 2003; Dahlsrud, 2008; Osei-Tutu et al., 2010) (Schein, 1985; Hofstede, 1991; Trompenaars, 1993; Schein, 1996; Hofstede, 2001; Ashkanasy et al., 2002; Gupta et al., 2002; House et al., 2002; Trompenaars and Hampden-Turner, 2004; Cheung, 2006) (Meyer and Allen, 1991; Mayer et al., 1995; Lewicki et al., 1998)

(Hosmer, 1994b; 1994a; Lencioni, 2002; Dolphin, 2004; Soltani, 2014) (Carroll and Meeks, 1999) (Beauchamp and Bowie, 1983; Reidenbach and Robin, 1990; Knights and O’Leary, 2005; Godbold, 2008; Helgadóttir, 2008; Walker et al., 2008; Jónasson and Ingason, 2013b)

•• As a strategy – people’s values, society’s values and justification of what may constitute ‘the right thing’ to do. •• As a position – Moral, immoral and amoral behaviour (people’s acceptance level of the validity of a moral/ethical position). •• As a normative scales of ethics based on philosophical positions focussing on:

Concepts:

Outcomes: Virtue ethics: (doing what is right and virtuous, consistent with their character and motivations in pursuit of the greater good); Teleology (the ends or purpose – a focus on interest, egoism and utilitarianism, getting things done and getting a result); Relativism (what is acceptable and to whom and on what basis).

Literature examples

Rationale for taking an ethical perspective – literature that aids our understanding

Ethical dimension

Table 23.1  Ethical dimensions and their relevance

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by incentives that reward profit margins above all else (Soltani, 2014). Organisations become redundant when they fail to serve customers and beneficiaries of whatever product or service they deliver to customers or clients who are, after all, their prime stakeholders. If an organisation needs a purpose, and that purpose is to provide benefits to various stakeholders, then it needs to develop strategies that are in tune with the value system and value proposition of its clients and customers (Anderson et al., 2006). Taking an ethical perspective on how strategy is developed and adopted to be coherent with an organisation’s stakeholder values and ethical expectations becomes a key requirement (Hosmer, 1994b;1994a; Lencioni, 2002), especially to build or maintain reputation (Dolphin, 2004). Chapter 4 discusses the nature of value in more depth but it’s sufficient to say here that competitive advantage is concerned with developing and adhering to strategies that create value and benefit that consequently rewards organisations with business success. This has been emphasised by Porter, for example (Porter, 1985;1998; Porter and Kramer, 2011), who is a well-known researcher and writer on the strategic imperative of creating stakeholder value. Glazer et al., (2010) developed a model of boycott triggers and behaviours and argue that if stakeholders do not view an organisation as behaving ethically then they tend to boycott or avoid dealing with them. For an interesting essay on the nature and history of boycotts, readers may be interested in reading the paper by Radzik (2017) in which she discusses the types and purposes of boycotts at length. We see a theory of boycotts as a stakeholder response to unethical organisational behaviour being supported by several consumer action-group responses, and this phenomena has been reported upon many times, for example by Elkington (1997) in his seminal book on the triple bottom-line (3BL) concept. The 3BL concept concerns long-term sustainability, being related to organisations maintaining healthy financial ‘bottom-line’ profits while balancing social and physical environment ‘bottom-line’ performance. Clearly, ethics and strategy are linked. Carroll and Meeks (1999) differentiate between moral, immoral and amoral behaviour. In essence, moral behaviour is action taken that is consistent with the norms and standards espoused and accepted by a society. Immoral behaviour acts in a way that offends and contravenes those norms. People are usually aware when they are behaving in a moral or immoral manner. Being amoral pertains to having no norms or standards that govern behaviour. Implications of this concept to project delivery are twofold. First, if a project owner or project-delivery team believes that they do not have a moral obligation, or that they have no moral compass to guide their actions, then they will simply follow instructions regardless of the likely outcome. Second, being blind to the impact of project outcomes and the potential risk of pushback by stakeholders who may hold influence that is not readily apparent may have significant adverse consequences. Normative ethics scales are explained by several authors cited in Table 23.2, based on Helgadóttir (2008, p746) with the addition of our comments that are relevant to IPD alliancing. One motivation for choosing an alliance IPD approach, as detailed more fully in Chapter 1 of this book, is to effectively deal with a highly complex project context. Many of the IPD alliance projects share complexity of stakeholder expectation and engagement. Complexity is usually the result of dynamic situations in which an evolving or emerging set of changing circumstances makes it almost impossible to understand emerging patterns and predict with any accuracy an outcome (Snowden and Boone, 2007; Remington and Pollack, 2011). Complex projects have multiple stakeholders, often with conflicting needs and agendas. Some interact in transparent ways while others conceal their agenda and behave in an opaque manner. If we try to understand project-delivery decision-making and action from a stakeholder perspective then we may start to appreciate that various stakeholder groups may see these decisions and actions from contrary or compound ethical perspectives. 508

Always act in such a way that you, as a project team member, will be happy with yourself, your conduct and the project you are responsible for. Virtue comes in a number of forms. Always act in such a way that your actions as a project team member will lead to what is best for as many people as possible. Focus on getting on with delivering the project output and outcome. Always act in such a way that your actions as a project team member can become a universal law. Doing your duty to the expected professional level.

Virtue ethics: Focus on integrity, responsibility and accountability. Utilitarianism: Focus on value creation actions for the greater good. Deontology: Focus on achieving excellence by following rules and obligations. Justice ethics: Focus on what is fair through a distributive or procedural process.

Always act in such a way that your actions as a project team member are consistent with the context and respectful of others’ rights and duties.

Description

Theory

Table 23.2  Four theories of ethics and how they may apply to alliancing

The project-alliance agreement (PAA) has clear expectations for behaviours of alliance participants to be collaborative and have a best-for-project mindset. The selection process seeks professional excellence and high ethical standards. KRAs usually include community and environmental outcomes. Strong stakeholder engagement is aimed to give stakeholders a voice but not for highly vocal ones to dominate the discourse. Alliances have been found to deliver projects at or above performance-output expectations. The PAA prescribes clear KRA-governance expectations and a duty to perform transparently. Achieving or exceeding these delivers a moral outcome in terms of professional excellence. By following the PAA and the way that teams integrate and collaborate to follow both the written expectation as well as implied outcomes demonstrates an ethical approach. PAA clauses are worded very precisely in the language form of ‘we’ rather than ‘you’ to reinforce an integrated and collaborative approach. The PAA also makes clear which alliance behaviours are required and they include respectfulness, trust and commitment to the best-for-project outcome. It is also strong on governance arrangements.

Application to alliancing and IPD in general

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A project team may consider themselves as acting in a virtuous ethical manner because they are trying to be the ‘best’ project management professionals they can be by following a particular path that they believe to be ‘best practice’, for example by achieving ‘iron triangle’ time–cost– quality KRAs. However, many stakeholders may also perceive this to be a selfish and myopic view of project-output success. Project teams may be efficiently performing in terms of delivering what the project owner specified, and they may have made a sound or even generous profit margin for their services, but the outcome may be ineffective. Disgruntled stakeholders may see this result as serving the interests of a group they are not part of and they may not feel the result as legitimate. The ‘greater good’ utilitarian ethical goal will often leave those not included in ‘the greater’, i.e. the minority, most likely feel disenfranchised, disempowered and ignored. For this stakeholder segment, utilitarian and virtuous ethical considerations are simply neither relevant nor legitimate. Similarly, taking a somewhat rules-based or bureaucratic approach, a deontological ethical approach has its limitations. Alliance project teams that diligently adhere to the PAA generally understand that rules can never cover every situation. The PAA culture enables debate to abide by the spirit of an alliance as well as trying to acknowledge and respect the written rules. Rigid by-the-book or even minimalistic deviations from ‘the rules’ invite discontent from stakeholders whose circumstances and contexts fall outside those that are considered when policy is translated into rules. The integrated nature of IPD allows varying interpretations of rules and their applicability to be debated and so the PAA can be a more valuable guide for teams than traditional contracts: having the owner participant (OP) as an alliance-team member helps to clarify issues relating to interpretations of a best-for-project outcome. A justice, or rights, ethical-theory approach to alliancing differentiates between what is legal, what rules prescribe, and what is fair and reasonable given the context. It explores how decisions and actions are made in terms of considerations about what natural or bestowed rights various stakeholders possess or even believe they possess (Jónasson and Ingason, 2013a). This may mean that, to be just and respect the rights of others, much more effort and energy needs to be expended in project work by considering the impact on both internal and external project groups. Public-sector infrastructure projects, for example, have an added layer of stakeholder complexity that may mean that the project-delivery system needs to accommodate a mechanism in which the perspectives, values and aspirations of a wide stakeholder group are taken into account. This may be contrasted with a traditional delivery approach in which an infrastructure need is narrowly identified by a client, a client-briefing stage takes place to design the facility, and then it is tendered and delivered in a disjointed and fragmented way. Unintended consequences may flow from a traditional approach. The design phase may or may not adequately observe justice or rights because the ‘rules’ fail to accommodate the ‘luxury’ of considering the interests of stakeholders other than ‘the client’. The project-delivery team may consequentially suffer the wrath of a stakeholder segment that believes that their rights are being violated and that actions are unjust. Teo and Loosemore (2010) provide a salient example of a development stalled for many years by a protest group that believed that the treatment of Aboriginal remains and ecological and heritage considerations were dismissed and ignored on a coastal housing development project. The project was crippled because the protest group maintained their anger and vigilance over several years. All parties suffered. Their case study could be viewed through a legal, stakeholder or ethical theoretical lens. IPD and alliancing for politically (stakeholder-influenced) public-sector infrastructure projects has the mechanisms to better deal with considering a broad range of project-participant

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(and external participant) groups than do traditional project-delivery forms. The project-owner participant (OP) and non-owner participants (NOPs) – for example the design team and delivery team and the facility operational management team – can bring valuable experience and perspectives on what a successful project output and outcome may look like. For projects that address complex stakeholder group-benefit realisation, a wide-ranging view of what is ethical is necessary so that the relevant and salient ethical questions are raised, considered and addressed. Frequently, the outcome of this ethical ‘navel-gazing’ may be seen as wasteful because the problems faced are wicked problems. Clearly, considering what may be an ethical approach to project delivery is somewhat of a minefield but the reality of project work is that a project’s raison d’ėtre is to deliver value and benefit and the underlying issue is: value to whom? (This is addressed in Chapter 4.) The approach in delivering a project must therefore take cognisance of the ethical dimensions and balance the four ethical perspectives outlined above.

Models and explanations Why would we need ethical models or frameworks to guide us in undertaking project work? One reason is that, in everyday work, project-delivery teams face ethical issues of one sort or another. Ferrell, Fraedrich and Ferrell (2002) classified ethical business issues into four key areas: conflicts of interest; honesty and fairness; communications; and relationships within (and between) the organisations. A guide, template or means to understand the nature of the issues faced provides a first step in coping with ethical issues and avoiding unintended negative consequences. Kohlberg (1971;1981) developed a useful model to assess an individual or group’s level of moral reasoning: the basis on which they make decisions, behave and act. Observing people and how they deal with ethical issues is useful when making assessments about whether project participants are acting ethically or whether IPD projects are inherently more likely to be delivered in accordance with relevant stakeholders as compared to more traditional project-delivery forms. According to Kohlberg (1971;1981), people perceive the merits of appropriate ethical action or behaviour about ethical issues or challenges differently, depending upon their stage of cognitive moral development. He proposed a six-stage model of progressively more sophisticated moral cognitive, moral developmental evolution. These stages may be grouped together to form three levels: pre-conventional, conventional and post-conventional. Those at higher stages of moral development tend to consider things beyond their own benefit when faced with an ethical issue. At each stage they comprehend the basis for reasoning below them but not any more than one stage above their own (French and Granrose, 1995). This explains why, within organisations, individuals may reach different decisions concerning the same action or circumstances if they are not governed by specific guidelines or decision criteria. Kohlberg suggests that people gain moral or ethical maturity by confronting a dilemma or issue that they cannot resolve or explain, or which contradicts their current level of reasoning. The levels are described and explained in Table 23.3. Table 23.3 suggests that Kohlberg’s approach is not merely about understanding the ethics-inaction process. In fact, people operating at different levels may make the same decision or take the same action but for different reasons. This concept explains how they came to make their decision and helps explain how they see the world and the critical factors influencing their decisions (French and Granrose, 1995). Commercially focussed projects generally concentrate on the project owner

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Relevance to IPD alliancing

The incentivisation element of alliances might be seen to fit this level of ethical maturity. Also the best-for-project mantra may also be seen as automatic adherence to rules. However, the evidence from numerous alliancing research studies suggests that alliance teams are highly relational and that the incentive scheme is of secondary not primary motivational concern. People engaged in IPD, and alliancing in particular, perceive collaboration as being of central importance. The lack of power and information asymmetries leads to collaboration by dialogue where perception and ideas are shared to find a best solution rather than trading favours or pressing for a particular agenda or position.

Stage 3 – People want to be accepted by a group and they value the importance of group interaction. Group norms and standards and acceptance of actions by that group or group leader provide the main guidance for action. Trust and loyalty are paramount. People seek group acceptance and validation and believe in the primacy of group norms. Stage 4 – People’s perspective broadens beyond the group to community decisions based on agreed protocols designed to promote the common good. People have a broader perspective than their expanded groupboundary loyalty to define a wider societal group. However, this wider group still has boundaries. This might explain why some jurisdictions will take a decision that advances their own position but to the detriment of another wider jurisdiction: for example, on state-versus-federal issues.

This stage of stakeholder engagement reveals paradoxes that were previously unrecognised. This could be where the IPD approach, particularly alliancing on public-sector infrastructure, takes a broad perspective because the concept of project success encompasses the end user, operator and stakeholders who are engaged in project delivery. You only have to look at the KRAs, for example, on alliance projects or other forms of IPD, such as the Crossrail project in London or hospital projects by Sutter Health in the USA, to appreciate that ethics is about meeting the legitimate needs of a wide group of stakeholders. Defining the legitimate need is a complex process that involves ethical reasoning about the ‘best value’ approach to project delivery.

This is certainly true for IPD alliances in that there is a culture of consensus decision-making and a no-litigation clause in the PAA, so this reinforces the ‘alliance norms’ as a gold standard. This has advantages in that consensus does not mean submitting to the majority but raising concerns and arguing positions. Consensus through dialogue means arguing to understand the logic, rationale and rectitude of planned action. However, without vigilance there is always a danger of consensus leading to mediocrity, laziness and misguided action.

Level 2 – Conventional: The importance of community to society is recognised, together with the individual’s role, obligations and expectations for all to follow group norms. This underscores the importance of leaders and supervisors to influence employees’ behaviour and become role models. According to Ferrell et al. (2015), this is the level that most people operate at, by adhering to the norms and mores of their group within an organisation to satisfy their sense of belonging.

Stage 1 – Rewards, punishments and favours largely determine whether an action is judged as ethically or morally acceptable. People unquestioningly follow laws and rules on a highly transactional basis. Stage 2 – Recognition emerges that people need to collaborate to attain their goals. However, self-interest motivations largely prevail through reciprocity of favours and feelings of being obliged to repay a debt.

Level 1 – Pre-conventional: Making decisions is based on self-interest mitigated by rewards and punishment and externally imposed rules, laws or policies.

Stage/level - characterised by

Table 23.3  Kohlberg’s moral/ethical reasoning stages and levels applied to IPD

Stage 6 – People have moved to a higher level in which the notion of universal laws and principles are applied.

Stage 5 – People regard rules and laws as important as a social contract, cohesion measure, (see Chapter 13 for more details). However, they are prepared to change laws for unusual social purposes. In addition, people consider the concept of moral law – that which exists beyond the written law – as contributing toward societal well-being.

IPD alliancing fits into this framework model. Projects in the public sector strategically consider a wider set of core stakeholder objectives. The example discussed later in this chapter, about a water utility sector project (Melbourne Water, 2014), demonstrates that, particularly, public-sector infrastructure projects are perceived as delivering value if they not only restore a previous utility value (such as the delivery of water) but also to enhance this delivery outcome. For example, by ensuring that environmental issues are addressed and that a positive social impact by those affected by the project are also met through providing benefits that compensate them for disruption and inconvenience. IPD infrastructure alliances are highly focussed on societal outcomes. Empirical evidence from interviews with over 100 alliance practitioners across North America, Europe and Australia supports the view that alliance project teams are focussed on wide, societalbenefit outcomes. Walker and Lloyd-Walker, 2015; Walker et al., 2015; and Walker, 2016 confirm that alliance and similarly motivated projects have success criteria based upon more general society benefits for projects.

Level 3 – Post-conventional or Principled level. People go beyond self-interest or referent groups to make their own decisions based on principled notions consistent with justice and rights.

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and the shareholders of organisations delivering those projects as the most relevant stakeholders. Therefore, the main performance objectives for delivery are tangible project outcomes that suit the project owner’s concepts of what value for money means. Public infrastructure projects may be seen as having more complex concepts of best value than of value for money (MacDonald et al., 2012). Table 23.3 suggests that IPD projects engage people who are more cognitively engaged in stakeholder expectations than may be the case for traditional project-delivery approaches. A second model that is useful in addressing ethics in project delivery is one concerned with investigating how and why corruption and collusion occurs and how they may impact upon perceptions of ethical project delivery. This model is the Cressey corruption model (Cressey, 1971). Cressey observed that there are three preconditions to unethical and corrupt practice. First, there must be an opportunity to be corrupt. A situation or context must exist that allows the opportunity for corruption to take place: for example lax or ineffective governance arrangements. Second, there must be a pressure or motivation to be corrupt. This pressure may be due to systemic practices such as people being paying such low wages that it is impossible to survive. There may be a host of other factors relating to the organisational culture that either hides misdemeanours or actively suppresses shining a light on potentially corrupt triggers and practices. Corruption may also be due to greed for profits or for individuals being financially compromised. The third precondition is a rationale for being corrupt. This may be a driving need, such as funding nefarious activities like gambling, or being blackmailed with the threatened exposure of a compromising situation, or a culture that supports or turns a blind eye to petty or major corrupt practices. Rationalisation may also result from a genuine belief that a utilitarian ‘great good’ is being served in some way. According to Cressey, all three conditions must be met for corruption to occur. Osei-Tutu et al. (2010) provide an example in an African context that explains how corruption can occur. There are many other examples in which the Cressey Triangle (Figure 23.1) may be used to make sense of a situation. Strong and clear cultures that are created with alliances mitigate the potential for corruption together with stringent probity oversight and clear governance of alliances. Figure 23.1 illustrates the Cressey Triangle model as it may apply to deterring corrupt practice. The opportunity for corruption and other unethical behaviour is minimised through openbook transparency and high levels of probity oversight in alliances and other IPD forms. Any pressure to be corrupt or unethical is relieved by the alliance protocol and PAA measures relating to consensus decision-making, so that all parties to a decision would have to feel the same pressure to be corrupt or unethical for that pressure to be realised. In alliancing, no one team member or group can unilaterally take action that may prove to be corrupt or unethical. The rationalisation for corruption or unethical behaviour and action cannot be supported in IPD projects, particularly alliances, because the culture and governance system is focussed on a best-for-project outcome. Consensus is based on open dialogue and multiple perspective-taking. Individuals would not be able to find support for greed and corruption because corrupt or unethical behaviour would stand out as abnormal in an alliance and be challenged as being totally outside alliance group norms. Corporate Social Responsibility (CSR) is an area of emerging interest in both general management and PM literature (van Marrewijk, 2003; Pedersen and Neergaard, 2008; Melbourne Water, 2014). According to Matten and Moon (2008, p405), ‘At the core of CSR is the idea that it reflects the social imperatives and the social consequences of business success’. Thus, CSR (and its synonyms) empirically consists of clearly articulated and communicated policies and practices of corporations that reflect business responsibility for some of the ‘wider societal good’. We see this public-good focus apparent in many public-sector infrastructure delivery projects. One aspect of CSR that is particularly relevant is that, for public-sector infrastructure projects, there is an aspiration that the teams that deliver infrastructure projects will do so in a 514

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Open-book transparency, probity governance oversight

One-team united collaboration, consensus decision making Pressure or motivation

Opportunity

Rationalisation Best-for-project Figure 23.1  The Cressey Triangle and project alliancing

way that meets the public good, beyond just delivering an output that is useful, but an outcome that prepares for the future and provides benefit to a wide, legitimate group of stakeholders (Victorian Auditor-General’s Office, 2010; Victorian State Government, 2017). CRS embraces 3BL aspects of social and environmental benefit.

Culture and ethics Chapter 10 discusses culture in depth, so in this chapter we briefly refer to it as it applies to an organisational culture that supports ethical treatment of project stakeholders, both proximal – such as the project-delivery participants and those that they interact with on a daily basis – as well as distal stakeholders, such as the end-users of a facility, and society in general. The norms established and maintained through IPD and alliance agreements in particular, clearly articulate values consistent with virtue ethics as well as justice ethics. Utilitarian ethics, in which benefit for the greater good is sought, and deontological ethics, where there is a focus on obligations and following rules, both link to a culture of responsibility and accountability. Alliances and IPD strongly focus on creating and maintaining a group culture that is ethical from several perspectives. Many of the behavioural elements in the Collaborative Framework (discussed in Chapter 2) are based on creating an ethical workplace culture.

Trust and ethics Table 23.1 includes trust and ethics as an important ethical dimension. Chapter 13 discusses trust and the trust and commitment model (Figure 13.1) presented in that chapter shows integrity as a core element and precondition to trust. When we consider how people develop trust we see that their behaviours and actions need to be trustworthy. Integrity fits in with virtue ethics as well as virtue ethics where project-delivery participants try to do their professional best in their work and consciously support and uphold PAA values. Ethics theory supports the trust model presented in Chapter 13 in Table 13.1 for ability (using a virtual and utilitarian ethics perspective), integrity (a deontology and justice-ethics perspective) and benevolence (deontology).

Governance and ethics Müller (2011, p320) describes a four-cell matrix governance paradigm with a control-focus axis described by outcome-to-behaviour cells and a dominant-influence axis described by 515

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shareholder and stakeholder. Alliancing and other IPD forms have a stakeholder focus, as is explained in great detail in Chapter 19 of this book. A key message about governance for this chapter relates to the mentality of governmentality, the ways of rationalising and understanding governance provisions (Müller, 2017). This is highly supportive of ethics in general and taking a deontological as well as a justice-ethics perspective. Lockwood (2010) proposed a good-governance framework as a guide to working within terrestrial protected areas. His seven-principle framework included legitimacy, inclusiveness, connectivity, resilience, accountability, transparency, and fairness. These principles link to the four ethical perspectives presented in Table 23.2, particularly so for justice ethics.

Institutional theory and ethics Finally, Table 23.1 references institutional theory and the way that rules, laws, decision-making and action may be seen from the perspective of taking an ethical position. We argue that projects may be considered as institutions in a similar way that hospitals, schools, and legal systems may be considered as being institutional. PAAs provide a framework that is established and respected by those engaged in an alliance in the same way that people within a school or hospital system expect a particular way in which work is done. Scott (2014) identifies what he describes as three ‘pillars’ of institutionalisation. The first pillar is the rules and regulations that govern thought and action. In this case, the PAA provides a regulatory framework pillar of the project as a temporary institution. The second pillar is the norms of those engaged in the institution. In this case, the alliance-participant selection process and the PAA provisions again set the norms and tone of thought and behaviour. The third pillar is cultural-cognitive: the way that people interpret the regulatory pillars given their cultural norms. The above discussion of ethical dimensions sets the tone of how people interpret the institution of an alliance or other IPD form. We have answered question two, through the above discussion of Table 23.1. Taking a wide interpretation of an ethical perspective has been useful to better understand the depth of complexity of what motivates alliance participants to perceive their role and actions through an ethical-theory lens. We suggest that alliancing is a valid and appropriate example of IPD to use to explore the project-delivery ethics perspective in which a wider, rather than a narrower, set of stakeholder expectations are considered and met.

Taking an ethical perspective on the IPD choice We use a real-world alliance case history example to answer question two: What characteristics of alliancing, taken as an example of an IPD approach, are best examined from an ethical perspective to make sense of an IPD form choice? The case history example is the Sugarloaf North-South water pipeline project.

Sugarloaf North-South water pipeline: background context The state of Victoria, Australia, was subjected to a severe drought between 1996 and 2010 (National Climate Centre, 2010) that was the worst in over 100 years. The city of Melbourne’s population reached 4.4 million in 2015 and in March 2015 the state of Victoria had a population of 6.1 million (ABS, 2016). By 2007, the water levels in all reservoirs servicing greater Melbourne were running dangerously low, triggering the need for urgent action. The prolonged drought severely affected the Melbourne metropolitan area, major regional cities and towns, and the farming community, thus threatening agricultural production. 516

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In 2011, the Victorian State Ombudsman released the results of an inquiry into the water initiatives commenced under the former state government. A plan to divert water from the Sugarloaf reservoir to the city of Melbourne was among the recommendations made because of concerns that the city could run out of water (Victorian Ombudsman, 2011, p5). The dilemma faced by those considering action was that residents of greater Melbourne, and commerce and industry within all regions of the state, including the food producing GoulburnMurray region, were being severely and chronically affected by the drought. Diverting water from the regional community and its supply to the rural agricultural sector in order to maintain supply to the greater city of Melbourne and its supporting industry posed a classic ‘rob Peter to pay Paul’ ethical dilemma. From the outset, this source of water was only to be used in periods of extreme need. The water plan also included modernising the irrigation system that served the agricultural activities of the Goulburn-Murray region, to support continued food production. This would be done through initiatives to reduce leakage and evaporation, and to introduce new methods to better control the supply of water according to need. It was suggested that these savings would compensate for any water delivered to the Sugarloaf reservoir via the North-South pipeline, so that agricultural activities would not be adversely affected. However, as the Ombudsman’s report, newspaper articles, and articles from a range of other sources acknowledged, methods for estimating water savings were not totally reliable. There remained considerable scepticism (Victorian Ombudsman, 2011), especially among food producers dependent on water for their livelihood. For them, the potential loss of water from their region as a result of the construction of the North-South pipeline was the only sure result of the plan. The pipeline also crossed state-reserved parkland and part of Victoria’s iconic winegrowing region. Its construction posed a threat to vineyard owners by construction crews and their equipment potentially spreading grape-crop diseases. The threat was considered real by winegrowers because a devastating grape-crop blight shut down the winemaking industry early in the last century for many decades. Despite early criticisms and threats of protest, over time, as the range of water projects has been delivered across the state, some success has been achieved, and some farmers are acknowledging the benefits of more efficient and effective methods by which water is being transported via the Goulburn-Murray irrigation system (Goldsmith, 2015). The project was delivered as an alliance because it was highly complex at a number of levels. It was technically complex because it required logistics of building a pipeline across numerous vineyards while ensuring that machines and workers maintained quarantine conditions to avoid the potential of spreading plant disease. Its principal complexity could be seen from a stakeholder-engagement perspective. The alliance team was tasked with ensuring that food and wine producers were not disadvantaged, that minimal damage would be incurred from works undertaken in forest and parkland areas, that endangered species were not further threatened and that local communities along the pipeline route were not adversely impacted to any reasonable extent. A key reason why the project was judged a success was in part due to excellent alliance leadership. The alliance manager for the project was interviewed in an alliance study on excellence in alliance leadership (Walker and Lloyd-Walker, 2011b) and he confirmed that a considerable, indeed a major, effort was made to plan for not only technical risks but for environmental and stakeholder risks. Planning and taking action in a proactive way to consider the concerns of stakeholders as an ethical dilemma that had to be resolved was of foremost concern. The alliance-delivery form enabled an IPD approach so that multiple perspectives could be drawn upon. This ensured that participants had the opportunity to engage and participate in the solution of dilemmas. The alliance team was acutely aware of the sensitivities and risks involved in 517

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the project and so were able to carry out their plans in a coordinated and thoughtful manner as a unified team with well-understood objectives. KRAs and key performance indicators (KPIs) used to monitor and control performance included ways to measure ethical performance and were clear and well defined to form a central focus for action. The alliance project was judged as being highly successful from a project-delivery perspective as well as having satisfied a wide range of social and environmental KRAs (Smith et al., 2010). Readers who may be interested in this case study can read more about it in detail. The book by Smith et al. (2010) provides a great deal of context and detail, including photographs and stories about workers engaged in the project, and a book chapter by Lloyd-Walker and Walker (2017) provides detailed analysis of the ethical dilemma.

Sugarloaf North-South water pipeline ethical issues and analysis Considering this case study from a four-theories-of-ethics perspective we can conclude the following as illustrated in Table 23.4. It becomes clear from the available evidence surrounding this case study (government reports, newspaper articles, interviews that the authors also undertook) that there was a specific ethics strategy deployed and that those that shaped and delivered the project had moral and ethical standards that they wished to adhere to. The level of moral reasoning appears consistent with Kohlberg’s Level 5 or 6 (Kohlberg, 1971). The alliancing arrangements made fraud unlikely as none of the three factors in the Cressey Triangle (Cressey, 1971; Cressey and Moore, 1983): opportunity, pressure and rationalisation, could be mobilised to enable fraud to be perpetrated. The KRAs demonstrate high levels of corporate social responsibility. The alliance workplace culture and the trust-building mechanisms in the PAA, such as open-book transparency, a noblame culture, consensus decision-making and the governance arrangements all point to an ethical approach to delivering the project. Lockwood’s (2010) good-governance framework appears to have guided the project-delivery approach. For example, it placed high levels of concern and energy into ensuring the project aim’s was perceived as legitimate in the eyes of its many stakeholders. The PAA and its implementation ensured inclusiveness, connectivity, resilience, accountability, transparency, and fairness both within the alliance between project participants and project-external stakeholders. The book by Smith et al. (2010) has clear examples and illustrative stories to support this assertion. The Sugarloaf Alliance was deemed a success using traditional measures of time and cost, and the project outcome was fit for purpose if and when required in times of drought (Smith et al., 2010). Importantly, though, it is the view of those whose comments and criticisms led to the project being considered ‘controversial’ that is important. Despite some early owner resistance to providing access to their land to enable laying of the pipes, access was denied by only two of the 85 landowners. It was also claimed that by the end of the project, positive feedback had been received from some groups who were originally very negative toward the project (Smith et al., 2010). This case study provides a specific example of how the IPD approach, and in particular an alliance, may be examined through an ethical lens to explain the rationale for using such an approach.

Implication for taking an ethical perspective on the IPD choice In the above discussion we have partially answered question three posed in the introduction: What implications does taking an ethical perspective have on the way that projects are led, and how project output and outcome performance might be judged? 518

The extent of planning for ethical issues was indicative of this perspective because it was so comprehensive and professionally undertaken. For example, the character of alliance participants demonstrated virtues of temperance, in that they had to balance the urgency of delivering the pipeline to alleviate the impact of drought while not proceeding in haste to the detriment of stakeholders in the path of the pipeline and others who may have affected by its construction. In terms of the virtue of cleanliness, the work crews ensured that they cleaned their footwear and machines when moving from one property to another to avoid spreading any crop disease or bacteria. Justice was served by close engagement with stakeholders with competing interests to ensure that all perspectives were considered and appropriate action negotiated and undertaken. The project also demonstrated the virtue of charity when trees were needed to be removed to allow clearing for the pipeline construction and they were cut up and left for local residents to use for firewood. The trees were not suitable to be used for building materials and would otherwise have been disposed in landfill. During the construction of the pipeline, the ‘Black Saturday’ bushfire of February 7th 2009 occurred, killing 173 people and injuring a further 414 people. Details can be found on URL https://en.wikipedia.org/wiki/Black_Saturday_bushfires, citing numerous references. Workers on the alliance downed tools to help fight the fires and to help victims. The alliance also had several KRAs relating to supporting local schools and sports clubs to help convince those stakeholders affected by the construction that they were compensated in kind through community support. While this may be perceived as a form of bribery it can also be seen as a virtuous way (charity and humility) to ameliorate any suffering or disadvantages caused by any disruption due to the works. Utilitarianism is understood as delivering the best outcome for the ‘greater good’. The pipeline’s raison d’être was, in part, to secure water resources to maintain life and industry for the greater Melbourne population, which at 4.4 million comprises the majority of the state’s 6.1 million people. Another aspect of the project’s outcome was to deliver enhanced water-management facilities to food producers and the wineries. Thus, rural populations were also expected to benefit. The project-alliance delivery mode also fitted in with this utilitarian aim. It used a project-delivery method in which the KRAs and contractual conditions ensured that work commenced at an optimal pace while the alliance arrangements ensured that performance was measured against a wider stakeholder-value proposition than might be the case if a purely traditional, commercial project-delivery method was adopted. Duty ethics is concerned with the adherence to law, rules and respect for authority. The PAA is not an easy option but places considerable onus on parties to act with integrity and respect for stakeholders and colleagues. The PAA is clear about the close integration of the owner and other alliance participants, with a clear sense of interdependence and unity of purpose. Thus duty, obligation and authentic action are key features of an alliance and in congruence with deontological ethic principles. Justice, or rights, ethics is focussed on respect for the rights of others and the validity of people holding a particular position to see events and project outcomes in a way that is meaningful to them. It is also focussed on due process and being fair and reasonable. Alliancing principles mirror these aspirations (Ross, 2003; Department of Infrastructure and Transport, 2011) and the ambience of an alliance has been reported upon as showing considerable collaboration in a highly respectful manner (Walker and Lloyd-Walker, 2014). The Sugarloaf North-South pipeline project demonstrates a justice-ethics approach by the care taken to ensure that the many stakeholders were given a voice and were genuinely involved so that due process and considerations could be made. As outlined in Smith et al. (2010), the alliance team included environmental and social stakeholder-engagement specialists to ensure that even those elements without a voice – endangered species and the environment – were able to influence the way the project proceeded.

Virtue ethics

Justice ethics

Deontological ethics

Utilitarian ethics

Sugarloaf North-South water pipeline analysis

Ethical theory

Table 23.4  Sugarloaf North-South water pipeline ethical issues

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We return the reader’s attention to the quote taken from IV-10 in the introduction. He stressed the importance of ensuring that those engaged in an alliance understood the purpose of the project, the purpose of undertaking it using the alliancing approach and what the PAA stipulates in terms of behavioural expectations. This quote highlights the need for authentic leadership in which words and actions are consistent. Lloyd-Walker and Walker (2011) explain that authentic leadership in alliances embraces a number of characteristics that they describe as being part of the VAT platform, values affective trust. Values need to include shared and agreed understanding of how to behave. Affective commitment refers to the ‘wanting to’ level of being committed beyond a duty-and-compliance transaction (Meyer and Allen, 1991; Meyer and Herscovitch, 2001). Trust has been discussed in this chapter as being a fundamental element of ethical human interaction. The main implications for taking an ethical perspective on IPD alliancing, to understand what qualities alliance participants need to exhibit and abide by, are summarised as follows: ••

•• •• •• •• ••

The project brief for social infrastructure projects usually requires consideration of multiple stakeholders, often with conflicting objectives. This requires a balanced approach to exploring and rationalising the benefit or need and how it will be met by perhaps using, for example, a virtue and justice-ethics perspective. No single ethics perspective is likely to be useful for understanding a preferred delivery approach for complex projects made complex by human factors. High levels of transparency and accountability mitigate the risk of corruption and unethical conduct. Ethical conduct forms a platform on which trust may thrive and, through trust, improved collaborative behaviours are likely. Ethics and ethical standards form an important pillar of institutionalisation with which project participants can make sense of governance and governmentality. Taking an ethical perspective is an important element of the cultural-cognitive pillar identified by Scott (2014). Project-alliance participants are unlikely to come to a project with finely-honed knowledge, skills, attributes and experience (KSAE) to fully engage in ethically grounded project design and delivery work (Walker and Lloyd-Walker, 2011a). There need to be learning and development facilities and resources to help them gain these KSAEs. The PAA usually has provisions and guidelines on how mentoring, coaching and reflection on action can help to develop these KSAEs and to develop an ethical perspective on what the project work entails.

Conclusions This chapter focussed on ethics and, more specifically, an ethical perspective on IPD and alliancing. We first introduced the complexity of many public-sector infrastructure projects, particularly recent megaprojects in the UK and other substantial projects elsewhere in the world. That prompted three questions to frame the chapter by addressing each of these in turn. We also introduced the reader to a quote from one of our research studies that resonated throughout the chapter. The value of taking an ethics perspective and its relevance and links to other chapters in this book has been made explicit so that readers who are interested in expanding their understanding of the fit may do so. We did not go into the theory of ethics from a PM perspective in great depth because there are other resources that do so more comprehensively than is practicable in this chapter. We recommend the book by Jónasson and Ingason (2013b) because it is recent, very well written and has some useful vignettes and case-study exercises. We also recommend readers to follow up on several of the sources cited in this chapter and listed in the reference section below. 520

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Beverley Lloyd-Walker and Derek Walker Radzik, L. (2017). “Boycotts and the social enforcement of justice.” Social Philosophy and Policy. 34 (1): 102–122. Reidenbach, R. E. and Robin, D. P. (1990). “Toward the development of a multidimensional scale for improving evaluations of business ethics.” Journal of Business Ethics. 9 (8): 639–654. Remington, K. and Pollack, J. (2011). Tools for Complex Projects. Aspects of complexity: managing projects in a complex world. Cooke-Davies T., L. Crawford, J. R. Patton, C. H. Stevens and T. M. Williams. Newtown Square, PA, Project Management Institute: 29–40. Ridings, C. M., Gefen, D. and Arinze, B. (2002). “Some antecedents and effects of trust in virtual communities.” The Journal of Strategic Information Systems. 11 (3–4): 271–295. Rittel, H. W. J. and Webber, M. M. (1973). “Dilemmas in a general theory of planning.” Policy Sciences. 4 (2): 155–169. Robbins, S. P. and Mukerji, D. (1990). Managing organisations: new challenges & perspectives, New York; Sydney, Prentice Hall. Ross, J. (2003). Introduction to Project Alliancing. Alliance Contracting Conference, Sydney, 30 April 2003, Project Control International Pty Ltd: 43pp. Schein, E. H. (1985). Organisational culture and leadership, San Francisco, CA, Jossey Bass. Schein, E. H. (1996). “Three cultures of management: the key to organizational learning.” Sloan Management Review. 38 (1): 9–20. Scott, W. R. (2014). Institutions and organizations, Thousand Oaks, CA; London, SAGE Publications Inc. Sethi, S. P. (1975). “Dimensions of corporate social performance: an analytical framework.” California Management Review. 17 (3): 58–64. Smith, S., Anglin, T. and Harrisson, K. (2010). Sugarloaf Pipeline A Pipe in Time, Melbourne, Sugarloaf Pipeline Alliance, Melbourne Water. Snowden, D. J. and Boone, M. E. (2007). “A leader’s framework for decision making.” Harvard Business Review. 85 (11): 69–76. Soltani, B. (2014). “The anatomy of corporate fraud: a comparative analysis of high profile american and european corporate scandals.” Journal of Business Ethics. 120 (2): 251–274. Teo, M. M. M. and Loosemore, M. (2010). “Community-based protest against construction projects: the social determinants of protest movement continuity.” International Journal of Managing Projects in Business. 3 (2): 216–235. Trompenaars, F. (1993). Riding the waves of culture: understanding cultural diversity in business, London, Economics Books. Trompenaars, F. and Hampden-Turner, C. (2004). Managing people: across cultures, Chichester, UK, Capstone. Turner, J. R. (2007). Gower handbook of project management, Aldershot, UK, Gower Publishing Company. Turner, J. R. (2009). The handbook of project-based management: leading strategic change in organizations, New York, McGraw-Hill. Turner, J. R. and Müller, R. (2003). “On the nature of the project as a temporary organization.” International Journal of Project Management. 21 (3): 1–8. van Marrewijk, M. (2003). “Concepts and definitions of CSR and corporate sustainability: between agency and communion.” Journal of Business Ethics. 44 (2): 95–105. Velasquez, M. G. (1998). Business ethics concepts and cases, Upper Saddle River, NJ, Prentice Hall. Victorian Auditor-General’s Office (2010). Management of Major Rail Projects, Melbourne: 46pp. Victorian Ombudsman (2011). Investigation into the Foodbowl Modernisation Project and Related Matters. Victoria O. Melbourne, Victorian Government: 150. Victorian State Government (2017). Level Crossing Removal Project – Program Business Case, business case. Melbourne, Victorian Government: 287pp. Walker, D. and Lloyd-Walker, B. M. (2014a). “Client-side project management capabilities: dealing with ethical dilemmas.” International Journal of Managing Projects in Business. 7 (4): 566–589. Walker, D. H. T. (2016). Understanding the Alliance Target Outturn Cost Process and its Implications, Melbourne, Australia, Centre for Integrated Project Solutions, School of Property, Construction and Project Management, RMIT University: 77pp. Walker, D. H. T. and Lloyd-Walker, B. M. (2011a). Profiling Professional Excellence in Alliance Management Volume One – Findings and results, Sydney, Alliancing Association of Australasia: 76pp. Walker, D. H. T. and Lloyd-Walker, B. M. (2011b). Profiling Professional Excellence in Alliance Management Volume Two – Appendices, Sydney, Alliancing Association of Australasia: 98pp.

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24 DESIGN AND CONSTRUCTION FOR OPERABILITY Brian Atkin and Steve Rowlinson

Introduction Management of the constructed facility has often been an afterthought among the professions and disciplines in the real estate and construction industries. Consequently, too many facilities fail to meet their operational requirements to the full. The nature of integrated project delivery (IPD) is such that all professions and disciplines must be involved in the early stages of the project life-cycle and this must, therefore, include those with responsibility for operating and maintaining the facility. A number of key questions need to be answered in readiness for the operation and use of the facility. The first question is: how do we plan effectively for operability and maintainability of the facility? The second is: how do we manage the functionality and operational performance requirements of the facility in a digital form? Last, what is the scope and level of aftercare required by the owner and operator of the facility during operation and use? Answers to the questions will better inform design decision-making and the efficiency of construction. The concept of constructability is nowadays widely practised and recognised as contributing to improved project delivery, fewer defects and less rework (Saghatforoush, 2014). The concept of operability – the impact of design and construction on the operation and use, including maintenance, of a facility – is less recognised despite its routine implementation elsewhere, notably in the aerospace and automotive industries1. A lack of design and construction for operability presents an obstacle to the delivery of facilities to their required quality and performance (Saghatforoush, 2014). For facility owners and operators, certainty of start up and steady-state operation and use – with no unacceptable or unexplainable gap between planned and actual performance – is an entirely reasonable expectation. The importance of operability is easily highlighted when insufficient attention has been paid to it. Loss of functionality and/or production in the facility’s operation and use are evidence of failure to ensure that design and construction supports operability. Compelling examples exist in healthcare and transportation, where projects can be notoriously late, over budget and beset with operational problems (Flyvbjerg, 2014). Design and construction for operability is not a single, self-standing concept but a combination of several interrelated concepts and principles. Among them is the early involvement of the operator or facility manager in defining operational requirements and expected performance outcomes. Another is the employment of an integrated 526

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design-and-construction team as this offers benefits in coordinating design and problem-solving, as well as consideration of constructability and operability impacts. A related concept is extending the commitment of the team – hereafter, the delivery team – to defined periods of aftercare during operation and use. The practical measures incorporated into design and construction for operability include soft landings (UBT/BSRIA, 2014), briefing, information management (primarily building information modelling) and performance evaluation ex ante and ex post handover of a facility. A unified, stage-gated plan of work for delivery that embeds these measures is necessary and is to be found in codes of practice (BSI, 2015; BSI, 2016) recommended by the UK government for adoption on new-build and refurbishment projects. This chapter examines the benefits and implications of a greater focus on operability arising from changes to the process for delivering and operating a facility. Two principal issues are addressed here: first, the often-disjointed relationship between the process for delivering the facility (i.e. project management) and its operation and use (i.e. facilities management); and second, a more efficient role for information management – incorporating Level 2 building information modelling2 – as an embedded set of coordinated procedures and practices: in plain language, the glue that holds everything together. This chapter links to others within this book in relation to the numerous references to alliancing where the facility operator is included in an integrated project delivery (IPD) team and may have a substantial team of operator-staff specialists working as part of the integrated alliance team. For example, in Chapter 17 we discuss the Australian Victorian government’s level-crossing removal program (LXRP) of 11 alliance projects in which the system operators of the facility (both the VicRoads road authority and the rail operators) played a significant and constructive role in the overall project alliance team. Other chapters refer to the LXRP and the significance of the facility operator’s perspective and input into the design and construction of the facility. Greater emphasis is placed in this chapter on the integration of the operator’s perspective and potential contribution to effective project outcomes within the IPD context of integration and collaboration in public–private partnerships (PPP). As explained in other chapters, the operator can play a significant role in an alliance context such as that cited in relation to the LXRP. Rather than repeat that message and example we leave readers to explore this aspect through other chapters where the operator’s role is discussed in terms of an alliance IPD form. We felt that this chapter offered the opportunity to adopt a PPP perspective of an IPD form and show how the facility operator can contribute to an effective project outcome. Similar conclusions and illustrations of best practice highlighted in this chapter for PPPs are similarly valid for the operator’s engagement in other IPD forms, such as an alliance.

Key principles and concepts Plan of work A key principle is that all projects for new or refurbished facilities must take account of operational requirements and expected performance outcomes and/or targets from the outset, through all work stages, including operation and use. Projects should follow a recognised plan of work (see Figure 24.1). This digital plan of work is so-called because it embeds Level 2 building information modelling (BIM) to provide a collaborative platform for integrated project delivery that is being adopted by major owners and operators (Rowlinson, 2017). The BIM Toolkit3 has been 527

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0 Strategy 7 Operation & End of life

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Figure 24.1  Generic work stages in a digital plan of work (BSI, 2015; BSI, 2016)

developed to provide support to the industry for this approach through step-by-step help in defining, managing and validating responsibility for information development and delivery at each work stage. The focus for each work stage is outlined below and can be varied to suit the owner’s specific needs. Strategy – defines the owner’s business case for the opportunity (and the project for realising it), including business objectives, value drivers and constraints. Brief – develops project objectives, including operational requirements and performance outcomes and/or targets for the facility. Concept – prepares the concept design, including outline proposals for the structural design and building-services engineering systems. Definition – develops the design, including coordinated and updated proposals for structural design and building-services engineering systems. Design – prepares the technical design, including all architectural, structural and buildingservices engineering information, cost and detailed operational data. Construct and Commission – plans, organises and coordinates off-site manufacturing with on-site construction, including assembly, testing and commissioning. 528

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Handover and Close-out – training of the facilities-management team and selected users, handover of the facility to the operator or facility manager and start-up of operations. Operation and Use4 – steady-state processes, aftercare, post-occupancy evaluation of performance, fine-tuning of systems, benchmarking and lessons learned.

Front-end planning Ensuring that projects deliver what they promise is a long-standing concern among owners, operators, facility managers and users. Projects must be set up for success from the outset; otherwise, the facility is unlikely to achieve its operational requirements and expected performance outcomes and/or targets. This necessitates greater focus on the front end of the project, where the ability to influence changes in design is relatively high and the cost of making those changes is relatively low. Late changes invariably lead to delay and additional cost, thereby negatively impacting the planned delivery of the facility. The later that changes occur, the greater the impact is likely to be. Avoiding, or at least minimising, change involves developing sufficient strategic definition, in relation to the opportunity that the new or refurbished facility represents, before any project is initiated. This can be achieved through a process in which the owner is able to articulate operational requirements and the expected performance outcomes and/or targets. The benefits of doing so are two-fold: first, it allows both the owner and delivery team to address uncertainty, enabling the owner to make the decision to commit resources to the project with a higher degree of confidence than would otherwise be the case. Second, it provides a solid basis for examining the practical implications of the owner’s and operator’s operational requirements and expected performance outcomes and/or targets, which are covered by a work stage dedicated to briefing – see the next section. The latter provides a means for translating strategic definition into needs and, subsequently, functional requirements that, in turn, can be translated into a concept design. These principles are contingent on the following conditions being met (BSI, 2015; BSI, 2016): ••

••

••

•• ••

The owner must be able to articulate the business case for the opportunity that will be realised by the project, including the business objectives, value drivers and constraints, together with the facility’s operational requirements and expected performance outcomes and/or targets. The latter should be reviewed at defined information-exchange points within work stages and, finally, during the periods of aftercare during operation and use of the facility. A clear governance structure must be defined for the opportunity and project, with roles and responsibilities that are resourced by appropriately qualified personnel having regard to the work stages in which they will be involved. The operational requirements and expected performance requirements should be cascaded through the supply chain by the delivery team. The appointment of the operator or facility manager should precede the appointment of the delivery team. Where no operator or facility manager is in place, the owner must ensure that expertise on facilities management is available, so that operational requirements and the expected performance outcomes and/or targets for the facility form an integral part of decision-making. The delivery team should be required to adopt an evidence-based approach to design and construction, which is driven by outcomes and/or targets that are explicit and measurable and which should incorporate a commitment to defined periods of aftercare. The transition from design through construction and into operation and use should include the transfer of project information and data for operational purposes from the delivery team’s project information model (PIM) to the owner’s asset information model (AIM) 529

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••

within the asset management system (AMS) supported by the owner’s enterprise system or equivalent. Information and data transfer should be phased during design and construction and not gathered in one package for transfer at the point of handover of the facility. Post-occupancy evaluation (POE) and other reviews of performance should be undertaken with the involvement of the delivery team during periods of aftercare and these, together with the lessons learned, should be recorded and stored in the owner’s enterprise system so that they are available to the operator and facility manager as well as future delivery teams employed by the owner.

Briefing for facilities management A recurrent problem is the failure of a new or refurbished facility to measure up to the requirements and expectations placed upon it. Designs do not automatically take account of operational requirements, so these must be brought to the attention of designers. Moreover, operational requirements must be monitored and verified in each work stage throughout design and construction and into operation and use. Too often, the message is misinterpreted or even lost on this journey, with unnecessary and costly surprises awaiting the operator and/or facility manager. Briefing has been defined as the process of identifying and analysing the needs, aims and constraints (i.e. the resources and the context) of the client (owner) and relevant parties, and of formulating any resulting problems that the designer is required to solve (ISO, 1994). The resultant brief is a working document that specifies those needs and the aims, resources of the owner, operator and users, the context of the project and any appropriate design requirements. Effective briefing of designers is necessary to ensure that the facility’s operational requirements and expected performance outcomes and/or targets are properly considered before the design is frozen. It is pointless commenting on the functionality and effectiveness of the design once the facility is in operation and use. The brief work stage is concerned with developing project objectives, including operational requirements and expected performance outcomes and/or targets, for the facility over defined planning horizons (i.e. short, medium and long term) as determined by the owner and operator; it involves capturing users’ and other stakeholders’ needs. Once agreed, requirements and outcomes should be monitored and verified in each subsequent work stage (i.e. concept design, technical design and construct and commission) so that there is no deviation from the agreed baseline of the project and the facility.

Operational requirements and performance outcomes Requirements in general can be considered and measured in terms of environmental, social and economic performance, which together represent the practical face of sustainability, i.e. the triple bottom line (Hourneaux, 2018), and should be used to guide design, construction, commissioning and handover into steady-state operation and use through flawless start-up of the facility. To achieve this goal, the following performance outcomes should be set at the strategy work stage and monitored through each work stage up to and including operation and use. Throughout, they must remain specific to the facility. •• ••

Environmental – the facility should meet performance targets for energy use, CO2 emissions, water consumption, waste reduction and others defined by the owner and operator. Social – the facility should be designed and constructed to meet the functionality and effectiveness defined by the owner, including the overall concept, context, uses, access, 530

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••

visual form, space, internal environment, durability and adaptability; in operation and use, it should meet the operator’s and users’ requirements, such as utility, usability, safety, maintainability, security, inclusiveness and comfort. Economic – the facility should meet performance targets for capital expenditure (CAPEX) and operational expenditure (OPEX), which should be used to determine whole-life costs for critical systems and components; the use of total expenditure, TOTEX, should be promoted as this helps to avoid minimising one form of expenditure at the expense of the other.

Sustainable space provision The space efficiency of the facility should be calculated and used to assess the owner’s need for space over the expected lifetime of the facility. Allowance for growth and/or reduction in the requirement for space and its phasing over the lifetime of the facility, as well as the need for adaptability for uses different to those for which it has been designed, should be incorporated in the assessment of sustainable space provision. Account should be taken of the extent to which space provision is likely to be affordable into the future. The assessment of required space should be enough to support an inclusive design that accommodates disabled people and those with equalities-related needs5.

Collaboration and coordination The delivery team must understand the desirability of a collaborative approach to its work and the importance of active engagement with the owner or owner’s representative, where appointed, and the operator or facility manager. The delivery team should provide details of its approach in the form of a project-management schedule, with the associated information requirements and deliverables for each work stage. A responsibility-assignment matrix (e.g. a RACI or RASCI chart) can be used to cover the work tasks with their associated deliverables. Where necessary, the matrix can be supplemented by another chart showing assigned design responsibilities and the level of detail and level of information to be exchanged. The delivery team should capture the operator’s, users’ and other stakeholders’ interests and needs and prepare a plan for stakeholder engagement. It can be assisted in this work by the owner or owner’s representative. Users, or their representatives, should be given the opportunity to express their views to enable a true understanding of their needs to be established. The implementation of value-improving practices, if properly managed, can help to add value for the owner or operator without any commensurate increase in cost. Value engineering is arguably the most well-known practice in this regard; however, it is necessary to ensure that it is a genuine attempt to improve value, which represents a relationship between cost and quality, and is not used as simply a means for cutting cost. Whole-life costing and lessons learned can be similarly regarded as value-improving practices. In all cases, the motivation for adopting valueimproving processes should be genuine and the timing of the action should be appropriate to the purpose of the practice and the respective work stage. Commissioning, training and handover should be planned jointly by the delivery team and the operator or facility manager, overseen by the owner or owner’s representative, to ensure operational readiness, flawless start-up and the early optimisation of operational performance. Users, or their representatives, should be involved in this planning. The owner should ensure that the delivery team is involved in POE as a means for assessing the performance of the facility over, typically, the first three years of its operation and use to ascertain actual outcomes and to document and share lessons learned. The POE should extend to measuring the impact of the operator’s or facility manager’s facilities-management strategy 531

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on the performance of the facility. The benefits of this approach, including POE, are seen in terms of earlier optimised operational performance of the facility within the operational budget (OPEX) than might otherwise occur, and the alignment of operational performance with the required performance outcomes set during briefing. Achievement of the required outcomes could be regarded as an indication of the operator’s and users’ likely satisfaction with the facility and offers some assurance in regard to operational cost.

Soft landings The purpose of soft landings (UBT/BSRIA, 2014) is to provide a unified approach for addressing outcomes from an integrated process of design, construction, and operation and use of the facility. Soft landings emphasise greater involvement of the operator and/or facility manager with the delivery team. In this regard, the facility manager is acting on behalf of the owner or operator and users before, during and after commissioning, with the aim of improving operational readiness to achieve flawless start-up and steady-state operations. An important change to long-standing practices, as promoted by soft landings and current standards (see, for example, BSI, 2015) is the concept of defined periods of aftercare following handover and close-out. These are intended to ensure that the owner, operator and users realise the expected performance outcomes and benefits from the facility. This amounts to more than the typical contractual obligation to make good any defects within a prescribed period posthandover; it covers performance reviews, feedback and corrective actions. Moreover, it involves the delivery team in maintaining a presence in the facility to deal with issues as they arise instead of the unfortunate habit of their being added to the workload of the facilities-management team. Aftercare is an owner’s requirement that is planned and developed during briefing. The operational requirements and expected performance of the facility are therefore outcomes that have to be agreed during briefing and which are then verified during each subsequent work stage. The arrangement ensures that the delivery team is continually aligned with the expected performance outcomes against which actual performance of the facility, as well as its own performance, will be measured.

Operational performance and aftercare Instead of operational requirements informing and, to a certain extent, driving design and construction decision-making, they can sometimes be left until design has commenced or, in the worst cases, until construction is underway. Any definition of project success needs to be broadened to include the achievement of operational performance requirements, since these are the ends that the owner and operator are seeking. Handing over the facility is no longer the final act for the delivery team. Ensuring that the facility performs as required requires defined periods of aftercare that allow for the adjustment and fine-tuning of systems necessary to achieve optimal operational performance as soon as possible. These periods of initial and extended aftercare should be determined by the owner and incorporated in all agreements involving the delivery team, including its supply chain, i.e. subcontractors, specialist suppliers and manufacturers. Six to eight weeks might be an appropriate period for initial aftercare, with three years for extended aftercare. Performance targets should be determined by the owner, based on a range that is recognised as achievable, not aspirational, and should be agreed with the delivery team. Measurement should be based on reliable sources of data, such as project records, meters, control systems, project records and operational records. During the periods of aftercare, data should be collected by the operator or the facility manager and analysed to determine the variance, if any, between actual performance and expected performance as part of the owner’s and operator’s benchmarking. 532

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Performance outcomes and targets might have to be reconsidered if, during the pre-qualification of prospective (supply chain) tenderers, it becomes apparent that the required performance is unlikely to be met. Measures of the variance between actual and target performance enable the operator or facility manager to pinpoint the cause(s), enabling fine-tuning of systems so that operational performance can be optimised. Where the owner agrees that changes to the expected performance outcomes and/or targets are necessary, details should be recorded in the relevant part of the PIM so that it can be transferred subsequently to the AIM. The period of extended aftercare should include an assessment of the functionality and effectiveness of the facility through a post-occupancy evaluation (POE). A proven methodology should be selected for this purpose. The Design Quality Indicator (DQI) (CIC, 2014) is a five-stage method for evaluating the design against three quality principles: functionality, build quality and impact. The BUS methodology (Building Use Studies, 2014) quantifies occupant satisfaction, reveals features of value or concern in the facility and provides feedback. Another methodology, BREEAM In-Use (BRE, 2012), is a scheme to help owners, operators and facility managers reduce operational costs and improve the environmental performance of existing facilities. All the above have achieved substantial validation and adopted.

Aftercare and start-up Aftercare is primarily an extension of the delivery phase to ensure that the facility performs in operation and use as intended. It can, however, give rise to complications when the operator is attempting to start-up operation and use, including the introduction of outsourced facilityrelated services. There can be confusion over responsibility for any loss of functionality, leading to conflict and dispute – even delay. If the delivery process is looked at through the lens of the operator or facility manager, it becomes immediately clear that the focus is upon ensuring that the facility can be started up safely and correctly as a precursor to operation and use. Starting up an office building might take a matter of days or a few weeks at most; however, an airport terminal building could take months to ramp up to normal operation and use. Failure to take account of the transition from the delivery phase to the operational phase, which start-up represents (see Figure 24.2), could result in overloaded systems and overworked operational personnel before they have had chance to become accustomed to the new environment. When aftercare is running concurrently with start-up the likelihood of problems arising is likely to grow. Decisions that might have been taken months or years earlier now begin to impact on the operational performance of the facility. It is too late to change anything that has gone before and which has been incorporated into the facility; if problems are encountered it might mean delay to normal operation and use or worse. Lost production and/or use of any part of the facility are likely to impair

Design

Construct

Test & Commission

Handover & Close-out

Start-up

Operation and use

Figure 24.2  The delivery process from the perspective of the operator or facility manager

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the owner’s and operator’s business model. Where problems persist, this could result in dragging down productivity and efficiency to unacceptable levels, creating a worsening situation for all parties. The operator or facility manager needs to get these messages across to the delivery team before design is anywhere near finalised. If designers, in particular, are able to see the delivery process from the operational phase, they might just act differently.

Information management Building information modelling (BIM) The use of building information modelling in general, and the development of project-specific building information models in particular, should be set in the context of the owner’s information management. Integrated project delivery demands an arrangement that can support a nearseamless progression from design, through construction, into operation and use. The owner’s enterprise system is arguably the most appropriate platform for information management and the AMS and asset information model (AIM) that will be populated by the delivery team’s PIM. The owner should ensure there is sufficient capability and capacity to support BIM Level 2. Where there are doubts about the sufficiency of the enterprise system, the owner should consider a proprietary computer-aided facilities-management (CAFM) system. Such a system must, however, support easy exchange of information and data with the enterprise system. The owner should consider the following requirements with respect to building information modelling. ••

•• •• ••

•• ••

The configuration of the common data environment (CDE) as the single source of truth about the facility, with access for the delivery team, subject to measures that ensure the security of information and data. Policy, processes and procedures for the security of information and data, including the protection of physical and digital assets. Information and data required from the delivery team to support facilities management. Format and means for information and data exchange – Construction Operations Building Information Exchange (COBie) provides a common structure for the exchange of information and data and ensures that information can be reviewed and validated for compliance, continuity and completeness. Structure and format of the owner’s AIM to receive content from the PIM. Details of how content from the PIM will be transferred to the AIM.

Key terms in information management (ISO 2018a, abridged) Information requirements (IR) Exchange information requirements (EIR) = IR in relation to an appointment Organisational information requirements (OIR) = IR in relation to organisational objectives Project information requirements (PIR) = IR in relation to the delivery of an asset6 Asset information requirements (AIR) = IR in relation to the operation of an asset

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Information model (IM) Project information model (PIM) = IM relating to the delivery phase, i.e. primarily the design, construct and commission stages Asset information model (AIM) = IM relating to the operational phase, i.e. operation and use stage

Other terms Common data environment (CDE) = source of information for a given project or asset for collecting, managing and disseminating each information container through a managed process Information container = set of information retrievable from within a file, system or application storage hierarchy

Exchange information requirements (EIR) The EIR – formerly the employer’s information requirements – set out the information to be delivered and the standards and processes to be adopted by the delivery team, including its supply chain. Ensuring that the right information is exchanged between the owner and delivery team is paramount (Ashworth et al., 2018). Specifically, the requirements set out in the EIR should be sufficient to provide enough information to answer the plain language questions – see later section – required at each work stage at an appropriate level of detail. The onus is on the owner to define its requirements adequately and clearly in terms of the information and data to be exchanged, and its timing. The points at which information exchanges are required should be specified in the EIR by reference to the respective work stage and decision gate or point. The EIR should cover the following: (a) information management; (b) commercial management; (c) security management; and (d) competence assessment. The EIR normally exists as a self-standing document, cross-referenced to other documentation used across work stages. The use of a template or other pro forma document for capturing information and data consistently is proposed (Ashworth et al., 2018). Given the origin of the EIR as the employer’s information requirements, it would not be surprising to find that there is some resistance to considering the information and data that the delivery team, operator or facility manager might require from the owner. For this reason, the delivery team and operator or facility manager should set down their requirements in the form of plain language questions and append them to the EIR. A closely related document is the brief, which can be used as a basis for developing and, later, evaluating design-and-construction proposals. The brief should be delivered in a digitally checkable form alongside the EIR – see the earlier section on briefing and the later section on BIM and briefing.

Asset information requirements (AIR) The owner should define the asset information requirements (AIR) that must be met in order that the OIR can be satisfied, together with the exchanges by which information and data 535

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are transferred to, and from, the AIM. In the course of delivering a facility, information and data will be generated and held in the PIM. If the owner is to be able to start up the facility successfully and move quickly into operation and use, key information and data will be required. The AIM fulfils this requirement, by acting as the owner’s permanent repository of information and data about its facilities; it is an integral part of the owner’s AMS and is managed within the CDE to which the delivery team should have a predetermined level of access – see the earlier note.

Plain language questions The owner will require information and data from the delivery team. Likewise, the delivery team will require information and data from the owner and the operator or facility manager in order to perform its work and contribute to the expected performance outcomes. Communication is best handled through a structured exchange of information and data, where all questions are formed in plain language, with answers recorded and shared within the delivery team and with the operator or facility manager. The efficiency of this process depends on the clarity with which questions are put by the owner, or to the owner, and how the subsequent answers are interpreted and the decisions that arise are implemented. This generally involves confirming understanding and then recording details in the owner’s information management system as part of the OIR, as well as the relevant parts of the PIM and, subsequently, the AIM. Plain language questions should be drafted for each work stage for the purpose of obtaining information to enable decisions to be taken in a timely and effective manner, including answering the key decision of whether to proceed to the next work stage or not. The purpose for which information and data are required should be stated. Prompts are advisable to ensure that the meaning of each question is unambiguous. The information required to answer questions, and any clarification or confirmation arising, should be delivered at the agreed information-exchange points. Exceptions can, of course, occur but these must be recorded.

BIM and briefing The implementation of BIM Level 2 – mandated in the case of UK public-sector projects – imposes a discipline on both the owner (or the sponsor) and delivery team to ensure that information and data are sufficient to express the owner’s needs and functional requirements for the safe, efficient and cost-effective operation and use of the facility. Attention needs to be paid to the structure and content of BIM models to ensure they can meet the needs of facilities management. This might require the delivery team to simplify certain aspects of its work (Korpela, 2015). Discussion between the delivery team and the operator or facility manager is therefore necessary to agree the approach. BIM Level 2 brings structure and transparency in an area of work where information and data are largely unstructured to ensure that requirements and outcomes can be verified. Traditionally, briefing has lacked a structured approach for capturing the needs of the owner, operator, users and other stakeholders. Information and data are conveyed in various paper-based documents with some digital media. BIM Level 2 and the use of COBie, as an information and data exchange file format, require a systematic approach to defining, gathering, organising, structuring and transmitting information and data. Specifically, the development of a BIM Level 2 brief requires the following. 536

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•• •• ••

Information and data to understand the needs, objectives and constraints of the owner and operator and how these can be used by the delivery team to develop an optimal designand-construction solution. A structured approach for eliciting and recording the information and data required for the above purpose. An agreed set of operational requirements and performance outcomes and/or targets for the facility together with the basis for measuring and comparing actual performance outcomes against those expected.

The above translate into the following steps for developing a BIM Level 2 brief. •• •• •• •• •• ••

The owner determines, in discussion with the delivery team, the timing and general content of information and data exchanges in accordance with the exchange information requirements (EIR). The owner identifies the information and data requirements needed to express the OIR; normally, these are captured in the strategy work stage. The owner identifies the AIR that will satisfy the OIR. The delivery team prepares the information-exchange plan, guided by the content of the EIR, with the assistance of the owner or operator and supported by the facility manager. The delivery team prepares the initial brief based on work activities that satisfy both the OIR and AIR. The delivery team transfers the initial brief accompanied by the EIR to the owner with a request for feedback.

PPPs as an integrator Background to PPPs Public–private partnerships (PPPs) have been promoted variously as: a means for funding public infrastructure that would otherwise go unfunded; an opportunity for the public sector to access private-sector expertise; a stimulus for technology innovation; and, ultimately, the provider of best value for money (or simply, best value) from a whole-life-cycle approach to the delivery and operation of capital assets such as healthcare, education and transportation facilities. An oftquoted benefit of PPPs is that they force project teams to think beyond delivery of the facility to assure its efficient, cost-effective operation and use. In this way, PPPs can be regarded as an integrator, by ensuring that operational performance requirements are explicit and incorporated into the facility’s design and construction and verified at key information and data exchange points. For the project’s supply chain of designers, constructors, fabricators and suppliers, this necessitates tighter control over scope definition, greater coordination of design and construction, and proactive management of downside risks (i.e. threats) than is typically the case under traditional forms of procurement. In general, PPPs are “characterised by joint working and risk sharing between the public and private sectors . . . and can include relatively simple outsourcing-type partnerships – where services are provided on short or medium-term contracts – or longer-run private finance partnerships” (HM Treasury, 2012). This section examines public–private partnerships based on a review of experiences in the UK. Whilst PPPs can be seen to varying degrees in many countries, there is a growing body of 537

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evidence in the UK with which to judge its performance in both the delivery and operational phases. Many lessons can be learned from these long-term, privately financed projects where the aim is to offer a service (e.g. healthcare and transport) for, typically, 20–30 years. The private sector’s involvement in what was, traditionally, a public-sector responsibility has resulted in mostly successful outcomes. Inevitably, there have been instances where the outcomes have been disappointing. As the watchdog of government (or rather taxpayers’) expenditure, the UK National Audit Office has reviewed over 200 public–private partnerships. Extreme cases have been the subject of audits (see, for example, NAO, 2009b) to determine if the public sector has achieved best value from engaging the private sector and, if not, the cause of failure. The involvement of the private sector in public-sector projects can range from the delivery and operation of facilities such as those for education, healthcare and transportation, to the transfer of capital assets such as government buildings and the responsibility for their operation and maintenance as well as other facilities of one kind or another leased by the public sector from the private sector.

Setting up a PPP for success The three phases of a PPP are: specifying requirements; negotiating the contract and arranging finance; and managing the facility and service delivery (i.e. operation and use). In projects for the delivery and operation of facilities, these phases are covered by a single contract. Significant effort has been made by the government to provide guidance, including a model contract and specialist private-finance units, to both public-sector bodies and private-sector firms. Even so, there have been areas where a lack of clarity has given rise to conflict. A primary driver and measure of success is, as noted above, the achievement of best value. This is a long-standing argument for involving the private sector in public projects. Best value is therefore frequently quoted, but it can sometimes be difficult to evaluate. The achievement of best value is founded on the belief that so long as public-sector bodies act as intelligent clients they are able to ensure that the private sector delivers the required services. In other words, a defined level of service will be achieved through the involvement of the private sector; moreover, it will cost less than if it had been delivered by the public sector. The government has acknowledged that “well-formed partnerships with the private sector have delivered clear benefits: in driving forward efficiencies; getting projects built to time and to budget; and in creating the correct disciplines and incentives on the private sector to manage risk effectively” (HM Treasury, 2012, p5). It is, however, clear that the structure of the partnership has a major bearing on its success. The government’s revised approach to projects involving private finance emphasises the aspect. There are many reasons for private-sector firms to engage in some form of PPP. Typical among them are guaranteed work into the future and potentially higher margins and profits. Private-sector firms might not, however, be sufficiently capitalised or resourced to manage complex projects to the extent required. It is not unknown for initial assumptions to prove erroneous once the contract is in place and the actual cost of work becomes clear. Private-sector firms are subject to market forces, variable workload and multi-stakeholder influences that can alter their outlook and approach to existing contracts almost overnight, which is then reflected in their attitude and behaviour. Since contracts tend to run over many years, it is hardly surprising that changes in the marketplace would negatively impact service delivery. One of the assumptions that private-sector firms make is that so long as their bid is sufficiently below the public-sector comparator (the estimated cost of the public sector’s continued management of the facility) then some shortcomings in service delivery will be tolerated. Public-sector bodies recognise the effort and cost involved in terminating a contract and will only do so if it is absolutely necessary. 538

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Issues with PPPs A review of audits and their reports reveal several issues that should be considered before embarking on a project involving any substantial form of partnership between the public and private sectors. These include procurement, service-contract management, change control and the informed client function.

Procurement The procurement process for the delivery and operation of capital assets has tended to be slow and expensive for both the public and the private sector. The result has been higher than expected costs and reduction in value for money. Of particular concern are contracts, which have been found to be insufficiently flexible during the operation and use stage to accommodate changes that take account of the public sector’s more detailed service requirements. This tends to suggest that contract conditions have not been drafted with adequate provision for adjustments to be made to service delivery in light of experience of operations. From a private-sector perspective, this could be seen as a case of the public sector wanting both the lowest price and the ability to make changes without incurring additional expenditure. The practical implications of an arrangement running for years into the future require careful consideration of many factors, not least risk management. In some cases, inappropriate risks have been transferred to the private sector, resulting in a higher-risk premium being charged to the public sector; in other words, contractors have been allocated risks for which they were not best equipped. In the case of projects for the delivery and operation of facilities utilising private finance, there is a perception that equity investors have made windfall gains, leading to concerns about the achievement of best value. Closer scrutiny of the risks involved in such projects is necessary if risk sharing and gain sharing are to be properly balanced.

Service-contract management The public sector has been urged to stress the importance of effective service-contract management in order to be sure of obtaining best value. This demands a more hands-on approach than was considered necessary in the early years of partnerships where it was wrongly believed that, once a private-sector partner was on board, the relationship would mostly manage itself. The thinking behind this practice was that the private sector had the skills, capacity and experience to succeed and that the public sector could be fairly passive because of the trust implied by the creation of a partnership. This situation was not helped by contracts that lacked transparency and which limited sight of the private-sector partner’s plans for the contract.

Change control The apparent inability of public-sector bodies to obtain agreement by the private-sector partner to adjustments or other forms of change in service delivery during operation and use, as well as service delivery itself, has been another cause for concern and one that can easily lead to disputes that damage working relationships. Irrespective of whether the project is an outsourcingtype partnership or a longer-run private-finance partnership, it is necessary to understand how change during operation and use can be accommodated in a controlled way. In this context, 539

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change is any alteration in the agreed baseline of a contract concerning service delivery. The mechanism for dealing with a change proposal should be defined in the contract and supported by a clear procedure to ensure that such proposals are properly considered, evaluated and, where appropriate, remunerated.

Intelligent client function Closely tied to concern about service-contract management is the need to reinforce the importance of public-sector bodies acting as intelligent clients. This has been a long-standing anxiety and has been highlighted time and again in reports by the National Audit Office. Where insufficient control has been exercised by a public-sector body, the outcomes have sometimes been spectacular disappointments – see NAO (2012) for a discussion on affordability and financial management. The key enablers enabling the public sector to act as intelligent clients across all stages of a project, not just operation and use, can be considered as follows (NAO, 2011). •• •• •• ••

Accurate data to make informed choices, particularly accurate estimates of time and cost for a defined scope to ensure best value. Skills, capacity and experience to assess complexity and the probable success of the project over its lifetime. Effective governance and project assurance with appropriate empowerment to ensure that projects and programmes go ahead only where they will deliver best value. Robust challenge of the procurement method, scope and business-case assumptions to identify opportunities to secure a better deal.

Lessons learned For the public sector, there is strong empirical evidence to show that not all bodies have been sufficiently rigorous in their preparation for a partnership, i.e. planning for the journey. Not enough emphasis has been given to understanding the risks, the private-sector partner, the evaluation of best value and requirements in operation and use. From the public-sector perspective, it is necessary to consider the following if projects are to be set up for success. •• •• •• •• •• •• •• •• ••

Define the business opportunity that gives rise to the need for the project. Ensure that there is a clear statement of the opportunity in the form of a detailed business case. Understand the private sector’s motivations and required profitability. Identify and assess the risks (threats and opportunities) in the project and allocate to the party best able to manage them. Proactively manage risks to maintain a current risk profile of the contract. Understand the implications of failure by the private-sector partner and what can be reasonably done by the public-sector body to reduce the likelihood of this eventuality. Define contract conditions to deal with change, especially during operation and use. Maximise value for money through a searching process of pre-qualification and balanced risk transfer. Formalise the contract but ensure both parties understand the duties, obligations and procedures that arise under it.

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Conclusions Operability is a key concept in industry in general, yet its routine incorporation into the design and construction of new and refurbished facilities is lacking. The fragmentation that exists from the separation of operation and use from design and construction is a large part of the reason and is increasingly recognised as a problem that must be resolved. The solution is less straightforward but does at least draw on several proven concepts and principles that are being increasingly deployed. This chapter has discussed how these concepts and principles can work in practice within the framework of an integrated process for the delivery and operation of a facility. The digital plan of work as a reformed stage-gated process for delivery and operation provides this framework. Significant among the concepts is soft landings, post-occupancy evaluation, building information modelling – as one facet of the wider concept of information management – and a more developed approach to briefing. Together, they can move the industry closer to delivering facilities that function and perform as expected. Whilst we would not claim PPPs to be an exemplar of integrated project delivery, they do challenge the traditional, fragmented processes of delivery and operation and use. If the balance of risk and reward between public and private sector can be better addressed, the PPP model has much to offer the wider industry, notably repeat-order, private-sector clients.

Notes 1 In industry in general, operability is the impact of design and production on operation and use. Construction is synonymous with production. 2 Level 2 BIM represents federated file-based digital information with some automated connectivity and supports the development of a fully populated data set to assist in facilities management. 3 URL https://toolkit.thenbs.com. 4 BS 8536 Parts 1 & 2 (BSI, 2015; BSI, 2016) refer to Operation and End of Life. The term Operation and Use is preferred here because of the focus on operability. 5 Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation 6 Current standards refer to asset and assets. These terms are interchangeable with facility and facilities respectively.

References Ashworth, S., Tucker, M. and Druhann, C.K. (2018) Critical success factors for facility management employer’s information requirements (EIR) for BIM. Facilities. URL https://doi.org/10.1108/ F-02-2018-0027. BRE (2012) BREEAM In-use, BES 5058. Watford: Building Research Establishment Limited. BSI (2015) BS 8536-1:2015, Briefing for design and construction – Part 1: Code of practice for facilities management. London: British Standards Institution. BSI (2016) BS 8536-2:2016, Briefing for design and construction – Part 2: Code of practice for asset management. London: British Standards Institution. Building Use Studies (2014) BUS methodology. Cambridge: The Usable Buildings Trust. www.busmethodology.org.uk [viewed 2018-11-28]. Cabinet Office (2013) Government soft landings – executive summary. London: Cabinet Office. www. cdbb.cam.ac.uk/Resources/Bimtaskgroupmaterial/GovernmentSoftLandingsExecutiveSummary.pdf/ at_download/file [viewed 2018-11-28]. CIC (2014). Design quality indicator (DQI). London: Construction Industry Council. URL http://dqi. org.uk [viewed 2018-11-28]. Flyvbjerg, B. (2014) What you should know about megaprojects and why: An overview. Project Management Journal, 45(2), 6–19.

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Brian Atkin and Steve Rowlinson HM Treasury (2012) A new approach to public private partnerships, London: HM Treasury. Hourneaux, F., Luiz da Silva Gabriel, M and Amalia Gallardo-Vázquez, D. (2018) Triple bottom line and sustainable performance measurement in industrial companies. Revista de Gestão, 25(4), 413– 429. ISO (1994) ISO 9699:1994, Performance standards in building – Checklist for briefing – Contents of brief for building design. Geneva: International Organization for Standardization. ISO (2017a) ISO 41011:2017, Facility management – Vocabulary. Geneva: International Organization for Standardization. ISO (2017b) ISO 41012:2017, Facility management – Guidance on strategic sourcing and the development of agreements. Geneva: International Organization for Standardization. ISO (2018a) ISO 19650-1:2018, Organization of information about construction works – Information management using building information modelling – Part 1: Concepts and principles. Geneva: International Organization for Standardization. ISO (2018b) ISO 41001:2018, Facility management – Management systems – Requirements with guidance for use. Geneva: International Organization for Standardization. Korpela, J. Miettinen, R., Salmikivi, T. and Ihalainen, J. (2015) The challenges and potentials of utilizing building information modelling in facility management: The case of the Center for Properties and Facilities of the University of Helsinki. Construction Management and Economics, 33(1), 3–17. NAO (2009a) The building schools for the future programme – Renewing the secondary school estate, London: National Audit Office. NAO (2009b) HM Revenue & Customs’ estate private finance deal eight years on, London: National Audit Office. NAO (2011) Lessons from PFI and other projects, London: National Audit Office. NAO (2012) Peterborough and Stamford Hospitals NHS Foundation Trust, London: National Audit Office. Rowlinson, S. (2017) Building information modelling, integrated project delivery and all of that. Construction Innovation, 17(1), 45–49. Saghatforoush, E. (2014) Extension of constructability to include operation and maintenance for infrastructure projects. Doctor of Philosophy thesis, Brisbane: Queensland University of Technology, Science and Engineering Faculty. UBT/BSRIA (2014) The soft landings framework for better briefing, design, handover and building performance in-use. BG 54/2014. Bracknell: BSRIA. URL http://usablebuildings.co.uk/UBTOverflow/ SoftLandingsFramework.pdf [viewed 2018-11-28].

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25 IPD AND SAFETY MANAGEMENT A productive combination Steve Rowlinson Introduction In the mid-1980s, a research post-graduate at Brunel University wrote a foresightful essay for the CIOB (Chartered Institute of Building) essay competition. That essay indicated that there would be fewer people on construction sites and more use of robotics, prefabrication and new materials. That particular look into the future was entitled “Wot no people?” The essay won an honourable mention rather than the first prize. However, the vision portrayed in that essay is now nearing reality on our construction sites with the use of exoskeletons, robotic construction methods, intelligent craneage, the use of drones and photogrammetry to track progress and a whole host of other digital and technological advances. Despite these advances the construction industry has been notoriously poor, worldwide, in addressing occupational health, safety and well-being issues. Worldwide, the construction industry has one of the highest, if not the highest, accident and fatality rates of all industries. In Australia and the United Kingdom (UK) the construction industry also has the highest suicide rate. These are issues that have not been addressed thoughtfully and with vigour in the past and the industry needs to be ashamed of its attitude and progress in these areas. Construction workers are expected to go about their tasks in confined spaces, extreme heat and cold, in remote locations, using dangerous and toxic substances and poorly designed mechanical aids. They are required to wear often-cumbersome, poorly designed personal protective equipment at all times. These circumstances are just the implementation side of construction. There are many other hazards that come about because of lack of forethought in the design and building processes of the construction industry. UK and Europe have construction-design management regulations and these impose obligations on the client and its designers to assess and record potential hazards while undertaking design and design development. Thus, there is an imperative to integrate the project delivery process from an occupational health, safety and well-being perspective (OHSW). This chapter is conceptual in nature, being a thought-provoking reflection on current OHSW practice in light of potential improvements that may be developed though integrated project delivery (IPD). It links very closely and is informed by and informs other chapters in this handbook. Table 25.1 illustrates how it links to other chapters in the book.

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Value: This chapter challenges the reader, and industry, to consider and address the value proposition of employees (both white- and bluecollar workers) of project teams as being both valid and legitimate when engaged in project delivery. Workplace well-being should be a core “value” considered for any project in any industry segment. Role of the client: This chapter suggests a more proactive expectation and requirement of the whole project delivery team system to seriously consider OHSW. The SyLLK model illustrated in Figure 6.4 and discussed in that chapter illustrates the need for systems thinking, when engaged in IPD, to ensure that learning from past reflections on experience, culture, social, technology, process and infrastructure issues are considered when developing strategy. Similarly, these facets need to be considered when developing and enacting an OHSW strategy. The Chinese case study of high-tech digital technology approach to supply chain management: This chapter discusses how the emergence of automated factory-line processes may shape the future and inform the discussion of OHSW, and how the human–machine interface may be considered and developed. Design thinking: This chapter is informed by the need and means of design thinking. Readers may wish to refer to Chapter 8 on better understanding the precepts and practices of design thinking as it may be applied to OHSW practices. Culture of collaboration: Chapter 10 takes a cultural perspective on IPD, so readers may wish to refer to that chapter because it discusses relevant issues such as power distance, information asymmetries and other national, professional and organisational cultural influences. In Chapter 25 we stress the role of culture change. Knowledge, skills, attributes and experience (KSAEs): This chapter links closely to Chapter 11 with its explanation of KSAESs that are required for effective collaboration and integration. Chapter 11, in Figure 11.2, also illustrates how task-contextual influence on workers impacts their motivation and productivity effectiveness. This provides a useful background context to this Chapter 25 discussion on OHSW using an IPD approach. Implications of IPD for human resource management (HRM): Chapter 12 informs the way that HRM policy and career development may be integrated into effective OHSW planning and implementation. Trust and commitment: A positive outcome from a comprehensive and well-designed OHSW policy being effectively implemented is that it engenders trust and commitment that form an essential element of IPD. Thus, this chapter links strongly to Chapter 13 in that regard.

 4

13

12

11

10

 8

 7

 6

 5

Chapter link comments

Chapter number

Table 25.1  Links between this chapter and others in this book

23

22

19

18

16

14

Stakeholder engagement: As noted early in this chapter, the needs of frontline or “coal-face” employees are often “trumped” by considerations of cost and time efficiency and so all employees, particularly subcontracted labour, are rarely seriously considered as legitimate stakeholders. Chapter 14 approaches to stakeholder engagement inform concepts of how OHSW should become a key consideration and how a true IPD approach may form a breakthrough in the future. Emerging digital technologies: These are having a profound impact on the human–machine interface. Chapter 16 informs this chapter’s thinking about the disruptive as well as constructive role of advanced technology on humans and the broad consideration of how OHSW may be applied in IPD projects. Innovation diffusion: This chapter’s discussion of the interaction of OHSW and how innovation and change needs to be diffused on IPD projects and throughout the industry in general is informed by innovation-diffusion theory and practice, discussed in Chapter 18. Governance: The meaning and principles of governance discussed in detail in Chapter 19 are highly relevant to this chapter. In the example of the Australian experience presented in Chapter 19, the role of the alliance management team’s (ATM) key result areas (KRAs) on OHSW form a key mechanism that informs how the desired future discussed in this chapter may be enacted. Activity theory (AT)-based approaches: Chapter 22 detailed a Hong Kong engineering infrastructure case study that may be applied equally to OHSW issues in this chapter. The use of AT may be adopted to take the OHSW concept from an ideal to a practical reality. As noted, it is more feasible to do so in an IPD environment. An ethics perspective: The objectives of OHSW are fundamentally and unarguably ethical. As Chapter 23 highlights, with its discussion of ethics from several perspectives, OHSW can be seen fitting with virtue, utilitarian, deontological and justice ethics. This authority and legitimacy positions OHSW as an urgent and value-driven requirement and thus support this chapter discussion.

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The challenge We raise four important questions at the beginning of this chapter: 1

2

3 4

Why are safety and productivity seen as incompatible when “safe sites are productive sites”? How can we integrate safety considerations, management systems and safe practice into the design of facilities for construction and for use? What technologies, techniques and processes do we have in order to incorporate OHSW into our project-information environment and transmit this to the workforce, management and supervisors? Where can we find examples of good practice in this regard and how can we integrate this culture of caring for OHSW throughout the supply chain? How can we have integrated project delivery when the workforce does not feel like part of the team and are not engaged in either the construction process or operational process decisions?

This chapter discusses the challenge of how to build OHSW into the project delivery process – simply put, the conception, design, construction, use and re-use – through IPD. This will inevitably involve collaboration, digital and logistical technologies and a robust common data environment (CDE) to serve and remind all project participants of the paramount importance of OHSW to business and personal success. These participants will need to focus on the three pillars of sustainability in an industry that is characterised by professional and commercial boundaries and a confrontational and profit-seeking culture that is embedded in deep-seated institutional processes and systems.

Workforce A major player who has not featured in the preceding chapters is the construction worker and their engagement in safety and production matters. The old adage, “a safe site is a productive site” still holds and this chapter puts OHSW into context in a changing industry. The focus of this chapter is the worker and, particularly, worker empowerment and engagement by management. In addressing these issues we look through a socio-technical-systems lens focussing on occupational health, safety and well-being. The aim of the chapter is to: a) Provide a better understanding of conditions and practices on construction sites, focussing on worker empowerment and engagement with supervisors and management through collaborative working throughout the whole project delivery process, including facilities management as this has implications for OHSW in operation; b) Provide evidence for the notion, in academe and industry, that existing and prescriptive practices are a consequence of the “distance” between workers and the supervisory and managerial teams that can be bridged by IPD and digital technologies; c) Identify and explore innovative processes and techniques in IPD that can assist setting new goals for OHSW.

Perspective We view accident causality from a socio-technical-systems viewpoint. This chapter focuses upon the relationship between OHSW in an industry consisting of a multicultural and ageing workforce. It is cross-disciplinary in perspective, covering the domains of social and cultural research, public health, organisational behaviour and governance in the challenging 546

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and high-risk environment of construction: truly integrated project delivery. The industry is at a point where major changes in organising and procuring public works are taking place. Technologies such as building information modelling (BIM), volumetric and modular construction, the Internet of Things (IoT), drones and other digital technologies (discussed in more detail in Chapter 16) will not only bring efficiencies but also drive collaborative working and early contractor involvement. These changes affect relationships and drive technological advancement, and so a sociotechnical-systems viewpoint is an appropriate lens through which to view these process innovations. By focussing on a key operational area, workforce engagement, there is an opportunity to drive an attitude change at the grass-roots project (workface) level at the same time as change is taking place at the more strategic, business level. Institutions, as socially constructed orders of behaviour, are patterns of connections between components of a system, signifying “what works” within a system. A systems viewpoint focuses attention on the risks embedded in how the components of a system work together in operation. While it is important to examine the effectiveness of interventions and initiatives to prevent occupational accidents and ill health (van der Molen et al., 2016), Hasle et al. (2014) advocate that interventions should be viewed “as a part of social programmes consisting of a number of different policies, regulations, enforcements and other attempts to change workplace practices” (p.74). Thus, instead of trying to evaluate the effect of a particular intervention strategy on OHSW performance, Hasle et al. (2014) call for more research addressing the mechanisms that turn the collective effort of a multitude of stakeholders into concrete workplace practices that actually improve the OHSW conditions. IPD is an ideal process within which to drive such a change. The aim is to better understand what actors should take into account and how they collectively influence industry’s safety-management strategies. Indeed, this approach signifies the rise of the generalist in the project team: key personnel who are able to see and understand multiple perspectives while also focussing on key goals to be achieved, in this case excellence in OHSW in construction and operation. This signals the need for new professional capabilities to achieve the espoused objectives of IPD

Contextualising the problem: the case of Hong Kong This chapter is informed by prior work by the authors and others on construction-site-worker health checks, safety-climate measures, heat stress and the ineffectiveness of voluntary safety schemes on construction sites (Tin et al., 2016, Ju & Rowlinson, 2014, Yi & Chan, 2016). Occupational health, safety and well-being are issues grouped together as, during research undertaken with the Mass Transit Railway Corporation (MTRC), the concern shown for workers’ health and well-being was seen to positively affect workers’ attitudes towards their own safety (Rowlinson & Jia, 2015). The results of the completed Hong Kong Research Grants Council general research fund (GRF) project 17206514, “Lowering the curve – construction site safety improvement: culture’s consequences” are summarised below: •• ••

A 360° assessment of contractors’ staff revealed a disconnect between worker and management perceptions of safety management – engagement of the workforce by management was not taking place; The client headquarters (HQ) assessment revealed significant differences in safety climate: {{ {{

between management staff, safety advisers, professional/technical staff, and administrative staff. Summing this up, organisational safety culture was inconsistent across the enterprise 547

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•• ••

The 360° assessment led to the questioning of the effectiveness of voluntary OHSW initiatives by both workers and management; Rule breaking was observed to be an everyday occurrence on the part of the workforce. The proximal cause of this was the lack of engagement of workers by management. However, through discussion and observation it was concluded that the distal causes were institutional and stemmed from, inter alia, cultural dissonance, power distance and pragmatism leading to a lack of engagement, collaboration and communication.

This institutional problem surfaced as a lack of visibly felt leadership and became the focus of safety-management initiatives at the MTRC, one of the participating organisations. The outcome of a range of site-based investigations has enabled the confirmation of: •• ••

A mismatch of perceptions in terms of management and workers as to the nature of safety climate on site and the expectations of both parties; A mismatch in terms of observed action and espoused values of management that has given the perception of a lack of visibly felt safety leadership.

Through a series of workshops on-site, major issues have been identified and some of these, which have led to OHSW problems, are: •• •• •• •• •• •• ••

Pace of work and the willingness of management and supervisors to turn a blind eye to unsafe behaviours; Proliferation of different rules, procedures and standards applied by different contractors, supervisors and client on the same site; Weakness in engaging the workforce in discussion and decision-making on safety procedures and work progress; Inadequacy and ineffectiveness of current safety training initiatives, particularly voluntary schemes; Paucity of innovation and use of off-site, modular, prefabricates and digitally enabled design and construction; Lack of integration of facilities-management processes and information requirements into the project delivery process; and Inability to incorporate safety-management processes into the overall project delivery process.

Where does this lack of engagement originate? It seems that many obvious safety issues pass by the gaze of the supervisor, manager and engineer. Cultural issues, such as power distance, uncertainty avoidance, “face”, and pragmatism produce a social and psychological distance between workers and supervisors and managers. In the United Kingdom, in a recent report to an international contractor taking part in similar research, it was noted that weak integrative systems existed between the firm and project levels, particularly concerning the implementation of OHSW1. The organisational safety culture espoused by senior management is not being translated into a positive safety climate on site. Indeed we could say that management is: Not asking; Not listening; Not acting. 548

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This chapter investigates how IPD can be instrumental in bringing about a holistic approach to management of OSHW.

Issues identified in the “old industry” This context manifests itself as a problem in terms of communication, engagement and the display of visibly felt safety leadership in Hong Kong and elsewhere. The latter is exacerbated by the fact that management staff tend to focus on their own specific competence and work tasks and do not display a general concern for the workforce and safety procedures while conducting their tasks around site. Indeed, the worker is rarely, if ever, engaged in discussions about work or other issues such as welfare, health and safety. This is an industry-wide issue that can be addressed by bringing about a change in safety values and safety climate. In Hong Kong it was observed that there was a degree of scepticism on the part of management in terms of the feedback from worker surveys. Although accepting that the climate survey had clearly identified workgroups that were not safety conscious, management was unwilling to accept their complaints, observations and suggestions. This defensive attitude is natural but is one that needs to be addressed by the industry if improvement is to take place. Analysis of accident reports indicated that the feedback from the site survey matched with the reports from the accidents in which risk-taking was a common contributing cause of accidents for general labourers, riggers, steelfixers, formworkers and tunnel workers. Furthermore, feedback from an alcohol-use survey also pinpointed steelfixers, formworkers and tunnel workers as being amongst those most at risk from alcohol-consumption issues. In addition, it has been confirmed in analysing accidents in the ageing workforce that those over 50 years of age are more susceptible to slip, trip and buming into and against objects, causing injuries (Rowlinson & Jia, 2015). However, an associated finding is that accident causality models used in Hong Kong are too simplistic and the data collected for accident analysis reflects this in that no distal causes are recorded and considered.

Manpower Hong Kong’s serious labour shortage is exacerbated by the weak engagement of the workforce and further compounded by weaknesses in the sociotechnical skills of supervisors and the lack of social-engagement skills of managers and directors. In framing their research questions, Rowlinson and Jia (2015) provided an eight-level taxonomy of factors contributing to incidents and accidents: individual, task, team, project, organisation, industry, society and ecosystem levels. The first four of these are used in this research as an aide-memoire to the many levels that can affect OHSW management. The tension between productivity and OHSW goals at the workplace level has been frequently pointed out as a critical contributing factor to occupational injuries and fatalities (Haslam et al., 2005; Lingard & Rowlinson, 1998, 2005). In another research project, initial findings confirmed that culture, in the form of weak safety climate and a strong risk-taking propensity of construction site workers and supervisors, is associated with poor safety performance (Zhang & Fan, 2013). This is an expected outcome but why safety climate is poor was the focus of the research: visibly felt safety leadership and engagement were both found to be absent on sites, yet project directors and managers initially denied this. Eventually, after discussions and debate with senior managers and directors, this was accepted as a problem area and as a priority area for further research. These failings can be used to explore: 549

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•• •• •• •• ••

Perceptions of communication with and engagement of the workforce; Involvement of workers in setting goals and work procedures; The discussion and allocation of tasks and targets; The role and effectiveness of safety training and initiatives; The experience of “distance” between worker and supervisor and manager. This is where virtual reality (VR) and other visualisation technologies have a role to play – (see Chapter 16).

Ways forward The construction industry is characterised by a blame culture, complacency, and an abrogation of responsibility for ill-thought out policies, procedures and initiatives; all amplified due to the fragmentation of providers across the supply chain. A blind eye has been turned to the issue of language barriers and the consequences of cultural issues (in both Hong Kong and elsewhere – this is a global problem). There is ample evidence of the influence of the concepts of power distance, face and pragmatism on construction sites, thus hampering worker engagement. Such issues have rarely been addressed by stakeholders and institutional governors of OHSW in the industry. This situation is intolerable and a sea change is needed in governance and approaches to safety management. Ample opportunities exist to drive change but change must include the approach to procurement of facilities and engaging the frontline worker. Currently there is a flawed understanding of value for money that stems from clients accepting the lowest price bid in competitive tendering. Regrettably, a culturally bound attitude resonates in lowest price and cost saving, not value. This attitude is invariably reflected in management’s attitude to OHSW and the pressure to produce more output for cheaper and less frontline worker input. IPD provides the opportunity to achieve the goal of safer working through minimising risk to workers. In a recent project in Hong Kong, two different contractors made use of a proprietary falsework supplier’s system2. The supplier facilitated the design and erection process through its own design engineers and the use of a BIM model that, linked to programming and logistics modules, enabled the delivery and erection of the system falsework in a controlled, safe environment. Additionally, the main contractor on one of the projects produced a 3D-printed model, in layers, of the four storey building so that workers and engineers alike could visualise the falsework erection and construction processes3. This process was successful through the appropriate use of digital technologies, despite the fact that this was a conventional rather than IPD project. Examples of the use of this type of technology may be found, for example, on the specialist subcontractor’s web sites noted here4. This concept of IPD thus focuses on worker engagement and empowerment, workersupervisor and worker-manager interaction and alternative production methods involving more “factory-like” production in safer environments (see Chapter 7 for a case study). We explicitly critique perceived inhibitors of change and identify the focus for change to enable a sustainable, engaged workforce and industry. We provide here a polemic designed to stimulate debate around the key issues requiring change. This recognises the deep-seated nature of issues associated with frontline workers, where, on the one hand, legislation is enacted but where perceptions and behaviour have failed to change. On the other hand, the most effective changes occur where cultural change leads to new shared perceptions. Yet, behaviours take time to be influenced and embedded in day-to-day practice. It is the role of management to instigate changes and we will produce challenges aimed at influencing practice at the management level and driving the process of empowerment. Virtual reality (VR) has opened doors to driving behavioural change on-site through direct, personal experiences. The ability to record site activities using a 3D camera and recording directional sound makes short, sharp 3D-training experiences realistic 550

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and enhances worker awareness and engagement. For examples of virtual experiences, visit URL http://newtonlowe.com/recent_work/recent_work.html. In their work on skill retention in wind-turbine rescue workers Lawani et al. (2014) underline the importance of refresher training. VR and AR-based refresher training can be delivered on-site cheaply and immediately through standalone VR headsets utilising models from BIM or 3D cameras, giving the instruction an immediacy and relevance. Major construction and facilities-management companies are now experimenting with worker tracking through big data and location technologies that have the potential to alert workers to dangerous locations, activities and processes and improve productivity. A safe site is a productive site. The issue around production of standards for improvement and modernisation in national and global construction industries cannot be underestimated. An industry grows on the basis of trust, particularly in construction environments of inherent complexity and uncertainty, hence with associated risk. In construction, health, safety and well-being are a huge consideration for these obvious reasons and also because they factor into the risk and cost assessment of the billions of dollars of transactions that characterise this industry. The UK-based Royal Institute of Chartered Surveys, with its HQ symbolically opposite the Houses of Parliament in Parliament Square, has made construction-industry standards the major plank of its global outreach, engagement and impact agenda for very good reason. This change process must draw on years of experience and transdisciplinary expertise of research and project management teams in bringing OHSW into the design process in the construction industry to achieve the goal of “global standards” of delivery. It is highly likely that this will be influential in shaping the booming construction industry across the countries forming the One Belt One Road investment region. Interactive programmes are already being developed to aid designers in “designing safety into the project.” An early example can be seen here: URL http://software.nirilia.co/contracting/GCUIOSH (accessed 23/1/2019) but already virtual models designed using BIM visualisations and 3D video are being used to place the designer into the “real” construction process. This is a very important development, as Hare et al. (2015) and Hayne et al (2017 & 2015) have identified weaknesses in the education and training of graduate engineers and constructors that leaves them incapable of identifying and ameliorating safety hazards in their designs. Hayne et al. state (2015, p161): The students were typically able to identify some generic hazards but struggled to distinguish hazards generated by construction processes with only a small percentage able to suggest safer alternative forms of construction. The practitioners were better able to identify process hazards but noticeably highlighted some errors in the design. These findings do not augur well for the incorporation of Design for Safety (DfS) into IPD as we stand today. There is a need to recognise education and training as providing the generic skills for project participants to be able to work creatively and collaboratively in IPD projects. Thus, hard technical and professional knowledge need to be melded with collaborative and creative skills for IPD to succeed. This OHSW problem is unusual in that it addresses commonly occurring international issues and because of its interdisciplinary dimensions. It spans business management; project management, engineering and construction; sociology and cultural studies and public health in addressing OHSW. The potential for significant industrial impact is evidenced by the engagement of top-ranking contractors and clients who have committed to this IPD approach (Gammon, Laing O’Rourke, Skanska). Our goal as an industrial sector should be to form an expert consortium that will be capable of developing policy of the highest global quality and, more importantly, implementing its standards at the industry level in various countries. 551

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The agenda addresses a range of global issues including health, sustainable cities, cultural understanding and human well-being. This is taking place against a background in which many major projects are being delivered by main contractors that have international operations spanning different cultural and working situations. The collaboration within the industry sectors brings with it a degree of expertise and practicality to add to the knowledge and perspectives that exist in each company’s team: a synergy. Their involvement in driving change through innovation shows just how important is the existence of well-founded and internationally credible standards for industrial growth and market expansion. The impact of the adoption of IPD will not only benefit construction workers, but also the companies for which they work and the construction industry of Hong Kong and other countries influenced by the production of good practice guidelines. The adoption of IPD is adding to our understanding of the cultural issues that affect health, safety and well-being risks, as well as highlighting issues and associated costs and efficiencies in international construction industries. By also addressing the ageing workforce, which is an important element of a sustainable-cities agenda, the provision of buildings and infrastructure and the management of these facilities will be enhanced.

Tools, techniques and processes to improve OHSW Hadikosumo and Rowlinson, in a series of papers in 2003 (Rowlinson and Hadikosumo), 2004 (Hadikosumo and Rowlinson) and 2005 (Chantawit et al.), addressed the issues of safety in design by visualising construction operations. This work took place before BIM was properly established in the industry, before VR had taken off, and it was done collaboratively with the Hong Kong Housing Authority who, at the time, were firmly entrenched in the traditional approach to procurement of their estates but did have a strong desire to improve safety. Thus, this work could not be classed as IPD but it was digitally enabled. The safety aspects were investigated post-design during construction planning and what was produced was not a true digital model but proof of concept. As the concept of BIM and the development of modelling software was quite primitive at the time, the approach to safety management was dependent on the individual knowledge and expertise rather than collaboratively using the likes of virtual reality to experience and identify problems as we can do nowadays. Despite the fact that primitive technologies were used, the output was quite impressive and was a genuine attempt to move into the realm of methodstatement development and hazard recognition through the use of digital technologies.

Regulations The United Kingdom (UK) Construction Design Management (CDM) regulations have been in place for more than a decade but the philosophy behind them was not related directly to IPD. However, the update of the regulations in 2015 was very comprehensive and insightful in that it paved the way, without expressly indicating this, for the use of visualisations, BIM and digital technologies to improve the safety-management process starting at the design phase. As such, the philosophy behind CDM is very much aligned with IPD and the use of a CDE and focuses particularly on the role of the design professionals in this process. Currently, one might question the capabilities of the design profession in this area but, as in the UK and Europe, these are now mandated; this must provoke a change within what is still the conventional, silo mentality and professional ethos. With a new generation of young engineers coming through who are both literate in information-communication technology (ICT) and information sharing, there is a 552

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distinct possibility that the quality of the CDM process and so the overall safety performance of the industry will experience a significant improvement. The CDM regulations were never written to be part of IPD. However, IPD provides an excellent framework and templates for the early incorporation of safety management in the design process. The ability to have discussions concerning safety in construction and use at an early stage is enabled through the CDE that can effectively become a forum for involving all parties. The information transfer and questioning enabled by CDE technologies can become a powerful facilitator of this dialogue.

Site-based initiatives There is further scope for CDM to improve real-time safety management through the use of digital technologies and big data that can feedback information on hazards and hazardous situations on an on-going basis throughout the working day. Such systems have been trialled in Europe, South-east Asia and North America and are sometimes based around equipment, such as Liebherr cranes (www.liebherr.com/en), and alternatively around individuals and monitoring of their location and actions. These areas are still developing, but with the rapid development of 360° cameras and videos, the ability to make use of data collected from individual workers through digital means and the enhanced use of video capture, the scope for real-time interventions in safety is developing rapidly. As always, what is needed with such initiatives and technologies is a far-sighted roadmap that links both the technologies and the real-time information with the work and management systems both on-site and in the head office. With a move towards modular and prefabricated volumetric construction this monitoring and flagging of potential incidents becomes more viable. Looking at practicalities, a protocol is needed in terms of the flagging and transmission of warning signals. It is important that it is realised that there are immediate and sometimes emergency actions needed. For instance, issues which need to be discussed at toolbox talks from observations on the previous day and other items that need to be considered in both weekly and monthly site meetings. By making use of a CDE and clever filtering of the data that are mined it is possible to distribute these warnings and flags at appropriate times to the right people. It is important to not overload the whole workforce with a mass of information that, people being people, will be ignored. Thus, sensible design of interfaces, dashboards, weekly, daily and monthly reports of key statistics that can be interrogated for appropriate links between various items and issues is vitally important. If we devise information systems that overload people, or that provide the wrong level of information, or that cannot be queried with natural language questions, then the systems will still fail to produce the desired improvement in safety performance and management. The use of virtual reality as a training tool is undoubtedly already in place in many industries. In construction, there are examples of the use of 3D video in the VR environments being used to highlight safety violations and non-compliance as a tool for reminding the workforce, at the work phase, as work goes on, of the need to follow procedures and systems. There is scope for linking virtual and augmented reality with BIM models and near-live 360° video to highlight issues that have to be addressed by management and the workforce. This is one of the most powerful tools that the industry can use in bringing to the attention of management and workers the need to adopt different processes, procedures and maintaining a high level of alertness and awareness. In order to illustrate these points, we include below a recent discussion on how CDM and Employers Information Requirements (EIRs) can be currently enabled by BIM. In the future these will be readily and rapidly updatable on a day-to-day basis throughout the course of the 553

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design and construction of the project. In the UK, the Health and Safety Executive’s BIM 4 Health and Safety Working Group has prepared the Guidance Note for Clients Writing an Employer’s Information Requirements (EIR). The guide has ten key questions for clients on what health and safety information to specify in an EIR template. These are as follows: •• •• •• •• •• •• •• •• •• ••

What early project decisions will have health and safety implications for the operation and end use of the asset? Can the Common Data Environment (CDE) for this project enable health and safety information to be captured, stored and retrieved as needed at every stage of the project life-cycle and affect parties beyond the project? Has the relevant and good quality health and safety information (PCI) been provided to the design team? Have you specified reviews at key stages to enable collaborative working and feedback on risk management? What are the design-risk objectives? Has a design plan been requested, inclusive of a collaborative design-risk management plan? Has it been requested that models produced by the different design disciplines are capable of effective federation and that health and safety information can be conserved for re-use? What are the arrangements that will be put in place at the outset to ensure testing and commissioning is carried out effectively? What are the arrangements that will be put in place at the outset to ensure that information in an OHSW File is made available to the end user? How will the client be able to ensure that lessons are learnt from this project experience, in relation to health and safety?

(Source: www.bimplus.co.uk/analysis/how-clients-can-write-eir-harness-bim-and-improve, accessed 31/1/2019). Thus, in the UK, IPD can provide an ideal framework for producing the EIR based on CDM 2015 requirements that place duties on clients, principal designers, designers, principal contractors and contractors to share and use health and safety information. Indeed, without the existence of CDM in other jurisdictions this approach is still good practice.

Conclusions We posed four key questions at the beginning of this chapter in relation to OHSW. We have shown by example that there are many ways in which IPD can improve OHSW. However, IPD, CDM, DfS, etc. are not easy fixes. Just as IPD is reliant on an effective and efficient CDE, OHSW improvements are reliant on a change in the attitudes and focus of management leading to collaboration and engagement of the workforce. To take a current example, Farmer’s suggested solution (Farmer, 2016, see Chapter 5) to the problem is to move construction manufacturing off-site. However, that change does not address the issue of the construction worker, as workers may well be displaced by factory workers and, potentially, robots. Hence, the whole basis of Farmer’s review is called into question as it does not directly address the plight of the construction worker. What the review needs to address is that the level of demand in the UK construction industry does not appear large enough to support more than one or two modular construction factories. Compare that with China where there are three or four mega-factories in each province. 554

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Even the Chinese government estimates that the cost of the modular construction systems is up to 30% more expensive than conventional construction. However, this estimate does not take into account the cost of accidents to construction workers that may be reduced through safer construction, nor the fact that construction workers are underpaid and underutilised compared to those inside, say, the automotive industry. On top of this, the initial investment in the factory is not discounted over the period of its life, so the 30% uplift in cost is actually notional but real in terms of what the user or client pays at this moment in time. The solution to providing a construction industry that exhibits excellent OHSW will not come about overnight. Neither will the adoption of IPD in the industry. However, if we apply the principles of IPD in this rapidly changing technological environment the opportunity for significant improvement in the workers’ lot appears bright. The industry needs to accept that BIM is a process, not a technology nor a model, and that BIM is not the solution to the industry’s woes. In a similar manner, effective management of OHSW is a process, not a technology nor a set of rules and codes of practice. By taking an IPD approach to project management and to OHSW we have the opportunity to foster collaboration and engagement while leveraging emerging technologies. Central to enabling this change is IPD facilitated by a CDE.

Notes 1 Hedley Smyth from University College London (UCL) and Steve Rowlinson on a joint OHSW project in an as yet unpublished paper to the CIB World Building Congress, “Constructing Smart Cities,” Hong Kong Polytechnic University, June 17–21, 2019. 2 See www.perihk.com/. 3 Consulting report – therefore non-disclosure agreement prevents a citation reference here. 4 For example see www.rmdkwikform.com/za/knowledge-centre/4d-programme-management-commentpiece-construction-news/ accessed February 15th 2019

References Chantawit, D., Hadikusumo, B.H.W., Charoenngam, C. & Rowlinson, S. (2005). 4DCAD-Safety: Visualizing Project Scheduling and Safety Planning, International Construction Innovation: Information, Process, Management, 5(2): 99–114. Farmer, M. (2016). The Farmer Review of the UK Construction Labour Market: Modernise or Die, Construction Leadership Council. Hadikusumo, B.H.W. & Rowlinson, S. (2004). Capturing safety knowledge using design-for-safetyprocess (DFSP) tool. Journal of Construction Engineering and Management, American Society of Civil Engineers, Reston, USA, 130(2): 281–89, March/April. Hare, B., Cameron, I. & Morrow, S. (2015). Design engineers’ perception of health and safety and its impact in the design process. Engineering, Construction and Architectural Management, 23(1): 40–59 Haslam, R A., Hide, S A., Gibb, A G.F., Gyi, D E., Pavitt, T., Atkinson, S. & Duff, A.R., (2005). Contributing factors in construction accidents. Applied Ergonomics, 36: 401–415. Hasle, P., Limborg, H. J. & Nielsen, K. T. (2014). Working environment interventions – bridging the gap between policy and practice. Safety Science, 68: 73–80. Hayne, G. R., Kumar, B. & Hare, B. (2015). Evaluating the effectiveness of modern building engineering studios to deliver design for safety (DfS). Proceedings of the CIB W099 International Health and Safety Conference, 10 Sep. 2015. Behn, M. & McAleenan, C. (eds.). Downpatrick, UK: EEI Publishing, 161–169 Hayne, G., Kumar, B. & Hare, B. (2017). Design hazard identification and the link to site experience. Proceedings of ICE: Management, Procurement and Law, Apr. 2017, 170, MP2: 85–94. Ju, C. & Rowlinson, S. (2014). Institutional determinants of construction safety management strategies of contractors in Hong Kong. Construction Management and Economics, 32(7–8): 725–736.

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Steve Rowlinson Lawani, K., Hare, B. & Cameron, I. (2014). Skill decay of wind turbine technicians in the use of rescue and evacuation device during emergency. Proceedings of CIB W099 Achieving Sustainable Construction Health and Safety, Lund, Sweden, 2–3 June 2014: 537–553 Lingard, H. C. & Rowlinson, S., (1998). Behaviour-based safety management in Hong Kong’s construction industry: the results of a field study. Construction. Management and Economics, 16: 481–488. Lingard, H., & Rowlinson, S. (2005). Occupational Health and Safety in Construction Project Management. London; New York: Spon Press. Rowlinson, S. & Hadikusumo, B.H.W. (2003). Virtually Real Construction Components and Processes for Design-For-Safety-Process (DFSP), in Issa, R, Flood, I. & O’Brien, W. (eds), 4D CAD and Visualization in Construction: Developments and Applications. Abingdon: Balkema. Rowlinson, S. & Jia, A. Y. (2015). Construction accident causality: an institutional analysis of heat illness incidents on site. Safety Science, 78: 179–189. Tin, S. P. P., Lam, W. W. T., Yoon, S., Zhang, N., Xia, N., Zhang, W., . . . Fielding, R. (2016). Workplace health promotion: assessing the cardiopulmonary risks of the construction workforce in Hong Kong. PLOS One, 11(1), e0146286. van der Molen, H. F., Lehtola, M. M., Lappalainen, J., Hoonakker, P. L. T., Hsiao, H., Yi, W. & Chan, A. (2016). Health profile of construction workers in Hong Kong. International Journal of Environmental Research and Public Health, 13(12): 1232. Zhang, M. & Fang, D. (2013). A cognitive analysis of why Chinese scaffolders do not use safety harnesses in construction. Construction Management and Economics, 31(3): 207–222

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26 IPD PERFORMANCE AND INCENTIVE MANAGEMENT Derek H. T. Walker and Steve Rowlinson

Introduction The subject of project success and its links to performance, and how that may be measured and incentivised, has been of much interest for many years in the project management (PM) literature. Success is inextricably linked to value in several ways. Chapter 4 of this book is devoted to the discussion of value and values. It can be generally agreed that successful project delivery means that value generated through project delivery actually results in the expected benefits materialising and reflects that the process of managing the project was conducted in an efficient and effective manner. A review of PM and associated literatures by Zidane and Olsson (2017) found the terms ‘efficiency’, ‘effectiveness’ and ‘efficacy’ being used to define performance and that these terms were often used as synonyms, even though they each take a separate perspective on performance. They produced a useful figure to explain the three terms (2017, p632) and they conclude from their extensive study that efficiency relates to performance in terms of the use of inputs to produce outputs so that aspects such as lowest cost, speed of delivery and minimisation of waste are implied by this term for a given (input) plan of delivery action and expected quality. Zidane and Olsson also explain that effectiveness relates to the outcome and fitness for purpose. Interestingly, they raise the point about effectiveness that ‘we need to ask questions before the start of the project about how it will be done and, at its end, how it was done’ (2017, p633). This implies considering long-term impact and the interests of stakeholders, many of whom may not have been identified or considered at the time of project planning and delivery. Efficacy is, according to Zidane and Olsson (2017, p633), ‘Divergent from efficiency, the focus of efficacy is the achievement itself, not the resources spent on achieving the desired effect’. They see efficacy as the relationship between the pre-project plans and the actuality of the delivery outcome’s ability to deliver what was planned. Interviewee LXR-2 from a research study on the Level Crossing Removal Program (LXRP) project (Walker, Matinheikki and Maqsood, 2018) responded to a question about his experience of the way that key results areas (KRAs) were framed and applied and how they may be measured through key performance indicators (KPIs). He commented as follows:

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if anything, the KRAs and KPIs are a lag indicator, and if you try and manage your alliance with those as a lead indicator you fail, because you’ve got to understand the ‘why are we here in the first place, and how do we need to go about our business in order to achieve those things?’ and then we use the KRAs and KPIs simply to score that. . . . Everybody gets that back to front. Everybody thinks the KRAs and KPIs are the be-all-and-end-all of things that we’re here to do. They’re not; it’s just how we score ourselves so we can get some bonus’. We gain two insights relating to performance measures from this statement. First, KRAs and KPIs are lagging, not leading performance indicators. Second, KRAs are an expression of the strategic aim and purpose of why the project is being undertaken in the first place. Given the brief discussion of Zidane and Olsson’s (2017) findings it is interesting that interviewee LXR-2 did not distinguish directly in his quote between KRAs that attempt to measure efficiency rather that effectiveness. He did, however, explain in more detail in his interview what the project KRAs and KPIs were and what they set out to achieve. We devote a section of this chapter later on to KRAs and KPIs. We focus this chapter on a discussion of performance from an efficiency and effectiveness perspective. This perspective raises several questions: 1 What does success look like from a multiple and diverse valid stakeholder perspective? (Project-output delivery efficiency or outcome performance effectiveness.) 2 How can we operationalise project-output performance? (Project-delivery governance features that drive high levels of performance.) 3 How do we best link project-output performance to an incentive scheme that motivates and facilitates the successful delivery of the project? (Project-delivery monitoring and evaluation performance signals that motivate people to achieve high levels of performance.) We address each question in sections and include, where relevant, examples from our research into the practical delivery of value through IPD projects. We do not argue that IPD is necessary to deliver high levels of value for all projects but we do demonstrate how this is achieved within a context of multiple valid stakeholder needs being met coherently, efficiently and effectively.

The many guises of success The concept of success is somewhat elusive. Do we mean that the project as specified and designed was efficiently delivered or do we mean that the project output facilitated and led to an effective value-generating outcome? Was success due to the project-delivery process followed? What dimensions of success should be considered within an IPD context? What dimensions of the whole-of-life project life-cycle should be considered and which ones are relevant to IPD? Figure 26.1 illustrates a project life-cycle from a performance-characteristics perspective, illustrating IPD-role involvement. Morris and Jamieson (2004) argued that project success begins with successful strategy development that brings a project to life by virtue of deciding on a need to deliver an identified valid benefit that requires a project to deliver that strategic initiative. Patanakul and Shenhar (2012) discuss project strategy in terms of a strategy-components tree. The first of three main branches of the tree is the ‘perspective’ taken: why do this project? This explains the business objective and strategic concept rationale. The second branch states the ‘position’: what has to be delivered? This explains the output expectation, the benefit in terms of a competitive advantage or value, and what success measure may be used for success. 558

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Strategic planning success

Project owner

Integrated team: project owner, design team, delivery team, operator team

Front-end planning success

Integrated team: project owner, design team, delivery team, operator team

Design and delivery success

Adaptability/flexibility/ resilience Disposability consequences

Requirements Value definition Procurement choice

Business case development success

Re-use or disposal success

Resources Organisational Capabilities Leadership and team commitment Culture

Strategic benefits Aesthetic (pride) benefits Practical user benefits Societal/stakeholder benefits Cognitive learning benefits

Integrated teams project owner, operator team, disposal team

Figure 26.1  Project life-cycle performance conceptual reasoning

The third branch is the guidelines: ‘how’ to realise the project benefit? This explains the project definition and its strategic focus. Strategic planning success sets the project on a sound trajectory by justifying its existence and laying the ground for its business-case development that, if successful, provides clarity of reasoning and vision so that those engaged, particularly in IPD alliancing, can identify what ‘best for project’ might mean and motivate them towards that outcome. To successfully develop the business case, the project requirements need to be effectively identified; the expected value (benefits) need to be clear and unambiguous; and the appropriate procurement choice of options should be explored and decided upon. It should be noted that the main responsible body for this is the project-owner participant (OP) supported by expert consultant advisers with input from identified stakeholders. Successful business-case development lays the foundations for effective project front-end planning (FEP). This has been identified as an essential pre-condition by many scholars studying project-delivery success, particularly on complex infrastructure projects (Artto et al., 2001; Christensen, 2009; Aaltonen et al., 2015), in the industrial mining and petrochemical industries (Merrow, 2011), and more generally in projects (Cooke-Davies, 2009). For IPD alliancing this is best pursued by integrating the OP and design, delivery and operations non-owner participants (NOPs). The rationale for this integration is to acquire as many relevant and viable insights and perspectives of the project’s needs in order to shape its design for effective delivery and operation. Achieving a successful FEP preparation requires assembling the necessary resources, such as funding, people, technology and facilities where the FEP can take place. It also needs the requisite capabilities of all parties. In one reflection upon IPD alliancing, criticising some alliances, Nick Tamburro, who was at the time a senior treasury public servant advising ministers on project procurement (Tamburro and Wood, 2014), made the point that many project overruns and delivery disappointments were linked to poor business-case development that often leads to confused FEP. Capability requirements apply to all project participants. An advantage of IPD alliancing is that when one participant is struggling, the other participants 559

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help to bridge any gaps in expertise and capability so that the team as a whole performs to the expected standard. Merrow (2011) argues that effective FEP also needs effective leadership of collaborative teams who demonstrate commitment and are strongly motivated for project success. This should be reinforced by an organisational culture that supports collaboration and effective commitment (see Chapter 10 for a more detailed discussion). Design and delivery success require a number of characteristics identified and illustrates in Figure 26.1. In the IPD-alliance context, this requires effective integration of the OP and NOPs. The inclusion of operations NOPs in the united alliance team has been shown in several chapters of this book to strongly contribute to a project product that is operationally viable and often optimised. The level of depth of understanding of the project output and outcome benefits has an impact on the way the project is designed and delivered. The importance of understanding the aim of the project has been raised at the strategy-planning and business-case phases. However, at those phases the full integrated team will not have been intimately involved and so they need to be fully briefed and the strategic importance made clear. As discussed in Chapter 11 with regard to people’s knowledge, skills, attributes and experience and how that is intertwined with task and job shaping (see Figure 11.2), motivation is linked to interpreting the work’s meaningfulness, sense of responsibility and feedback quality. Similarly, understanding the project’s aesthetic benefits may instil pride in the project to motivate people to strive for excellence because they identify themselves with positive project-outcome achievements. Understanding the pragmatic operational output and likely outcome of the project benefits helps the united team to deliver a ‘workable’ solution. Often, as we see in various chapters in this book (in particular for innovation diffusion, discussed in Chapter 18), smarter and sometimes far-less-expensive operations solutions are found and delivered because the operator NOPs were part of a well-functioning alliance. Other stakeholder benefits may also be delivered in alliances, such as in the Victorian State Government’s LXRP. Chapter 11 discusses how the LXRP aimed to leave a ‘legacy for the community’ and as a consequence it engaged a committee of external urban-planning experts and local stakeholders in the affected rail corridor areas to help them define that legacy. This is an example of one of many stakeholder-benefit considerations that may be articulated as key results areas (KRAs) or informally understood in a culture that believes in leaving a positive legacy. An important project design and delivery benefit is to capture lessons learned from the project so that cognitive benefits and a process to reap these benefits is another important dimension of project-process success (Eppler and Sukowski, 2000; Schindler and Eppler, 2003). To be successful, the ‘right’ people with the ‘right’ knowledge, skills, attributes and experience mix need to be recruited, developed and retained over the project phase that they are required for. Chapter 12 provides greater in-depth discussion about human resource management within an IPD context. Merely assessing the delivery of a project’s output product without considering its operational and disposal phases can distort the concept of success. A recent paper on decommissioning complex and risky ventures, such as nuclear reactors and oil exploration facilities (Invernizzi et al., 2018) draws to our attention how the original design and delivery of projects may affect the effectiveness of its de-commissioning post-operations. Similarly, re-use, re-purposing, extensions, renovations and disposal raise sustainability as well as practical issues about how benefits from effective post-project product output and operational use are realised. The original business-case development, front-end planning, design and delivery phases and even how the project may be operated impacts the benefits that may be derived at the post-project-outcome phase. Figure 26.1 illustrates the client or project owner, operator and disposal team as bearing responsibility for that phase. It suggests that the IPD team should have considered benefit-realisation across the entire project life-span (including death and burial) during the indicated earlier phases, to be able to fully realise a more holistic notion of successful delivery. 560

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We may now better appreciate that the link between output and outcome is more obvious when there is a unified set of strategic goals (short and long term across the project’s life–death cycle) that, when delivered, clearly lead to the anticipated outcome. However, for IPD projects there are often multiple valid and recognisable stakeholders with disparate needs and expectations, and so shaping and defining KRAs is one side of the performance ‘coin’. The other side of the coin is the way that project governance, including incentives in the form of gain- and painsharing, is structured to maximise the chance of a successful project outcome. Chapter 22 deals with strategy in more depth and how strategy development may be approached from an activity-theory perspective for IPD projects. This section explains the ‘performance’ context for projects in which meeting the needs of multiple and diverse stakeholders may be considered as delivering project success.

Success: output or outcome? Zidane and Olsson (2017, p631) summarise their research into the literature on performance as follows: (1) to be efficient is to produce an output in a competent and qualified way; (2) to be efficacious involves possession of a quality that gives the produced results the potential to lead to an effective outcome; and (3) to be effective is when results accomplish their purposes, thus giving an effective outcome. This distinction helps frame the conceptual difference between a project output and outcome. Walker and Nogeste (2008) provide a background literature review on performance measures and project procurement that summarises much of the literature on project-delivery success in a book chapter (Walker and Rowlinson, 2008). They produced a table explaining successdimension measures (2008, Table 6.1 page 182), adapted from Shenhar et al. (2001, p717), and commented on the literature relating to these. Their dimensions included project efficiency (the usual ‘iron triangle’ measures of cost/time/quality) and effectiveness (impact on the customer/ stakeholder, business success and preparing for the future). Discussion of what success might look like was still in its relative infancy during the turn of the 21st century with a focus on critical success factors (Jugdev and Müller, 2005), however, the distinction between project-delivery success and project-outcome success had been clarified and was well understood around that time (Cooke-Davies, 2001;2002). This conceptual debate shifted somewhat while maintaining its emphasis on efficiency with a focus on critical success processes (Zwikael and Globerson, 2006). Also, during the first decade of this century the debate on success drew in the role of strategy by recognising that the purpose of delivering a project was to achieve a specific need (effectiveness) but still emphasising that this was to be accomplished in an efficient manner (Dinsmore and Cooke-Davies, 2006; Shenhar et al., 2007; Turner, 2009). Considering projects as vehicles that deliver strategy has advanced the ‘success’ debate (Artto et al., 2008; Loch and Kavadias, 2011; Artto et al., 2016). This perspective leads to a view that the delivery of projects may also be investigated through a benefits-realisation theoretical lens (Bradley, 2010) and also from a value-creation perspective (Laursen and Svejvig, 2016). Perspectives focussed on effectiveness success are complemented by increased interest in how projects fit into programs of work and how these may deliver positive networked outcomes and system-outcome benefits. Morris describes this as the institutional context of project delivery (Morris, 2013, see Chapter 16). Effectiveness, strategy and benefits-realisation are therefore focussed on a stakeholder-value proposition that is linked to a wider view of project-outcome success. 561

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However we must not neglect the efficiency project-success perspective because it is important that projects meet the objectives and needs of the immediate project stakeholders. Stakeholders such as the project sponsor (within the project owner’s organisation) and the design and delivery team are mainly concerned with ‘iron triangle’ time/cost/quality intended outcomes being delivered. An efficiency-success outcome naturally enhances their ‘brand image’ and reputation, as a consequential outcome, if that perception of efficacy success is realised and capitalised upon. Readers may wish to refer to Chapter 14, on stakeholder engagement, to understand how stakeholder needs may be better elicited when establishing what a project is meant to achieve and how best to engage with stakeholders throughout the phases of a project, including its completion and handover. Chapter 23 in this book, discussing ethics and shared values, relates to how the concept of project delivery and project-outcome success may be viewed from the needs and value proposition of a wide set of stakeholders. Traditionally procured and delivered projects tend to shape most people’s perception of ‘success’ in a highly fragmented manner. However, for IPD projects (particularly public-infrastructure alliance projects) perceptions seem to have been purposefully crafted for the meaning of success in broader terms, relating to a wide group of stakeholders. In summary, to address question 1, we can conclude that success is like a two-sided coin. One side is concerned mainly with a successful project output. This is generally associated with efficiency in meeting specific output targets, such as cost, time and quality in terms of delivering the specified result. This is a somewhat narrow view of both performance and success. The flipside of the coin is concerned with a successful project outcome. This is generally associated with effectiveness in realising the intended potential outcome benefit or strategy. We stress the words ‘intended potential’ here because an outcome may yield unintended consequences (positive, as opportunities to be grasped, or negative, as unforeseen risks) through sense-making flaws in conceptualising the project’s aim or misreading the mental models of those who may ultimately benefit from the project (Balogun and Johnson, 2005). Judging project-success performance in terms of outcome has its drawbacks. Proximal stakeholders include the organisations directly engaged in the project initiation, design and delivery. They characterise success as efficiently delivering project output by means of an efficacious project team. Distal stakeholders are users of the project output. They include people tasked with operational management and upkeep as well as those who may benefit from a project output. The project output allows them the opportunity to achieve their value proposition through an effective project realisation of the project’s benefits outcome. They would perceive the result as a project-outcome success even though it may have been inefficiently delivered. There are numerous examples of project-delivery management failure but massively successful project outcomes. The Sydney Opera House (Heneghan, 2004; Murray, 2004) is one of many examples. The construction project output ran massively over its time and cost budget and virtually destroyed many reputations. However, in project outcome terms, it has been seen as an iconic draw card for the cultural transformation of Sydney in particular and Australia in general. Similarly, project-external stakeholders, which includes silent or voiceless entities such as ‘the environment’ or future beneficiaries of a project output, may view project success in a variety of ways depending upon how the project outcome impacts them. Figure 26.2 illustrates the two groups of stakeholders and also illustrates the links between performance measures and outcome impacts.

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Proximal Organisational performance needs

Distal

Project owner’s performance needs

Society’s performance needs

Identified external stakeholder performance needs

Stakeholder Performance Needs What is success?

How do we measure success?

Project output and outcome performance measures

Performance governance processes

Performance behavioural expectations Project delivery outcome

Figure 26.2  Performance chain of reasoning (Source: adapted from Walker and Nogeste, 2008, p178)

An important requirement of public expenditure for government-sponsored infrastructure projects and for commercial organisations is that not only does the end product deliver value for money (efficiency) but that it also represents best value. In other words, value from a broad system-wide perspective rather than from a narrower, perhaps lowest life-cycle cost, perspective.

Success as value for money or best value? Beauty (value) is in the eye of the beholder, as the saying goes. Value is ‘perceived worth’ and is based upon highly individualised or perhaps group-identified criteria. Chapter 4 discusses the meaning of value and how that value is perceived by different project stakeholders. The Australian Government Department of Infrastructure and Transport1 Guidelines Note 4 provides a definition of value for money (VfM) as follows: Value-for-Money denotes, broadly, a net measure where the required benefits (including quality levels, performance standards, and other policy objectives such as social and environmental impacts) are balanced and judged against the cost (price and risk exposure) of achieving those benefits. Generally, Value-for-Money is assessed on a ‘whole-of-life’ or ‘total-cost-ofownership’ basis. This includes the various phases of contract period, including transitioning-in and transitioning-out.

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The concept of ‘long-term sustainability of Value-for-Money’ often applies, and this emphasises the government’s focus on investment choices that ensure Value-forMoney outcomes are promoted and protected outside the contract period and over successive anticipated contracts. Department of Infrastructure and Transport, 2011b, p12 One problem with this definition is that it describes a concept that is somewhat restricted. The major emphasis is biased towards the project output rather than the outcome. For example, it does not include any assessment of network impacts: the way a rail- or road-improvement project may improve the network performance but appear to make little visible improvement of the road or rail section being addressed by a project. It also does not address the issue of potential future, generational impacts. MacDonald identifies several problems with the restrictive focus on VfM. He notes one concern about incorrect reporting and monitoring of VfM across the project-delivery cycle beyond initial project stage-gates to approve the business case and sanction a project (MacDonald, 2011; MacDonald et al., 2013). He also draws attention to emerging UK literature that seems to be moving away from the term VfM because its hard-edged commercial focus implies that nonfinancial value may be overlooked (MacDonald et al., 2013, p282). He cites Akintoye et al. (2003) who explain best value in detail, pointing out that best value has a stronger service-logic focus than does VfM. Also, it concentrates on preparing for the future through valuing continuous improvement, social-value generation and long-term sustainability considerations. While VfM espouses interest in these aspects of ‘long-term sustainability of Value-for-Money’ as highlighted in the quote cited above (Department of Infrastructure and Transport, 2011b, p12), it nevertheless has an expectation that a cost–benefit analysis be conducted as part of business-case development. However, it is unclear how to address the issue of measuring value that cannot be monetised: clean air or water, for example. Proxy measures may be found to attempt to address that challenge, such as setting a KRA for acceptable pollution levels or for health impacts to be measured through reported health treatment. However, the problem with proxy measures is that they may mask or disguise an effect or issue and so fail to measure that value adequately. The problem is often associated with the convenience of managing what can be measured. Ranji (2014) reflects on his experience, from the perspective of a medical practitioner in a healthcare-delivery service context, of being overwhelmed by quality indicators that fail to address root issues and how that leads to unnecessary interference due to an over-emphasis on micro-managing. The adage that ‘what gets measured gets managed’ can lead to over-emphasis on performance measures that are easy to frame and explain but may not measure the real impact (Neeley, 1997;2002).

Success as value, but value to whom? Aligning stakeholder needs and value propositions The issue of ‘what is value and value to whom?’ is addressed in Chapter 4. This issue raises questions about how needs and value propositions may be aligned. Figure 26.2 also introduces four general groups of stakeholders, each with different and often conflicting needs and performance expectations. Organisations involved in delivering a project (the design team(s), delivery contractor(s) and service and materials suppliers and subcontractors) would no doubt expect to meet coresuccess criteria of time, cost, and profit margin to the specified project-quality level. They may also aspire to fulfilling other success criteria, such as improved reputation, improved customer relationships and business sustainability. The project owner would also be interested 564

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in the cost–time–quality ‘iron triangle’ success criteria but there would also most likely be an emphasis on operational effectiveness. This may reflect an asset-sustainability criterion. Society in general has performance expectations that any project should be ‘doing no harm’. Environmental and social disruption should be minimised or eliminated in the short term. From a proactive and positive perspective, the performance requirement may be to improve existing social and environmental deficiencies and perhaps solve some identified problem areas and challenges. External distal stakeholders may also have some input and influence. These stakeholders may include a subset of, or a transient, society: for example, tourists and other visitors perhaps using a transport-infrastructure-facility project. They may be not yet be born, i.e. looking at these stakeholders from a cultural-heritage, historic, or future-planning perspective. They may not have a voice, being non-human or inanimate stakeholders (Sage et al., 2011; Tryggestad et al., 2013), e.g. if returning a polluted waterway into a vibrant and valuable environmental asset for nature and people. When we start to think about these multiple-stakeholder group’s needs and aspirations we can appreciate the difficulty in aligning identified needs into a coherent and integrated form that responds to each stakeholder’s value proposition for supporting or contributing to project success. The Australian Government Department of Infrastructure and Transport Guidelines Note 4 uses the term Minimum Conditions of Satisfaction (MCOS) as a key performance concept that relates to specified KRAs (2011b, p30) identified in the approved project business case. They add that these may include a range of expectations that address multiple but aligned stakeholder groups. In a study of 61 alliance projects completed in Australia between 2012 and 2014, alliance managers and other senior alliance participants were asked to identify KRAs for recently completed projects (Walker et al., 2015, p4). The list included a number of expected KRAs but also included KRAs that suggest that the project owners were adopting an aligned and holistic view of what they expected to achieve through their alliance project. One interesting observation from that study is that no interviewee actually identified cost as a KRA. However, the study’s authors suggest that the ‘within the target outturn cost’ (TOC) performance KRA was implied because each of the alliances has incentive gainshare and painshare arrangements linked to the TOC. Readers may refer to Chapter 27 for details about how a TOC is arrived at. The process of identifying needs that can be articulated by, or on behalf of, legitimate stakeholders lies at the heart of value measurement, monitoring and value assessment of project performance. This more holistic definition of the value the project helped to strategically deliver and frame the performance measurement system. Project-outcome deliverables may be grouped into triple bottom-line (3BL) elements. Elkington (1997), a seminal writer on the 3BL concept, envisaged success in terms of a more holistic sense of sustainability that encompasses a commercial bottom line (financial sustainability), a social bottom line (social sustainability) and an environmental bottom line (environmental sustainability). This concept has taken hold and expanded over the past two decades, with the United Nations recently producing 17 goals for improving 3BL outcomes to forge a sustainable world2, and governments are now building in many of these into their project KRAs. Porter provides an argument for a broader consideration of value (Porter and Kramer, 2011) in discussing the concept of shared value as: the policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress. . . . Value is defined as benefits relative to costs, not just benefits alone. (Porter and Kramer, 2011, p66) 565

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Operationalising project performance Operationally, performance may be measured to track and influence delivery. This may be based on monitoring the project-output performance of work undertaken during the design and delivery phases. Post-delivery outcome performance may be evaluated using KRAs measuring the project impact.

Monitoring output and evaluating outcome performance Monitoring is perceived as a tool for measuring performance of an output with typical time–cost performance measures and PM tools, while assessment evaluation is based on outcomes and consequences (Crawford and Bryce, 2003; Crawford, 2004; AusAID, 2005; Steinfort, 2010; Steinfort and Walker, 2011). Both monitoring and assessment require two broad supporting mechanisms: processes and structure. First, there is need for process mechanisms for techniques, technologies and tools to plan, implement the plan, and then to then discern what the result of the action taken on the plan actually achieved. Second, there is need for organisational structures and governance arrangements to manage the processes involved. In this section we address question two, ‘How can we operationalise project-output performance?’ (Project-delivery governance features that drive high levels of performance.) We consider both monitoring and control because in IPD the focus is on the outcome in addition to the output. As discussed in Chapters 1 and 2, and indeed mentioned in numerous other chapters, traditionally delivered projects assume that the client/project owner has a handsoff relationship with the project delivery agent. The main difference with IPD is that the client/ project owner has a direct hands-on involvement throughout the project design and execution phases. This means that traditional PM relies on the client having decided what it wants and developing a brief to enable the project designers (usually architects or engineers for infrastructure projects) to develop the project-execution design and plan. The design team shapes the project end result and the delivery team executes the design plan to produce the delivered project output. An IPD project, in contrast, has the client instigating a more general plan in the form of a strategy to deliver its defined needs, often documenting this as the business plan, complete with identified KRAs. The client then works collaboratively with an integrated team of design and project-delivery participants to produce the project output: usually, and more recently, together with the project output’s operational management in a unified IPD team. Their consideration shifts from the project output to the project outcome and how effectively it will deliver the benefits identified in the project business case. Thus, for IPD projects, there will be a need for assessment evaluation as well as monitoring for control of the project delivery. This is why some KRAs relate to operational considerations such as improved traffic-flow network impacts on transport projects, or user satisfaction on projects such as hospitals or general public access projects. For example, the National Museum project in Australia had visitor satisfaction as one of its KRA measures. The project-delivery alliance had this KRA embedded as one of the measures of outcome success and surveys of users to that museum were gathered and used to determine part of the gainshare and painshare arrangements in the alliance (Walker and Keniger, 2002; Keniger and Walker, 2003).

Project performance processes Chapter 19 discussed project governance and the role of the project front-end process to establish the business case for the project, its approval, and how that leads to development of KRAs and 566

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the means to actually measure KRAs through the development of KPIs. Chapter 27 describes the process of developing the TOC that forms the basis for monitoring project-output performance and is used to develop proposed KPIs by the alliance team, which in turn impact the gainshare and painshare arrangements of the project alliance agreement (PAA). This subsection discusses KRAs and KPIs in detail and how they are used to monitor alliance performance and to inform the extent of gainshare and painshare incentives, applicable to a PAA. We then discuss the governance structure and arrangements that contextualise the KRAs and KPIs as performance mechanisms and, following that subsection, we discuss the incentive arrangements. Performance measures are critical in sending the most effective signals to project participants (and observer stakeholders) on the nature and scope of success criteria for the project output (its delivery) and its outcome (the benefit or addressed change that fulfils the identified stakeholder needs). The inclusion of the project-outcome impacts and consequences rectangle in Figure 26.2 serves to remind us that while it stands in the shadows, it is the real reason for delivering the project. Performance measures need to be carefully crafted to signal the positive intended impact of the project’s outcome. We have interviewed over 100 senior practitioners over several studies of alliancing and other IPD forms (Walker and Lloyd-Walker, 2011; Walker and Harley, 2014; Walker and Lloyd-Walker, 2015; Walker et al., 2015; Walker, 2016). Based on findings from those studies, we suggest that including an OP in an alliance team (who is sufficiently experienced and knowledgeable about project delivery to be able to adequately communicate the project-outcome strategy) will increase the probability of a united team mentality towards the project-outcome. A united team that includes a sophisticated OP, designer, project-facility operator, and project-delivery NOPs should form an integrated, clear understanding of the anticipated project outcome and its likely impact and consequences. A united, collaborative and integrated team approach allows discussion, debate, knowledgesharing, perspective-sharing and creative dialogue to intelligently question and challenge assumptions about the expected project outcome. This dialogue operates in the sense described by Senge (1990, p241) as challenging assumptions through a ‘creative tension’ debate. The aim of dialogue is to share perspectives and ideas to arrive at a common understanding and position rather than trying to impose a position through persuasion and advocacy. This IPD collaboration has potentially profound implications, as a number of our studies have revealed. The inclusion of the contractor and designer can lead to their helping the OP to better understand how to best frame KRAs that describe efficiency performance so that the KPIs are meaningful and that they genuinely measure the KRAs in the way that the OP intended. The facility-operator NOP may also have some insights to share about KRAs that could impact the project outcome from a user and operator perspective. The main advantage of the IPD approach to setting performance measures is that they have, as a united team, a clear vision of the project outcome and an integrated and coherent motivation and understanding of what ‘best for project’ might mean. The performance-governance processes and arrangement should provide the means to steer the project team in the desired direction towards project output and outcome success. Performance governance should also provide guidance on expectations of the project team’s behaviour needed to collaborate and deliver a successful project output to facilitate a successful outcome. Specifically, after consulting with stakeholders at the project front-end stage, a set of KRAs are developed. These measure the degree to which acceptable results are achieved by the MCOS level (Department of Infrastructure and Transport, 2011b, p30) so that a specific standard is set as the threshold of ‘success’. These are then operationalised into KPIs that describe the MCOS and indicate levels above and below that benchmark. For example, a highway upgrade project may have an ‘improve traffic flow’ KRA. This could be represented, for example, by the MCOS ‘to 567

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safely raise the existing peak traffic-flow performance period 7:00am to 8:30am by 30%’. This MCOS may be assessed using KPIs for numbers of vehicles, mean or median speeds between set points (junctions with on-off ramps for example), numbers of traffic-collision incidents, driversatisfaction survey results and/or a number of other agreed relevant measures that accurately and fairly represent true traffic-flow performance. These KPIs are usually developed through the alliance bid process and they are documented at the start of the project by the alliance team and then agreed upon with the project owner prior to formalising the PAA. They are often refined during project delivery because they are only a mechanism to best measure KRA performance. Their initial framing may often be found to be in need of improved clarity, accuracy or application during project delivery. KPI-monitored data (monthly, weekly or at whatever agreed period) may be presented in a variety of visual forms but usually follow some form of traffic-light model where green represents ‘on plan’, amber represents ‘potential warning’ and red represents ‘behind plan’. These may be presented as dashboard-type forms, bar charts or a range of other appropriate graphic forms, together with text that may describe in more detail progress and implications. The forms of presentation are similar for IPD to that usually presented for traditional projects but the KPIs relating to KRAs may be different. Geraldi and Arlt (2015) present a wide range of graphical communicating performance forms. As far as we know, monitoring the alliance performance based on a clear understanding of the elements and characteristics of collaboration has not yet been formalised. Chapter 2 in this book offers a mechanism, the use of the Collaborative Framework, both to benchmark alliancecollaboration performance and to produce a health-check-type assessment of team collaborative performance. We provide a brief description of how this may be achieved but interested readers should refer to Chapter 2 for more details. The Collaboration Framework is an empirically based model of collaboration within an IPD context. Details of the study and its results have been published for several years. The Collaboration Framework was initially described as the Relationship-Based Procurement (RBP) Collaboration Taxonomy (Walker and Lloyd-Walker, 2014b) and Walker and LloydWalker, 2014c) showed how it could be used to benchmark and monitor collaborative performance (together with details of the way that the 16-element framework is measured and the skills, knowledge, attributes and experience needed to perform at a high level – Walker and Lloyd-Walker, 2015). The measures used for each of the 16 elements are explained in Chapter 2 and so the purpose of the following is to illustrate how that tool may be used to monitor and evaluate collaboration. The approach has been used as a tool to investigate levels of collaboration. In one example, to compare and contrast levels of collaboration between two stages of a project development: at the design stage preparing for procurement as a highly collaborative design-alliance process and its subsequent delivery through a more traditional project delivery form (Walker and Rahmani, 2016). It has also been used on Norwegian projects to compare participant-collaboration performance on partnering projects (Børve et al., 2017). Figure 26.3 illustrates a hypothetical example of alliance-project collaboration monitoring. This may have followed a workshop process where alliance participants assess their original collaboration expectations and then later measure their actual collaboration performance against the 16 dimensions, using the measurement criteria suggested in Chapter 2 of this book. The purpose of Figure 26.3 is to present an example. The gaps between the dotted and solid lines indicate variances between expected and actual collaboration performance and, as with any monitoring visualisation tool, action would be taken to restore the situation to what was intended. The project-output performance monitoring and assessment process may be summarised as follows: 568

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Pragmatic learning-inaction

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Joint governance structure

4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Integrated risk mitigation & insurance Joint communication BIM etc

Substantial co-location

Expected Actual

Authentic leadership

Incentivisation

Trust-control balance

Consensus decision making

Commitment to innovate

No blame culture Common best-for-project mindset/culture

Figure 26.3  Collaboration performance (Source: adapted from Walker and Nogeste, 2008, p178)

1 The project owner establishes baseline planned MCOS-output objectives articulated through the use of KRA performance measures and this may be embedded within a bid proposal or contractual agreement. These KRAs would have been approved through a stage gate process presenting the business case for the project; 2 Shortlisted (usually two for a competitive TOC alliance) syndicates involved in an IPD (for example, alliance) proposal process develop performance measures as KPIs that measure the expected output KRAs performance measures; 3 The successful alliance proponent refines the KPIs with the OP to ensure that KPIs are used fairly and transparently to effectively monitor output performance and accurately enable the gainshare and painshare incentive to be determined. A similar process to this may be deployed to measure and evaluate project outcomes that immediately impact the project’s operational strategy. One example would be measuring traffic-flow performance after delivery of rail- or road-infrastructure projects, perhaps over a period of 12 months post-project delivery. Many projects will have outcome KRAs that may have associated KPIs that measure post-project-delivery performance, such as that for the National Museum of Australia alliance mentioned earlier (Walker and Keniger, 2002; Keniger and Walker, 2003). On other research projects that measured alliance performance (Walker et al., 2015), we focussed on MCOS KRAs that had been identified for 61 projects. It is interesting to note that more that 15 out of the 61 projects had evaluation KRAs to measure post-project impact. There were overlaps where several of the KRAs were nominated on each alliance project. The results of that survey, in terms of KRA-focus was that an ‘environment’ KRA was identified for 34 of the 61 projects; community for 32; stakeholder relations 22; quality 21; safety 19 and traffic 16.

Organisational performance-governance structures for project alliancing Chapter 19, on the governance of IPD projects, provides a detailed explanation of the way that governance is structurally enabled through two main coordination, monitoring and control committees. 569

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We briefly reiterate that explanation here in the context of performance and incentives. One main difference between IPD and traditional project-delivery forms is the institutional role played by an Alliance Leadership Team (ALT). Project alliance and other forms of IPD share similarities in terms of having a project-delivery level coordination and operational management committee. In alliances these are called the Alliance Management Team (AMT). In traditional project-delivery forms there is usually an AMT-like organisational structure but the way that the AMT operates is different to that of a traditional project-delivery form.

ALT and AMT coordination and performance mechanisms and roles The ALT comprises the alliance-participant home-organisation-based champions for the project. They are usually senior executives with extensive experience of managing projects and, in the Australian and New Zealand context, where alliancing has been used for several decades, ALT members often have PA experience as well. The ALT also contains the OP as an active and engaged member to link the project owner (usually a government department for infrastructure projects) with the united alliance team. The OP would have set the KRAs before the alliance formed, usually in consultation with subject matter experts within the project owner’s organisation or from external consultants. The ALT role is to strategically guide the project and oversee performance in terms of KRAs by facilitating their successful delivery. They do this through their high-level influence in their home organisation and their professional and commercial community. Their position and role often means that they have greater agency to authorise actions or additional resources from their home-base organisations. This enables them to speed up the resolution of project issues or to ease tensions. For example, a KPI for one of the KRAs may be showing early warning signals due to either having mismatched people in place for the project phase or perhaps there may be a lack of suitable resources at that time. The ALT member can usually address that issue quickly and with authority and so this helps to stop problems intensifying and enables swift action to remedy a deteriorating situation. Alternatively, it can enable taking rapid advantage of an opportunity. The ALT meets periodically, usually monthly, and ALT members frequently visit the site from their home base. The AMT operates in a similar manner to any other construction-project delivery form. It performs the roles of construction coordination, monitoring and control-operational aspects of the project-delivery phase. KPIs that are developed, refined and used monitor KRAs, and the AMT usually has representatives of all members of an alliance, including the OP (Department of Infrastructure and Transport, 2011d;2011b). Tactical and operational-level coordination, and control of KPIs associated with KRAs, is led by the alliance manager (AM). Having representation from each alliance-participant organisation enables them to effectively plan, monitor and control (output) progress. One feature of the AMT that differs from its traditional project-delivery counterpart is that the AMT is required to resolve issues through consensus. Another feature is the no-litigation clause in the PAA (Department of Infrastructure and Transport, 2011d;2011c). These features have advantages because when decision-making on serious issues is made by consensus, and there is a no-litigation provision, this not only encourages but enforces a no-blame workplace environment, so that problems can be flagged early on rather than hidden until they become obvious. This approach of consensus and no-blame is consistent, because if all participants agree to a course of action they cannot, logically, later attribute blame to others. This encourages greater discussion from multiple perspectives that may lead to better decision-making (LloydWalker et al., 2014). The team also resolves issues that cannot be dealt with by individual team members, perhaps because of lack of information, authority, or other conditions beyond their 570

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level of agency. The AMT’s meetings, where KRAs and their associated KPIs are discussed, take place in a workplace environment of openness, transparency and disclosure. The no-blame clause in the PAA protects people from retribution and the whole thrust of the ALT and AMT culture is to get problems out on the table so that they can be resolved, rather than fester. KPIs are closely monitored to ensure accuracy and, moreover, that when action is needed, the whole AMT can respond accordingly in a collaborative manner. A further coordination feature of alliancing and IPD in general is co-location. Teams are, as far as is practicable, located together, usually in a single complex of site-office accommodation. This not only encourages collaboration but also facilitates coordination. Co-location also relates to mental co-location as those in the team that are not physically co-located are usually ‘virtually’ co-located and linked through digital technologies to be able to communicate freely. Another aspect of co-location is power and information symmetry. Alliances and other IPD forms usually have hierarchical structures that are flatter and considerably less command-andcontrol-oriented so that it is easier for alliance participants to share perspectives on issues to arrive at common ground. Processes, structures and technologies are all geared to a unified team sharing a coordinated best-for-project vision for the project. Additionally, the PAA specifically states that there should be a no-blame work environment to allow difficult performance and planning issues to be openly discussed to encourage a problem-solving rather than for a reactive or crisis mentality to prevail (Department of Infrastructure and Transport, 2011d;2011b).

Illustrations of how the ALT and AMT engage in practice The following quotes illustrate the lived experience of how KRAs were developed and managed, and are taken from interviews from several research studies that we undertook in the recent past. Participant 20 from the Walker and Lloyd-Walker study (2015, p171) explained the formation of KRAs. She was the alliance manager for a project alliance and was an OP for that project. so the KRAs were initially developed by the owner very early on and massaged to death, might I say, but finalised at the time of agreeing the TOC as well, so . . . in the TOC had to reflect the KRAs that we had for the project and also had to reflect the initial business case of the project, so all of that alignment of value statements and value requirements had to be done at the time of TOC to make sure that what we were putting forward was going to meet the objectives that we had initially planned, but also was going to create that value that we had promised. This quote illustrates how the KRAs were formed. We provide another quote from that study by an alliance manager to illustrate what the KRAs measured. the KRAs were around reducing congestion, improving safety, improving connectivity and that improving connectivity is also about access control as well. Then community relations; so a very difficult community that we were living in, and socially very poor, and lastly, the integration with the maintenance regime. (Participant 34 in: Walker and Lloyd-Walker, 2015, p173) This above quote indicates that KRAs address outcomes as well as outputs. It was on a roadinfrastructure project in which the purpose of the highway upgrade was to ease congestion and improve safety. In another alliance, a program alliance (Walker, Matinheikki and Maqsood, 2018) forthcoming, interviewee LXR-2 referred to one of the KRAs for the level crossing removal 571

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package of projects for which he was the AM. This program of work to remove 50 rail crossings, with ancillary works such as railway station refurbishments and rebuilds, is an eight-year AU$8.3 billion program (Victorian Auditor-General’s Office, 2017). The Victorian Government created a client body to oversee the program, the Level Crossing Removal Authority (LXRA). With ten packages of work to deliver the program, there was scope for significant cross-learning across the program. To facilitate this aim for innovation diffusion, the LXRA established a joint coordination committee (JCC) of the alliance managers to meet and share innovations and reflections on practice. A formal mechanism for ensuring that JCC collaboration took place was the creation of a KRA for each alliance, relating to sharing practice that has been demonstrated to have been used by other alliance teams. Interviewee LXR-2 made the following comment: I sit on the alliance managers’ sub-committee. The JCC . . . is all very senior people from all other programs and projects, and then underneath there there’s subject matter expert groups, there’s an alliance manager group, there’s a sustainability group, a design group, a construction group, and all of these equivalent positions from the different projects meet. But up until now - until this last program has been awarded – we’ve all been in competition with each other to win projects, so now is the opportunity; now that all the projects are awarded we’re not competing anymore – at least not to win projects, but competing to be better than each other, which is healthy – we can now turn up and we can share ideas and we can talk to each other and we can say ‘well how is your project..?’ Interviewee LXR-1, another AM for one of the other alliance packages, explained the KRA for innovation diffusion as follows: There is innovation, and that’s KRA1, and then 1.1 is ideas, 1.2 is execution of those ideas, and then 2 is continuous improvement and efficiency. So, that one is about us getting more efficient in how we deliver them in demonstrating cost improvements from package to package to package. The LXRA Program of alliances appears to use KRAs and KPIs to drive innovation in a structured manner that is linked through the KRA performance to the incentive arrangements. A good example of this was an alliance that was embedded within a public–private partnership (PPP) project in which two joint-venture contractor participants in the PPP had formed an alliance with the services contractor to undertake the highly complex tunnel fit-out works. The alliance allowed for much flexibility in work sequencing and resourcing the work. The overall project director was interviewed and he commented on how the KPIs for time and cost were handled through this collaboration, when it became clear that there were issues around a very crowded workplace and the way that mechanical and electrical works were integrated with civil work. This comment indicates how the KPI triggered collective AMT action within the alliance rather than might occur in a traditional design and construct (D&C) approach, for example, where typically there might be evidence of blame-shifting and inaccurate or mistimed reporting of output performance. at times they [the alliance participants] were able to switch scope between the parties so that they would – say if some civil works were holding up the M&E team, ‘Well, okay, we’ll do those works to make sure that it gets integrated with the work we’re doing’, and they’ll do it rather than just complain about somebody else not doing it. And that kind of flexibility I think was characteristic of the arrangement. (Participant 22 in: Walker and Lloyd-Walker, 2015, p220) 572

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We see from this example that KPIs were treated as a device to help monitor project progress, but in a positive way so that their purpose was mainly to identify potential challenges and to trigger corrective collective action rather than be a finger-pointing blame exercise to drive action by only one party in rectifying slipping output performance. The ALT and AMT relationship is also important in IPD alliancing as, again, the emphasis is on collective integrated effort to avert problems rather than a strictly reporting hierarchical relationship. The ALT can often help solve systemic problems faced by the AMT that are outside their control or direct influence. This helps the collaborative and integrated steering of performance rather than enforcing action or punishment for slipping output performance. Establishing common ground between disciplines and between the ALT/AMT governance structure is clearly evident in alliancing, as participant P28 in the Walker and Lloyd-Walker (2015, p204) study observed: We did spend a lot of time early in developing the AMT/ALT relationship and we had a lot of dual meetings for a while, especially trying to set the ground rules and early in the project we’d focus on the culture and that. For four weeks or something like that and times of adversity like that pulled people together, we reset all our targets, we took it on the management team to refocus people and set where we’re going. Risk and opportunity management are also managed in an integrated manner in alliances. One advantage of this is that, because of the no-litigation clause and the client largely assuming overall risk, there is a project-wide insurance policy rather than each participant taking out their own insurance (Department of Infrastructure and Transport, 2011a). This not only saves money but engenders trust and confidence between team members. We now offer an answer to question two posed in this chapter’s introduction: How can we operationalise project-output performance? (Project-delivery governance features that drive high levels of performance.) Monitoring output performance and evaluating the project outcome is accomplished through: 1 2

3

The development of KPIs by the ALT and AMT, providing effective, relevant and useful measurement tools to ensure that KRAs are adequately addressed. The ALT governance structure provides a strategic vehicle as well as providing senior level NOP access to their ‘home-base’ organisations providing a rapid response to clarify issues or make commitments to quickly solve emerging or foreseen future issues. This structural mechanism helps to reduce potential time delays in taking action and increases levels of participant organisations’ commitment. The unique consensus and no-blame characteristics of alliancing encourage wider and wiser discussion of emerging and foreseen issues and this makes alliances operationally strong in terms of versatility and responsiveness.

A further coordinating governance arrangement is the incentivisation provision of the PAA. What helps coordinate the alliance team is that the KRAs apply to project performance as a whole and KPIs are not measured against any one team but the PA team as a single entity. The TOC, as explained in more detail in Chapter 27 of this book, establishes the baseline cost, time and other minimum satisfactory criteria as defined by the KRAs. The incentivisation part of the PAA sets out the agreed percentage that each individual participant team is exposed to in terms of any gain- or painsharing resulting from deviations from the TOC. This not only motivates participants to collaborate but to also coordinate their activities to ensure that the end project 573

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result is favourable. It becomes pointless to pursue an uncoordinated agenda based on any one team’s individual goals if that jeopardises the end result.

Linking project-output performance to an incentive scheme The main advantage of IPD projects, and alliancing in particular, is that they specifically address the alignment of objectives to unite the project-delivery team through the terms of the project alliance agreement (PAA) that stresses the ‘we’ not the ‘you’ language in requiring that the alliance team as a united entity is responsible for delivering the project and that any gainsharing and painsharing through incentive-agreement clauses is based upon performance measured against the whole project result and not the constituent parts that each team contributes to (Ross, 2003; Department of Infrastructure and Transport, 2011d;2011c; Ross, 2013; Ross et al., 2014; Department of Infrastructure and Transport, 2015). This requirement sets alliancing and IPD apart from traditional project-delivery forms because it specifically focuses on governance arrangements that not only support collaboration towards united goals and objectives but it requires that level of integration.

The gainsharing and painsharing incentive model Alliancing provides a specific form of IPD in which the PAA is written and explicitly aimed at achieving a best-for-project result. The ‘we’ rather than ‘you’ language ties performance to the project result rather than individual NOP performance and so this encourages and motivates NOPs and the OP to share a common and united best-for-project mindset (Department of Infrastructure and Transport, 2011c). This is because if one participant member of an alliance is struggling then it is in the other alliance participants’ best interests to help the struggling participant to solve whatever problem is inhibiting their performance. They share in the project result as measured by the KRAs and KPIs and these express the expected benefits of the project strategy. As mentioned above, KRAs include highly output-focussed aspects. For example, within the TOC, delivery time, specified safety and environmental standards are specifically included as TOC KRAs. They also include other KRAs mentioned earlier, such as the innovation-diffusion results for other projects within the Level Crossing Removal Program mentioned above by interviewee LXR-1. These kinds of incentives permit benefits to be realised at a network or program level rather than being restricted to the project level and we are seeing a trend towards program alliances in Australia where packages of similar projects are bundled into a program alliance (Walker and Harley, 2014). We also see KRAs that target benefits for local communities and regional public stakeholders being adopted and forming part of the incentive arrangements. For example, the Sugarloaf Pipeline Alliance in Victoria (Smith et al., 2010; Melbourne Water, 2014; Lloyd-Walker and Walker, 2017) delivered considerable additional benefits than merely providing a water pipeline from a large dam to a major city’s water-distribution network. Benefits included improved environment, local support for various community activities, and even vital assistance in fighting a major bushfire outbreak. The incentive arrangements, therefore, stretch beyond simply the TOC sharing of cost gain or pain or direct incentives on delivery-time savings or slippages. Each PAA is crafted to suit the project’s strategic purpose and the alliance syndicates agreed within-syndicate gain- or painsharing. We now illustrate how the cost and time gainsharing and painsharing arrangements are structured. Figure 26.4 illustrates the alliancing incentive model. The TOC comprises all direct project costs that is paid for by the project owner together with the NOP profit margin and their corporate overhead. The NOP’s profit and overheads are placed ‘at risk’ to cover any failure to achieve the 574

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Cost under run (gain)

PAA KRAs and they are capped. Note that cost and time under-runs are not capped. This has led to criticism in some quarters, particularly where the original project business case is considered to be of dubious quality and where the OP is perceived as lacking the ability to robustly participate in the TOC-development process (Tamburro and Wood, 2014). Figure 26.4 also illustrates indicative gain- and painshare. Participants, including the OP, often take different ‘at risk’ percentages in their PAA. In the National Museum of Australia for example, the OP used its gainshare to reinvest in the project to improve the quality and range of exhibits and the incentive model was considered appropriate and fair to alliance participants (Auditor-General of the Australian National Audit Office, 2000, p86). The TOC forms the baseline case for cost and time delivery. The TOC process is explained in more depth in Chapter 27 and so we only briefly sketch out salient aspects of the process and model here. The first aspect that needs to be stressed is that the TOC is the agreed cost target for the expected completion of the project and delivery-time target. An alliance is not a cost plus contract. The OP does accept responsibility for payment of all direct project costs as well as an agreed NOP fee, to compensate them for their expertise and involvement and this does appear superficially as a ‘cost-plus’-type arrangement rather than a highly commercial one. However, both the participant-selection process and the TOC-development process, as detailed in Chapter 27, are rigorous, robust and highly competitive. NOPs are selected on the basis of their demonstrated expertise, collaborative capacity and their fee structure (Walker et al., 2002; Department of Infrastructure and Transport, 2011d). The TOC is also not a ‘soft’ target but a firm end-of-project cost target that cannot be changed by the alliance participants, with the exception of a major scoping incident approved by the project owner, and these are

Target Outturn Cost

Projectspecific overhead

Risk capped to profit and overhead

Indicative gainshare and painshare for each NOP based on their agreed formulae in the PAA NOP 1

Direct project costs

Project costs component

Corporate overhead

Cost overrun (pain)

100% at risk component

NOP profit margin

Gainshare is uncapped

NOP 2 NOP 3 NOP 4 NOP 5 NOP 6

Figure 26.4  Incentive model (Source adapted from: Ross, 2003, p7 content)

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extremely rare. There is an expectation that the governance arrangements and performancetracking systems in place, as discussed above, maintain the focus of the alliance team on steering towards that TOC. Where deviations are identified early on, and through the delivery cycle, rapid action is taken to keep the project on track for the TOC. Problems that crop up are dealt with through collaborative action, and the provisions of consensus and no-blame, combined with KRAs relating to demonstrated innovation, facilitate considerable resilience. From the many interviews in our research on alliancing we can conclude that the PA form drives unity of action, transparency of problems and opportunities and innovation, and thus resilience and recovery from inevitable deviations from ‘the plan’. A further incentive provided by the PAA is that the project owner takes out a project-wide insurance policy that replaces the participant organisation’s insurance requirements. This works out less expensive that the summation of the participants’ insurance costs. This approach was also adopted for the British Airports Authority Terminal 5 project (Doherty, 2008). A number of academics (Love et al., 2011; Lahdenperä, 2014;2015; Lahdenperä, 2016), practitioners (Ross, 2003; Ross et al., 2014) and government agencies have written about the gainsharing and painsharing models (Department of Treasury and Finance Victoria, 2006; Department of Infrastructure and Transport, 2011d). All agree that the PAA and the incentive model provide a robust and fair mechanism for ensuring a clear focus on achieving the intended output and outcome. Question 3 in this chapter’s introduction asked: How do we best link project-output performance to an incentive scheme that motivates and facilitates the successful delivery of the project? (Project-delivery monitoring and evaluation performance signals that motivate people to achieve high levels of performance.) In summary, the section above answered the question as follows: 1

2

3

4

5

Managing the project as a single united alliance team is accomplished in part by the legal agreement that stresses ‘we shall . . .’ rather than the fragmented, diffuse responsibility and accountability of participants to ‘their portion of the works’ through contract agreement terms such as ‘You shall . . .’. The TOC process results in a clear, firm and achievable outturn cost and time target and the other KRAs are also expressed in explicit and strategically specified terms. The alliance team therefore ‘steers’ their way toward the target. The PAA allows greater agency and freedom of tactical action and so this motivates participants to be innovative and flexible and demonstrate resilience in regard to deviations from ‘the plan’. The OP takes an active and robust role in the alliance across all phases. By sharing in risks and opportunities, the team ambience is able to demonstrate that all alliance participants are collaborative, cooperative, responsive and resilient (Walker and Lloyd-Walker, 2014a). The gainsharing and painsharing model, as illustrated in Figure 26.4, incentivises all participants to be accountable and responsible as a single united team to achieve the alliance aims and objectives, as operationalised through the TOC process. The PAA and commercial model specifies how gain or pain will be shared, including the agreed percentage borne by each alliance participant. The integration of a governance framework clearly states the rules. The PAA-specific wording, in collaborative terms, creates the norms adopted by alliance participants. The selection and TOC-development process shapes the way that participants interpret the rules and KRAs based on the norms generated through the PAA. This creates and influences the institutionalisation of behaviour and action through the regulative, normative and cultural-cognitive pillars as described by Scott (2014). This institutionalised behaviour and action sets alliances and other similar IPD forms of project delivery apart from the business-as-usual delivery approach. 576

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Conclusions This chapter focussed on performance and incentive management. Several important concepts were discussed. Two perspectives of success: the project output and its outcome, shaped discussion on what success might look like from the point of view of proximal and distal stakeholders. The chapter illustrated and explained how project output and outcome performance is operationalised through the specification and development of KRAs and KPIs. It also explained the role of the ALT and ATM as a governance measure to monitor, control and actively assist in project-delivery performance. The chapter also provided a detailed description of the incentivisation model and explained its rationale and how it operates in practice.

Notes 1 Currently described as the The Department of Infrastructure, Regional Development and Cities at the time of writing, April 2018. 2 See URL https://en.wikipedia.org/wiki/Sustainable_Development_Goals for details.

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IPD performance and incentive management MacDonald, C. C. (2011). Value for Money in Project Alliances. DPM, School of Property, Construction and Project Management. Melbourne, RMIT University. MacDonald, C. C., Walker, D. H. T. and Moussa, N. (2013). “Towards a project alliance value for money framework.” Facilities. 31 (5/6): 279–309. Melbourne Water (2014). Annual Report to the Federal Department of Environment: Sugarloaf Pipeline Project November 2014, Melbourne, Melbourne Water: 44pp. Merrow, E. W. (2011). Industrial Megaprojects – Concepts, Strategies, and Practices for Success, London, John Wiley & Sons. Morris, P. W. G. (2013). Reconstructing Project Management, Oxford, Wiley-Blackwell. Morris, P. W. G. and Jamieson, A. (2004). Translating Corporate Strategy into Project Strategy: Realizing Corporate Strategy Through Project Management, Newtown Square, PA, PMI. Murray, P. (2004). The Saga of Sydney Opera House: The Dramatic Story of the Design and Construction of the Icon of Modern Australia, New York, Spon Press. Neeley, A. (1997). “A practical approach to defining key indicators.” Measuring Business Excellence. 1 (1): 42–46. Neeley, A. (2002). Business Performance Measurement – Theory and Practice, Cambridge, UK, Cambridge University Press. Patanakul, P. and Shenhar, A. J. (2012). “What project strategy really is: the fundamental building block in strategic project management.” Project Management Journal. 43 (1): 4–20. Porter, M. E. and Kramer, M. R. (2011). “creating shared value.” Harvard Business Review. 89 (1/2): 62–77. Ranji, S. R. (2014). “What gets measured gets (micro)managed.” JAMA. 312 (16): 1637–1638. Ross, J. (2003). Introduction to Project Alliancing. Alliance Contracting Conference, Sydney, 30 April 2003, Project Control International Pty Ltd: 43pp. Ross, J. (2013). Gainshare/Painshare Regime – guidance paper with sample model/drafting. www.pci-aus. com/Downloads/PCI_Gainshare-GuideModel_A_07Feb2011.pdf. Ross, J., Dingwall, J. and Dinh, H. (2014). An oVerview of Collaborative Contracting: Making Collaboration Effective and Choosing the Right Framework, Melbourne, PCI Group: 17pp. Sage, D., Dainty, A. and Brookes, N. (2011). “How actor-network theories can help in understanding project complexities.” International Journal of Managing Projects in Business. 4 (2): 274–293. Schindler, M. and Eppler, M. J. (2003). “Harvesting project knowledge: a review of project learning methods and success factors.” International Journal of Project Management. 21 (3): 219–228. Scott, W. R. (2014). Institutions and Organizations, Thousand Oaks, CA; London, SAGE Publications Inc. Senge, P. M. (1990). The Fifth Discipline – The Art & Practice of the Learning Organization, Sydney, Random House. Shenhar, A. J., Dvir, D., Levy, O. and Maltz, A. C. (2001). “Project success: a multidimensional strategic concept.” Long Range Planning. 34 (6): 699–725. Shenhar, A. J., Milosevic, D., Dvir, D. and Thamhain, H. (2007). Linking Project Management to Business Strategy, Newtown Square, PA, Project Management Institute. Smith, S., Anglin, T. and Harrisson, K. (2010). Sugarloaf Pipeline: A Pipe in Time, Melbourne, Sugarloaf Pipeline Alliance, Melbourne Water. Steinfort, P. (2010). Understanding the Antecedents of Project Management: Best Practice-Lessons to be Learned from Aid Relief Projects. PhD, School of Property, Construction and Project Management. Melbourne, RMIT University. Steinfort, P. and Walker, D. H. T. (2011). What Enables Project Success: Lessons from Aid Relief Projects, Newtown Square, PA, Project Management Institute. Tamburro, N. and Wood, P. (2014). “Alliancing in Australia: competing for thought leadership.” Proceedings of the ICE – Management, Procurement and Law. 167 (2): 75 –82. Tryggestad, K., Justesen, L. and Mouritsen, J. (2013). “Project temporalities: how frogs can become stakeholders.” International Journal of Managing Projects in Business. 6 (1): 69–87. Turner, J. R. (2009). Project Success and Strategy. The Handbook of Project-Based Management: Leading Strategic Change in Organizations. Turner J. R. New York, McGraw-Hill: 111–126. Victorian Auditor-General’s Office (2017). Managing the Level Crossing Removal Program, Melbourne, ISBN 978 1 925226 58 4 101. Walker, D. H. T. (2016). Understanding the Alliance Target Outturn Cost Process and its Implications, Melbourne, Australia, Centre for Integrated Project Solutions, School of Property, Construction and Project Management, RMIT University: 77pp.

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27 IPD AND TOC DEVELOPMENT Derek H. T. Walker and Alan McCann

Introduction An important feature of integrated project delivery (IPD) arrangements is the way in which the work to be performed is scoped and budgeted, with estimated costs established, managed and controlled. Integrated Project Delivery (IPD) in its Australian/New Zealand alliancing form, and the United States of America (USA) Level 3 IPD form, requires deep collaboration of participants when establishing the project’s scope and cost model. Terms used for project cost estimates can be confusing, misleading and lead to conflicting interpretations of a project’s actual cost performance. We explain the various concepts of cost in this chapter to allay some of the problems associated with our conception of what project cost actually means. The way that the estimation and budgetary control is managed is also discussed in this chapter. Inevitably, cost is closely bound to scope definition and so we discuss cost-estimate setting in conjunction with the project scope and delivery method decision-making process in order to deliver the scope at a best-value cost. We focus in this chapter on explaining how project cost is established and how it is conceptualised for IPD projects. We have based our attention on the processes of developing the Target Outturn Cost (TOC) because we discovered during our literature review for this chapter that there is scant information or peer-reviewed literature that explains how these TOCs are developed. To illustrate our discussion more fully we provide an example of how a TOC process operates through an example from alliancing in Australia.

Background The development of a project’s scope and its cost estimation follows a highly complex process with initial estimates of scope and cost being made based on an identified benefit to be delivered. Examples of a benefit could be to improve efficiency in road transport, medical services, educational services, etc. As we have seen in Chapter 19, many projects have front-end governance arrangements that include a stage-gate process from the project’s conception through to the point at which it is approved to proceed. 581

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In the UK, for example, the Office of Government Commerce (2007b;2007c;2007a) has had a stage-gate process in place and its example has been adopted and adapted in numerous countries such as in Australia (Department of Finance and Deregulation, 2009). In Norway, the Concept approach has been in use for many years (Williams et al., 2009; Samset et al., 2014; Samset and Volden, 2016). The principal followed has been that a rigorous business case is developed to justify a project’s real need, its validity in delivering the value that justified its purpose, and its sustainability and viability. Business-case costs and benefits are considered and evaluated. Important elements include the project’s estimated capital expenditure (CAPEX), operating expenditure (OPEX) and its timeliness in delivery to meet the stated need as well as other foci, such as meeting environmental and social objectives. Benefits considered include both tangible and intangible, monetised and inferred. This cost–benefit approach has been recently demonstrated in the business case submitted for the removal of 50 rail level crossings in Melbourne Australia (Victorian State Government, 2017). That particular business case may be considered somewhat standard and typical of government promoted infrastructure projects in many parts of the world. The rail level crossings removal program of projects includes monetised benefits such as: •• •• •• •• ••

The value of time saved by motorists who currently find themselves waiting at rail level crossings while the boom gates are closed; The value of improving the rail network’s effectiveness and efficiency through road/ rail-grade separation by cuttings or overpasses in conjunction with signalling upgrades, thus allowing more frequent rail services; The value of avoiding tragic accidents based on safety improvement estimates of associated past train/vehicle collision costs; The value of improved amenities, increased property value and improvements in qualityof-life factors, including creating parkland where rail tracks are relocated above ground (Victorian State Government, 2017); Integrated development opportunities (IDOs) for commercial buildings, etc.

The ‘benefit’ element in a ‘cost–benefit’ study can be treated narrowly, in purely monetary terms, or more broadly to attempt to capture the nature of value of more intangible and inferred-value elements such as health, personal satisfaction (or discomfort reduction) and contributions to environmental health and the social well-being of communities served by these projects. We set aside consideration of these benefit-value elements in this chapter as readers may read more on this aspect in Chapter 4. Here we focus on how a project’s cost is assessed, estimated and considered. This chapter links to Chapter 25, which discusses project funding and incentive arrangements where the gain/painsharing arrangements are dealt with more fully, and to Chapter 26, which deals with key performance areas (KRAs) and key performance indicators (KPIs) that are used to measure performance and determine the level of incentivised gainsharing or painsharing.

What do we mean by the project cost? One would think that the project cost should be simple to define and understand. Unfortunately, this is not so. We are faced with understanding exactly what we mean by the term ‘project cost’ and how we should conceptualise it. Several forms of project cost are often used, and confused, within the context of traditionally delivered projects and the term Target Outturn Cost (TOC) is often misunderstood by many in the construction industry, general public, observers and commentators. We follow the four stages cited by Winch (2002, p234) in Table 27.1 to illustrate the traditional concepts of cost: 582

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As indicated in Table 27.1, the initial estimated cost can end up substantially different from the actual completion cost for several reasons including but not limited to: 1 An unrealistic ‘announceable’ cost is mooted, often for political reasons, which is either intentionally misleading or represents an unhealthy optimism bias (Flyvbjerg et al., 2002; Flyvbjerg, 2009); 2 Much is unknown at the initiation stage and so the scope, scale and many contextual issues may result in changes in the project concept cost when compared with the end result; 3 Interfaces between the project being considered and others may be unknown or poorly understood. For example, a new train-line work may require major upgrades in signalling across an entire network. Other compatibility and operability issues may arise; 4 Winch’s (2002, p234) project-stage accuracy ranges in Table 27.1 are suggested for construction projects procured using traditional project-delivery mechanisms where estimated costs are developed in isolation from the advantage of a fully integrated team of designers and contractors with the owners representative (OP), and so the project scoping and design fails to gain insights and knowledge benefits from all parties, including owner-participants (OPs) and non-owner participants (NOPs). Table 27.1  Concepts of project/program costs Cost-type name

Meaning

Notes and comments

Initial announced estimated cost plan at the briefing stage.

At the initiation stage, when approximate scope and costs are announced, possibly with a business case. The cost plan may include all potential project costs, including land acquisition, project management by government agencies, contingency, etc. After developing the design to a stage where its scope and cost can be estimated more accurately to test the market with.

These are always understood as tentative and typically the estimate is assumed to be accurate to +/– 30%. Announcements are also generally more focussed on the initially identified benefit and therefore possibly understated.

Budget cost at the scheme design definition stage.

Contractual commitment cost at tender stage (TOC).

After market testing, a contract is committed to, which explicitly specifies the scope and cost. This is expected to be the final delivery cost should there be no authorised change in scope during the project-delivery phase.

Actual Outturn Cost (AOC) at completion.

The final cost for all projectdelivered works that were contracted for.

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This is normally stated within a narrower range, perhaps +/–20%, but with a hidden margin of safety-contingency reserve. Scope and benefits have been more thoroughly identified by this time. Going to market with a +/–10% range is standard for traditionally procured projects. There may be some negotiation around a tendered sum for more traditional approaches. Often the client owner participant (OP) expects to cost-manage this contract sum with adjustments for any additional escalation or authorised variations. It is assumed that the completed cost has +/–0% range on completion. This completion cost would not include many OP costs such as moving-in costs, operational equipment, training, etc.

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For many decades, referring to similar completed projects with known actual costs has been a common practice, using cost-planning techniques developed by the quantity surveying profession for building works (Brandon et al., 2007). In the case of large-scale infrastructure projects, Flyvbjerg recommends the use of reference-class estimation (Flyvbjerg et al., 2002; Flyvbjerg et al., 2003; Flyvbjerg, 2009). Reference-class estimation considers historical, actual end costs of projects that share similarities to a project being considered. These similarities may be in the type of project, technology, and other contextual aspects. Merrow (2011;2012), a leading specialist cost consultant for heavy engineering projects, has recommended this approach for hydrocarbon and mining-sector projects. Conceptual estimates are only budget cost-plan estimates. They are, therefore, merely intelligent guesses that are assumed to have a confidence range plus or minus X% being based on a set of assumptions. As the project definition and design becomes more developed, with more certainty being created as assumptions are made explicit and probed, and as the context, technologies, processes and other cost-impact factors become clearer, then the confidence-range band of X% shrinks. This usually happens accompanied by the project’s proposal passing through a stage-gate process (Office of Government Commerce, 2007a). The end result of this process is that a project conceptual-budget estimate is determined, probed and sanctioned. The project owner should also include the cost of fees, including initial design and development, sundry administrative, and various permit fees, together with a contingency figure to cover unforeseen and unavoidable unexpected additional costs that cannot be identified until the project is underway. The project owner may not make these figures known and retains confidential monitoring and control, usually through the offices of an internal or external cost consultant. Thus the public usually see reports about Project X as having a budget of $Y and do not appreciate that this budget is subject to accepted likely variation adjustment in line with its contingency figure and the real project context as it unfolds. The first public misconception that often occurs is that a project with a budget of $X will actually cost $X. News-media commentators, politicians in opposition to a government engaged in project delivery at the time of its delivery, plus a range of bystander ‘experts’ and non-experts often gleefully publish reports that the anticipated project cost was grossly inaccurate. This is widely believed by practitioners to be due to either a grossly inflated budget (if it actually is delivered under the budget $X) or was incompetently managed (if it actually is delivered over the stated and published $X budget). Gil (2017, p281), a scholar who has studied many megaprojects, makes a highly pertinent point: Evaluating the performance of a megaproject against the targets set at the onset of planning is therefore unduly harsh. It misses the point that the initial plans, insofar as they build upon assumptions that are true to what bounded rational actors know at the time and optimistic within reason, merely aim to get the ball rolling. These initial performance targets cannot, however, offer accurate forecasts as to the outcome of consensus-oriented searches for solutions.

Why might the cost appear to increase and suffer from ‘scope creep’? Love et al. (2016) undertook a study of cost overruns in transport infrastructure projects. They question many much-cited studies that try to compare and to concatenate data on cost overruns between various countries. A point they make is that any lack of standard, such as even defining the point at which a cost estimate becomes ‘the estimate’, varies drastically between countries, between eras within a country and even within organisations. This and other lack of standards 584

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makes comparison and concatenation of data across locales, time periods or organisations highly suspect, problematic and misleading. The reference point is set at the time at which the cost figure is set. The process of cost setting, however, continues because, at the reference point, less is known about requirements, scope, need, and what is valued and seen as valuable, to include in the project scope, along with what the cost of project elements may be. This should be obvious and self-evident: that naturally comparing costs over time, between countries, regions or even within organisations is replete with paradoxes, uncertainties and inconsistencies. Yet much of this literature begins with a statement to the effect that cost overruns are endemic and universal. Instead, Love et al. (2016) offer two schools of thought as potential ways to understand this much misunderstood concept. First they (2016, p185) draw to our attention to: [the] ‘tendency for Governments to anchor themselves to the initial budget estimate and subsequently inform the public of the estimated cost of a project without providing any form of proviso. The time between the establishment of the initial budget and the letting of contracts for construction may be lengthy; prices of materials and labor can increase’. And that ‘Sometimes scope changes may account for up to 90% of what are traditionally called “overruns”’. (Auditor-General of Western Australia, 2012, p8) This supports a theory of evolutionary cost change as the project stakeholders and participants negotiate what to include or exclude, design options, delivery methods and many other incremental issues that are resolved and/or postponed. These point to a complicated and complex dialogue involving stakeholder engagement, design management, cost-estimate management, construction buildability and general scope and needs definition management. The second school of thought relates to what they refer to as ‘the ‘Psycho Strategists’ (i.e., which is a combination of psychological contributors and business strategy) attribute overruns to deception, planning fallacy and unjustifiable optimism in the setting of initial cost targets’ (2016, p185). They cite proponents of this school, such as Flyvbjerg (Flyvbjerg, 2014; Flyvbjerg et al., 2002;2003). This school of thought argues that optimism bias and strategic lying are root causes where politicians and project proponents purposefully underestimate cost and overestimate benefits in order to start the project. Once such a situation has been allowed to begin then rarely is the project cancelled when cost blow-outs become evident, because many project participants and stakeholders feel that there has been too much cost sunk into it to abandon the project. The process of judging what a project cost ‘should be’ can be seen as the project being potentially regarded from an inside or outside view. The ‘inside view’ may be distorted in a number of ways. Loosemore (2000) discusses crises, with one form being a creeping crisis that sneaks up on everyone. The root cause may be discernible through early warning signs but people either ignore the signs or fail to perceive them as relevant. This is what Love refers to as pathogens (Love et al., 2009) and, as Eden et al. (2005) note, costs can increase with amoebic growth. Sometimes actions have adverse and unintended consequences that lead to further costs and rework (Love et al., 2000). The ‘outside view’ may be taken when the frame of reference is shifted from the project in question to what is referred to as a reference-class completed project that bears sufficient similarity to it to be comparable and so has an end cost that is expected to be similar (Flyvbjerg, 2007;2009). However, this approach is not without its problems because the reference point for the comparison project now becomes its end cost. Flyvbjerg and his colleagues (Flyvbjerg et al., 2003) argue that using a reference-class cost comparison provides a more likely and rational cost 585

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to work towards. This may, however, lead to a self-fulfilling prophecy and perpetuate problems associated with the reference project. For example, the reference project may have been poorly managed with waste and rework or a range of other issues may have beset it. Perhaps having a deep and honest understanding of a project’s context, the stakeholder issues involved, a better understanding of value and what is valued, may lead to a better inside–outside view? Alliancing potentially has the processes to do this. A particularly pervasive, misleading and inaccurate reporting of the budget journey may occur during initial stage-gates as the project is developed from its concept to its more tangible form to be delivered. Much of this problem lies with an increase in scope definition and it is particularly prevalent with megaprojects, as noted by Drummond (2017). She explains that one driver of increase in scope may be psychological, by refusing to believe or to accept warnings about risk and uncertainty but instead blindly continuing and hoping for the best. The infamous TAURUS information technology (IT) project that was eventually abandoned in 1993 after the London Stock Exchange had spent £500 million (Drummond, 1998), illustrates how a project can turn into an expensive disaster. Drummond highlights social drivers, such as saving face, which combine with organisational drivers, such as the way that projects may be driven by their own momentum, supported by inadequate means to question scope creep, and that lead to a budgetary ‘runaway’ project. This may be associated with a psychological tendency in people to assume that a ‘budget’ is real and so if the cost exceeds that budget figure they feel cheated, misled or somehow tricked (Kahneman, 2011, p287). Kahneman refers to this tendency as ‘prospect theory’. People anchor a defined point (for example a budget) as a truth and if the cost exceeds this figure they feel aggrieved and believe that somehow any budget blowout is due to the fault of others. A significant insight to be gained from the above discussion is that it demonstrates that the term ‘budget’ may be misleading because it often fails to acknowledge the validity of changes over the project development-and-delivery life-cycle and that any scope creep may also result in value creep. We should be careful about what we mean by the term ‘budget’ at any specific stage of its life-cycle, the relationship between budget costs, and the value of the expected benefit and assumptions made about both costs and benefits. Scope creep may result from changes in the whole character of a project where the original project concept is consolidated into a program of linked and strategically integrated projects that perhaps add greater value as a consequence of their amalgamation. Consider the 2012 London Olympic Games as an example of the system integration of complex and interrelated projects within a program of projects (Davies and Mackenzie, 2014; Gil, 2017). The program began its life-cycle with the brief being purely to deliver the facilities for the Games events, including upgrades and new sporting facilities required to support them. However, subsequently the project scope expanded to include additional transport infrastructure to accommodate visitors as well as taking advantage of a whole urban-renewal program. It would be misleading to expect that the first 2012 London Olympics ‘budget’, when the right to host the Games was won, would not be amended once the scale of the endeavour and consequential opportunities for value-capture became clearer. The later manifestation of the ‘project’ (really a program of linked, strategically complementary projects) was completely different in scope to the initial project concept, other than inclusion of the originally identified 2012 Games venues and facilities. The program of projects provided opportunities for project-systems integration to be pooled across several main programs of projects coordinated by the overarching authority, in this case the Olympic Delivery Authority (ODA). The ODA ‘acted as the client for the programme and CLM – the

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temporary joint venture between CH2MHill, Laing O’Rourke and Mace – which was formed specifically to act as the ODA’s “delivery partner”’ (Davies and Mackenzie, 2014, p778). The ODA was better able to integrate the efforts and energy of the individual projects within the program to optimise the whole program outcome rather than have ‘star’ project performances for some venues and facilities with poor or average performance for others. The Olympics’ success relied on its program achievement rather than its individual projects’ separate achievement. Gil (2017) undertook a detailed study of The London 2012 Olympics, Heathrow Terminal 5, Crossrail and High-Speed 2 in the UK, with a focus on how the megaprojects developed as massively scoped programs of work usually involving a number of sponsors, each with their own goals. Stakeholders shaped and managed goals through a shared governance arrangement, featuring strong interdependence to ensure that the ‘whole’ (program) was effectively optimised without allowing any single stakeholder-interest compromise to optimise the whole program by emphasising their ‘pet project’ at the expense of the whole endeavour. He referred to this process as collective-action when several linked and interdependent large projects are collectively governed while individual project-level parts are individually governed through a coordinated and coherently integrated governance approach. We therefore need to reconceptualise what the scope and scope-creep context may mean in such highly complex situations. We need to reflect on the benefit that was initially defined and how its delivery was conceptualised. In the case of the 2012 London Olympics, the original aim was to host the Games to the benefit of the global sporting community and to leave a legacy of community and commercial assets in London. This original aim was subsequently reconfigured by integrating the Transport for London concept, together with substantial urban-renewal benefits. Thus, the benefit scope was expanded to include the ODA to facilitate a more integrated London public-transport system (Transport for London) and to facilitate public–private benefits from the development of Stratford as an East London urban-renewal program. This presented considerable challenges to the cluster of linked program sponsors in their collective-action to deliver linked and interdependent benefits. This aspect of scope creep is often misunderstood. It has been perceived by many observers as scope creep of the Olympics project costs and scope of works but in fact the ODA subsumed a series of separate developments that were needed and waiting to be initiated. The 2012 Olympics provided the trigger for these initiatives to be viable. There was a need for greater integration of London’s public-transport system and the Stratford area of East London, which was mainly derelict real estate waiting to be redeveloped. This provided a development opportunity for accommodating Games participants and visitors as well as triggering more general urban redevelopment in the locale. It was therefore reasonable, given that it consolidated several linked initiatives, to draw these together, structured as collectiveaction. Naturally, even with potential synergy savings through undertaking these programs as collective-action, the cost of the scope would be greater than the funding announced for the original 2012 Olympics submission. This demanded strategies that maintained coherence and responsible delivery of the greater collective-action project program while coping with tensions surrounding priority setting, potential advantage-seeking by individual sponsors within the collective, and the overarching authority’s accountability and responsibility to those that supplied the funding, which included public money via the government and/or local authorities who were engaged in the program. Ways of handling the scope, scale and complexity in such collective-action projects have been identified by Gil (2017) as:

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1 To relax performance targets when it becomes patently clear that they are unachievable due to changes in context, such as when additional sponsors come on-stream or when additional value-capture is identified that has additional scope implications; 2 Providing global buffers, additional general contingency resources, that may be called upon if required and justified; 3 Providing flexible design structures that allow for originally stated commitments to the project/ program concept to change (such as design features or output parameters such as a stadium to seat X people) while maintaining the spirit and collective goal; 4 Providing arbitrating and refereeing dispute mechanisms to resolve disputes about the best way to realise the project/program; perhaps due to different project sponsors’ concerns not being able to be resolved without such a process. Thus, an original business-case budget cost plan may legitimately vary from the TOC finally authorised to proceed with a project or program.

Project budget We now see something of the complexity of what the concept of a project budget and its development may mean in terms of estimating both costs and benefits. Again, we refer readers to Chapter 4 for more detail on value and benefits. We believe that it is necessary to have opened up the discussion of budgets and estimates sufficiently to understand that they are not real but socially constructed concepts, and therefore context, assumptions made by project stakeholders, and the market reality play their part in influencing perceptions of a project having a realistic target cost or being above or below what a fair and reasonable budget might be. In response to the Wood and Duffield (2009) benchmarking study of alliancing, Walker (2016, p13) in a recent alliancing research study, cites a quote from a participant (S-12) whom he interviewed. S-12 was also consulted and interviewed for the Wood and Duffield (2009) study and he observed that: the biggest problem they [Wood and Duffield] unearthed . . . was not the performance of the alliance from Target Outturn Cost to actual outturn cost, but the performance of the government agencies between the business case that was submitted internally within government and treasury, and the target cost and scope of the work that was adopted. Participant S-12 expressed concerns about the quality of project business cases for some alliance projects. Wood and Duffield (2009) suggest that PPP costs are marginally lower than both alliancing and traditional approaches but that all delivery approaches end up costing more than the original business-case cost estimate. This position, however, may be seen as misleading because the business-case estimate is prepared at very early stages of the briefing process when much is unknown and unknowable, and alliancing has been particularly effective when being adopted for complex and highly uncertain projects (Walker and Lloyd-Walker, 2015;2016). It is to be expected that actual alliance outturn costs could be higher than initial business-case estimates simply because so much is unknown, unknowable and not explored at this early stage. Traditional projects are acknowledged by those familiar with alliancing projects to be perhaps complicated but not highly complex (Love et al., 2010; Lahdenperä, 2014; Ross et al., 2014). The key to understanding what a reasonable and competitive project cost should be is subject to close scrutiny of design and delivery options as well as what should or could be included in or excluded from the brief. This scope and cost-estimation process is best conducted for complex 588

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and highly complicated project situations, where a lot of vital knowledge and information is unknown or unknowable, by a sophisticated client jointly collaborating with others who are well versed in design and delivery options. This is because innovative solutions may be found when the client’s needs-and-benefit perspective is reflected upon in light of design ideas that may be practically delivered. This process suggests a tripartite collaboration between the owner, designer and delivery teams – possibly including an operator – acting as a single team with unified, agreed goals. If we continue to follow the train of thought contrasting this with more traditional projectdelivery approaches, we may see where this discussion is leading. From the project owner’s perspective, once a project has been developed past its mandated stage-gate, with an estimated cost of $X plus any OP additional fees and contingencies, then this may be considered the project’s target cost. Traditionally, at this point in the project life-cycle, a tender is called for a project-delivery team to complete the project and their tendered amount becomes the Target Outturn Cost. As discussed in Chapter 3, in Table 3.1 we can describe general project-delivery forms as separated for design–bid–build (DBB) and design and construct (D&C) projects and for cost-plus projects where the actual costs are paid for by the OP plus an agreed margin paid to the contractor for undertaking the work. Or they can be integrated where a design team and perhaps other participants take responsibility for the detailed design and delivery of the project for a specific bid price. Whichever approach, either using an IPD or traditional project-delivery form, the project target cost will comprise the components illustrated in Figure 27.1. The main difference between IPD forms, such as alliancing and traditional approaches, is that the whole scope and cost development is integrated in IPD with the owner directly paying for the items shown in Figure 27.1 and for traditional approaches (other than cost-plus) where the project owner pays for these items indirectly. This raises an interesting question about the efficiency and effectiveness of determining scope and cost, i.e. why and under what circumstances might IPD alliancing be a better approach?

costs necessary to support the direct cost element

Indirect costs

+

labour, plant, materials and specialist subcontract work

Direct costs Target out-turn Cost TOC

=

+ Contingency costs

+

Allowance for unknowns and uncertainties and potential cost escalations Profit margin and corporate overhead contribution

NOP fee costs

Responsibility and accountability for the agreed TOC is shared by the alliance participants

Figure 27.1  T  OC composition (Source: based on NACG GN5 Department of Infrastructure and Regional Development 2015 clause 5.4)

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The traditional approach results in a tendered amount becoming an input to the target cost. This is subsequently adjusted during the contract period to cover extra scope-change costs resulting from the project context being less-well understood than is the case for alliance IPD projects. Superficially, it may be argued that traditional approaches introduce market competition, resulting in the project cost being subject to market tensions and therefore being lower than a cost-plus approach or IPD-alliance approach. However, this position ignores two important issues. IPD approaches require integration of the OP, design team and delivery team and so they provide three perspectives, as has been the case for most alliances (Wood and Duffield, 2009; Lahdenperä, 2014; Walker et al., 2015) rather than the fragmented linear perspectives channelled in traditional delivery forms. These perspectives are generally sequenced as reflected by the OP brief, the design interpretation (sometimes iterated with the OP to a limited extent) and then the delivery contractor’s re-interpretation of the design. In contrast, the OP perspective on the project brief, scope and objectives is open to challenge by the design and delivery team in clarifying how the project benefit may be best identified, designed and delivered. The design team’s perspective on how best to design the project is similarly open to challenge by the OP and delivery team. Also, the delivery team is open to challenge by the OP and design team. The result is not negativity and conflict resulting from challenged ideas but greater clarification of what the need and benefit are, how best to design the delivery of the outcome in the most practical and best-value way and how best to deliver the project effectively. Constructively challenging ideas in an open dialogue often reveals innovation opportunities. In Europe, this process is understood as conducting a competitive dialogue (Hoezen et al., 2010; Hoezen, 2012). The term dialogue expresses its underlying concept well. Dialogue does not mean that one party to a discussion seeks to convince another party to accept their position. Rather, the process involves sharing mental models about an idea or proposal and exploring it in depth to reveal an improved outcome through a better understanding of the broader context, implications and opportunities surrounding the idea. This generates creative tension (Senge, 1990, p226). This creative tension often reveals solutions to problems that generate breakthrough innovations. We discuss how innovation is developed and diffused in IPD in more depth in Chapters 10 and 18. The second important issue about IPD versus traditional approaches that impact scope and cost is that they are far more tightly and comprehensively considered in IPD-alliance arrangements than is normal for traditionally procured projects. Walker, Davis and Stevenson (2017), for example, explain how ambiguity and uncertainty in alliance projects is reduced through collaborative action between the triad of alliance participants. IPD-alliance projects also have a rigorous process (explained in detail in later sections of this chapter) to develop costed scope to arrive at the TOC. The TOC becomes a fixed-price contract cost that is rarely changed because the alliance agreement, governance arrangements and the whole alliance culture beds that scope and cost down at the TOC-approval stage. Any further changes are accommodated within the TOC unless they are deemed to be a substantial project-adjustment change event authorised by the OP. The TOC in an IPD-alliance agreement is also subject to pain- and gainsharing arrangements so that efficiency and innovation savings are shared by all parties and that project cost overruns are similarly shared according to an agreed formula. Thus, the TOC-development process should be the real focus of concern when evaluating a project’s cost performance and not any original budget or estimate established before the time the TOC scope and cost is developed as a target. A key game changer in an IPD alliance is the way that the participant groups engage in dialogue to both clarify scope and arrive at a more realistic project TOC than is the case with most traditional project-delivery approaches. Additionally, the fixed nature of the TOC figure, the gain- and painsharing arrangements 590

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and governance mechanisms that balance control with openness, transparency and latitude for innovative action to steer the project, provide strong supportive mechanisms to contain costs within the TOC. Throughout this chapter we refer to the project TOC as being the considered estimate of costs that form a target before the project is begun (other than preliminary design and investigative works) and as such forms the most reliable and realistic ‘budget’ to aim for at completion. It provides an end-cost goal or target that is expected to be achieved. In this section we focussed on explaining what we mean by project cost and explained how, for many traditionally procured projects, both scope and cost may blow out considerably. We saw how the approved business case cost may vary considerably to the project TOC and we explained why and how this may happen.

What is the process for developing a TOC? The Department of Infrastructure and Regional Development NACG GN5 (2015, p20) clause 5.1 explains the TOC process as follows: The TOC is the acronym for Target Outturn Cost, which is the expected cost at completion of the alliance works. While the TOC is expressed as a number, the objective of the TOC-development process is to ‘provide substantially increased certainty of outcome in achieving the Owner’s VfM Statement objectives at a fair price’. Although the TOC becomes a part of the Proponent’s Offer at the conclusion of the TOC-development process, it is not the same as a lump sum tender price, which is a fixed-price offer to undertake the work as defined in a risk allocation contract. It is a forecast of the cost at completion, against which the Actual Outturn Cost (AOC) will be measured for the purposes of assessing cost gainshare or painshare in accordance with the Commercial Framework. As an expected cost figure, it will include the expected cost impact of all risks and opportunities consistent with the scope and risk responsibilities of the alliance. The TOC is the key financial component of the four interdependent alliance success factors introduced in the Guide: 1 2 3 4

Integrated, collaborative team; Project Solution; Commercial arrangements; and Target Outturn Cost (TOC).

The TOC is a formal offer by the Proponent to the Owner, for providing certain services and having exposure to certain risks (shared with the Owner) based on the project deliverables and commercial arrangements set out in the PAA. It is determined using the same estimating skills and processes as traditional tendering and it will be extensively reviewed and formally approved internally by the Proponent’s senior management before it is submitted to the Owner. The development of an alliance TOC is explained in the Department of Infrastructure and Regional Development NACG Guidance Note 5 (2015). This Guidance Note makes clear that the TOC-development process is a deep collaboration between the OP and the NOPs comprising a consortium of designers, general and specialised contractor deliverers and (frequently) the completed facility operators. 591

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This structure establishes clear anticipated behaviours through establishing expectations that are both regulatory (rules, guidelines, regulations, etc.) and norms-based (values such as collaboration and openness, transparency and power asymmetry). The guideline document also suggests way in which the third pillar of institutionalisation suggested by Scott (2014, p67–68), the cultural-cognitive pillar, may be enacted. The alliance TOC-development process and principles offer a radically different institutional mindset of the project than is the case for more traditional owner-hands-off projectdelivery choices. Several themes featured in the Department of Infrastructure and Regional Development NACG GN5 (2015) Clause 2.5 guidelines are highlighted below: (a) There is a clear and significant difference between the concept of the TOC as ‘a dollar value’, being a component of the Proponent’s offer to the Owner, and the ‘process of developing the TOC’ (Department of Infrastructure and Transport, 2015, p10); (b) The Owner does not transfer risk to the project design and delivery teams but shares the risk identification and management process and in doing so accepts that it is exposing itself to subsequent consequences. Risk contingencies are identified as part of the TOC through the TOC process and managed accordingly. This risk-sharing is also reflected in the risk– reward arrangements embedded within the alliance agreement; (c) The TOC represents the expected end cost and as such is an output and not a cost input; (d) The TOC process is conducted collaboratively between the OP and NOPs with complete transparency and so it represents a close relational and mutual trusting approach to developing a TOC in a OP hands-on and not hands-off manner that is normal in traditional bidding practice; and (e) The TOC process combines effective competition through the NOPs selection part of the process and effective collaboration with the selected NOPs once selected to develop the TOC. The starting point of the process to develop a TOC is the initial establishment of the businesscase proposal that identifies the required benefit to be achieved through project delivery and demonstrates how it expects to achieve superior value for money (VfM) compared to other alternative means of delivering that benefit. The term VfM has been criticised (MacDonald, 2011; MacDonald et al., 2013), with the term ‘best value’ being preferred because VfM infers that all value can be monetised whereas best value implies value that may be intrinsic, ephemeral and intangible, such as aesthetic beauty, environmental health or social justice. The Level Crossing Removal Program (Victorian State Government, 2017) case study provides examples of best value as well as VfM in its justification for the program proposal. The TOC process moves through a series of collaborative workshops and intense working periods to identify and quantify not only all direct known and knowable costs but to identify and assess the cost impact of inherent risks as well as to establish contingency risk amounts to cover for both known unknown risks and to provide a reasonable assessment of unknowable unknown risks. Department of Infrastructure and Regional Development Guidance Note 5 NACG GN5 (2015) clause 3.5 presents a notional TOC process-mapping graph that illustrates: (1) The initial business case with maximum and minimum cost estimates that include inherent and contingent risk to attempt to cover known, knowable and unknown risks; (2) The TOC-development processes; (3) TOC approval when most of the inherent risks are exposed and more realistic strategies to overcome these are well developed and where contingent risk can be more accurately 592

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evaluated, coped with or a realistic figure estimated based on three perspectives of likely impact from the alliance triad of participants; (4) The practical completion cost when inherent and contingent risk is minimal; and (5) Final handover when all costs are known.

Their mapped process (2015) shows that there is an expectation that the actual TOC will be less than the approved TOC and therefore there will be a gainshare for NOPs who participate. However, if the cost curve ends up greater than the approved TOC, then participants will be subject to penalties as part of the painsharing arrangements (discussed later). Central concepts in the Department of Infrastructure and Regional Development NAGC GN5 (2015) guidelines for TOC development can be summarised as follows: 1 The TOC process leading from the approved business case requires sophisticated and knowledgeable intellectual input from the owner because the TOC process is about dialogue and not dictating a brief. The OP is often the nominated person who will be in the alliance leadership team (ALT) during project delivery and so should be able to understand the business case and benefit need. This is so that they do not become railroaded into accepting convenient solutions to challenges but are able to balance advocacy of what was articulated as the benefit/need while being open-minded through dialogue with the NOPs to appreciate the NOPs’ perspective on proposed solution. The owner should be clear of functional performance requirements (the need or benefit to be realised at a best-value outcome) (Department of Infrastructure and Transport, 2015, p14). This should conclude with a superior outcome because the OP may engage in developing novel and innovative solutions that might not otherwise occur. NOPs challenging the OP to explain and clarify why proposed and discussed solutions may, or may not, be appropriate allows all parties to reach a point where ambiguity may be significantly reduced, perhaps practically eliminated, uncertainty levels similarly reduced, and risks more clearly understood. An expertly confident and sophisticated owner is also more likely to be able to participate in opportunity seeking rather than risk shifting. 2 IPD and especially alliancing is appropriate for complex projects where there is much uncertainty and ambiguity. Brownfield sites are particularly vulnerable to latent conditions where there are many unknown unknowns and knowable unknowns with the expertise and insights available when a multi-disciplinary perspective is available (see Chapter 6, Figure 6.2 for more details). Two forms of alliancing are discussed: single-TOC and dualTOC processes. 3 The owner normally commissions its own independent estimator to provide a cost check to ensure that the proposed TOC figure is of reasonable accuracy. This provides the public with an assurance that the TOC solution cost represents an accurate picture of what the actual final cost should be. 4 The process must be transparent to ensure that the integrity of the process meets strict probity measures and that VfM can be demonstrated in comparing the TOC with the approved business case.

What do we mean by the terms ‘single TOC’ and ‘dual TOC’? The Department of Infrastructure and Regional Development NACG GN5 (2015) Guidance Note 5 for TOC development clearly distinguishes between a single and dual-TOC process. 593

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Both approaches begin with a call for Expressions of Interest (EOI) or Request for Proposal (RFP) based upon the owner’s VfM statement. The Guidance Note 5 Clause 4 states: Consistent with the Owner’s VfM Statement, the Owner must, through collaboration, take the lead in providing understanding, definition and guidance on project objectives in the scope and risk development undertaken by the Proponents through the TOC-development process. This leadership role is the responsibility of the Owner, not the Proponents, and the TOC is a direct reflection of this scope and risk development. . . . The functional specifications provided by an Owner in tender documentation for an alliance should include a definition of asset functional requirements. The EOI or RFP will call for consortia of designers, contractors and, in some cases, facilities operators to be formed as project proponents. They will present their credentials to demonstrate excellence in delivering projects of the complexity and scale of the facility to be developed. These will then be assessed by the owner’s evaluation team to shortlist potential proponents to a small group of consortia. The process is robust and has been in place for well over a decade. The National Museum of Australia project, opened in 2001, is an example of an earlier alliance-selection process that has been extensively documented (Walker and Hampson, 2003b, pp83–98). Shortlisting criteria and the selection process are transparently and clearly provided in the EOI. Key demonstrated competencies through evidence-based examples by EOI/RFP respondents that are expected to be able to collaborate to clarify an owner’s needs and to develop an innovative solution. A significant difference between the single and dual approach lies with: (1) The criterion for demonstrated excellence being paramount for single-TOC alliances (as was the case on the National Museum of Australia project (Walker and Hampson, 2003b, pp83–98)); (2) The primacy of demonstrating VfM by, normally, two shortlisted proponents for a competitive-TOC process; (3) The manner in which the TOC-development process unfolds being necessarily different for a single versus a dual process. This is explained further later in this section.

TOC process for a typical alliance The single and dual-TOC processes follow slightly different paths to the same end: the establishment of a TOC which has been arrived at collaboratively. Each approach has its advantages and drawbacks, which we explain later. We draw upon Figure 15 in Clause 6.5 of the National Alliance Contracting Guidelines (NACG) Guidance Note 5 (Department of Infrastructure and Transport, 2015, p34), which details the process, which is essentially the same for both single-TOC and dual-TOC arrangements, together with our experience of actually preparing TOCs on numerous alliance projects. We explain both the single and dual-TOC processes in more detail below.

Single-TOC process The single-TOC process requires selection of a single alliance based on the demonstrated excellence of the alliance syndicate. The National Museum of Australia provides an excellent example of the process. The alliance-selection process is described in detail elsewhere (KPMG, 1998; 594

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Auditor-General of the Australian National Audit Office, 2000; Walker et al., 2002; Walker and Hampson, 2003b, pp83–98). An example of a single-TOC process is presented in Figure 27.2. This chart shows site works and subcontract letting progressing ahead of TOC approval. Although this may sometimes occur, it normally requires separate approval of funding for an Early Works Package. For example, on the Westgate Bridge Strengthening alliance in Melbourne, a separate TOC for Access and Enabling Works was prepared and approved to enable preliminary works to proceed. In summary the process is as follows:  1 An EOI or RFP is called publicly, often with information sessions to attract as wide a response as possible.   2 Clear criteria are set and are required to be responded to by the proposed proponent syndicates, demonstrating their capacity and ability to deliver performance excellence on similar past projects. These criteria usually demonstrate financial-standing capacity, cost and time performance, quality of product delivery, safety and environmental care, relations with stakeholders (including labour and unions), innovation, and (of prime importance) excellence in collaboration.  3 A desk review of proponents is undertaken to narrow the field to two or perhaps three contenders. These proponents undertake an extensive selection workshop in which they present their case and evidence for being considered ‘excellent’. They present their proposed key team members and leaders, and discuss their initial ideas for the project design solution and its delivery. They may also be required to offer their fee structure for consideration. Alternatively, the appropriate fee may be determined by an audit of similar contracts completed during recent years.

Alliance consortium selected (on merit)

External cost check and TOC approval

Scope and option testing workshops

Preliminary site works Site establishment Sub-contract letting OP NOP’s: Incentivisation and Key Results Areas (KRAs) Design Main contractor(s) Specialist contractor(s) Operator(s) Alliance development stage Project delivery duration Figure 27.2  Single-TOC process illustration

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  4 The outcome of the selection workshop is the appointment of the preferred proponent.   5 The next step is the Definition Phase, during which further intensive workshops are held where the design and delivery solution is further explored to consider options and to clarify and narrow the focus on a preferred solution. The aim is to enhance clarity of context, to reduce uncertainty through dialogue between parties and to reduce ambiguity. It is important to reiterate the meaning of dialogue as meaning exploration of positions, perspectives and views on issues to arrive at a consensus rather than one party attempting to persuade and convert another party to a set position (Senge, 1990). This is where creativity and innovation may deliver novel solutions through empathic design (Leonard and Rayport, 1997; Amabile and Kramer, 2007).  6 The main activities during the Definition Phase are preliminary definition, stakeholder engagement, concept development, construction planning and cost development. Co-location of design, construction planning and estimating personnel is a critical factor to achieve success. A typical alliance would have between 50 and 200 people working during this phase for a period of three to six months, depending on the value and complexity of the project.  7 The commercial incentive gainshare/painshare conditions are negotiated between all participants.   8 The owner’s cost consultant (independent estimator) maintains an independent position and provides the OP with an assessment of the accuracy and validity of the projectsolution design.   9 At the end of the TOC process, usually within three to nine months of the alliance formation, the draft TOC is offered by the ALT to the owner for approval. There may be further iterations of the draft TOC to achieve a lower cost or a better-value solution. 10 The TOC is agreed to and anchored in place. The TOC value will not change without the OP authorising a significant scope adjustment event to the TOC. All further refinement of the design and its delivery is manoeuvred within the TOC scope and cost estimate. 11 Typically, the TOC has to be approved by a number of stakeholders and by a State or Federal Government Treasury department. This process may take several months. 12 The alliance delivers the project. 13 The Actual Outturn Cost (AOC) is finally approved at the close of the project and gains or losses against the TOC are shared according to the incentive gain share/pain share agreement.

Dual-TOC process The dual-TOC process requires selection of two proponents to prepare a TOC, leading to the selection of a single proponent based on the demonstrated excellence of the proponent and, in addition, considering the cost and viability of the proposed delivery solution. The owner would usually be engaged with two shortlisted consortia during this alliance-development agreement (ADA) stage with each proponent consortium providing a competitive solution. The EOI phase would be the same as for the single-TOC approach and selection of two proponents would also follow that same path. Once the shortlisted proponents have been identified, the process continues with the owner sharing time and engagement with an owner-team dedicated to each proponent consortia. The process is illustrated in Figure 27.3.   1 In principle, the process is similar to the single-TOC process.  2 Often, the OP will have prepared a reference design to ensure an ‘apples with apples’ comparison. 596

IPD and TOC development Alliance consortia (2) selected (on merit)

External cost check and TOC approval

Proponent syndicate 1’s development of a TOC

Selection of successful TOC and its approval

Project end AOC

Proponent syndicate 2’s development of a TOC

Site establishment OP NOP’s: Design Main contractor(s) Specialist contractor(s) Operator(s)

Sub-contract letting

Alliance development stage Project delivery duration

Figure 27.3  Dual-TOC process illustration

  3 Workshops are held, as in the single TOC. However, there are potentially additional problems relating to resourcing of two separate assessment teams, involvement of stakeholders presented with two different solutions, and probity issues in general   4 There are two parallel sets of intensive TOC-development workshops, one for each proponent, where the design and delivery solution is further explored to consider options. The aim is to enhance clarity of context, to reduce uncertainty through dialogue between parties and to reduce ambiguity. For probity reasons, the owner normally assigns a separate team to each proponent to collaborate with their proponent consortia to help them develop their TOC.   5 Each proponent finalises their preferred solution and appropriate TOC and commercial arrangements.   6 Each proponent’s TOC, together with their proposed commercial fee and pain/gainsharing arrangements are presented for the owner for assessment and approval.   7 Each proposal is also independently checked by the owner’s cost-estimate consultants to ensure that the proposal fits the VfM criteria and achieves the business-case objectives.   8 Each proposal is presented to the various government and regulatory authorities for assessment and approval.   9 The owner advises the successful proponent they are preferred. It should be noted that the cost of competitive dual-TOC tendering is relatively high, as the proponent has had to prepare a TOC design, for which the design consultant is normally paid by the contractor. The losing proponent is normally awarded compensation for participation in the process, typically about half of the cost they have incurred, and, as part of that compensation, agrees that intellectual property created through this TOC-development phase that may or may not be incorporated into the successful proponent-approved TOC. 597

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10 Typically, the TOC has to be approved by a number of stakeholders and by a State or Federal Government Treasury department. This process may take one to two months. 11 At the end of the TOC process, when the successful proponent is chosen, the project-alliance agreement is signed off by all parties. The TOC remains fixed and any subsequent cost or scope changes must be authorised by the OP as a significant change event to that TOC. All further refinement of the design and its delivery is manoeuvred within the TOC figure. 12 Detailed design and mobilisation to site can then commence. 13 The works are fully delivered. 14 The AOC is finally approved at the close of the project and gains or losses against the TOC are shared according to the incentive agreement reached.

Typical alliance organisation A typical alliance team includes a constructor NOP, a designer NOP, an operator NOP (for brownfield and rail works, for example) and an owner participant (OP), typically a government authority. For a large project, there may be several constructor NOPs and several designer NOPs. The following description is for a typical TOC of around $300 million and a typical TOCpreparation period of about six months. The first step is for the constructor and designer organisations to agree to work together and submit an EOI/RFP. Most commonly, both the constructor and designer will become NOPs in their own right, but sometimes the designer will be a subcontractor to the constructor NOP. The EOI/RFP may vary, from submission of a straightforward questionnaire, to an exhaustive, detailed document including the financial strength of proponents, understanding and approach to delivery, experience and track record, proposed team structure and people, pricing proposal, reimbursable cost multipliers, risk–reward structure, risk and opportunities, and possibly a client budget critique if the owner reveals their budget. This process may take 30 people, from designers and constructors, three weeks, full-time, to prepare and submit. The next step is a selection workshop for each group of participants with the OP. Each workshop may last anywhere from two hours to two days, and may require a preparation time of several days by the participants. Ideally, following selection, the Alliance participants will co-locate to one office, which may be one of the participant offices or, particularly for large Alliances, in a specially rented office A typical alliance team will comprise an alliance leadership team (ALT) with at least one person from the OP and each NOP, and an Alliance Management Team (AMT) typically comprising the alliance Manager, a Design Manager, an Engineering Manager, a Delivery Manager, a Construction Services Manager, a TOC/Submission Manager and a Commercial Manager. Under each of these will be a total of approximately 60 members of the Wider Project Team (WPT), including designers, engineers, planners, constructors, estimators, administrators, human resources (HR), quality, safety and environmental. Taking an example of experience from a rail-crossing removal alliance-project TOC process, workshops will then commence with an alliance launch workshop, usually lasting one day, which most of the team members noted above will attend. During the next couple of months, workshops will be held, possibly twice a week, with stakeholders, rail and road operators, utility authorities, government authorities, etc. This can be quite a demanding process, requiring preparation and write-up, particularly in a dual TOC where probity is a significant concern. Attendees at workshops may vary from 3 to 30 persons, and participation in these workshops can be quite demanding for all involved, with the proponents’ proposed delivery team involved 598

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almost full-time for about ten weeks. During the workshops, the concept design is developed and options are considered and tested for acceptance by cost planning and construction planning personnel, who also attend the workshops. Optioneering can sometimes take longer than necessary as the team strives to achieve the best outcome. Particularly in dual TOCs, which are still in the competitive stage, the messages from the owner can sometimes be opaque and misinterpreted. A particular issue to consider is scope creep, as discussed earlier. Through the TOC process, consultation with stakeholders often highlights particular benefits for a stakeholder that could be provided at an increased cost but for which there is no funding. There may be a requirement to prepare interim submissions for items such as design solutions and construction methods and for the owner to confirm with stakeholders that the process is tracking satisfactorily. The final design is then documented, construction planning is finalised, and estimating is progressed and developed for review by Senior NOP Management, both internal and external. The final three weeks will involve extensive peer review, to ensure individual and collective acceptance of the TOC by all participants. Finally, the TOC proposal is submitted, traditionally in hard (paper) copy but recently fully electronically. The subsequent review process by the OP may be quite involved, usually with some interaction involving the NOPs, and typically takes two months before the contract can be awarded.

Comparison of single-TOC with dual-TOC processes Recently, since around 2010, Australian state and federal government Treasury and Finance Departments have favoured a competitive dual-TOC approach (Tamburro and Wood, 2014) arguing that a competitive dual TOC provides greater VfM than a single-TOC approach due to the competitive tensions inherent in a competitive-TOC process (see Section 7 of Department of Infrastructure and Transport, 2015). However, this view is not shared by others. For example, Consult Australia (2010), which represents many of the NOPs engaged in alliances in Australia, argues that the competitive dual-TOC process often reduces innovation by placing a critical focus on the proposed TOC cost at the expense of exploring scope and innovative solutions. Additionally, they expressed concern that the owner having to resource two separate assessment teams may weaken their ability to achieve the best solution because the competitiveTOC approach requires fragmentation of the owner’s team into two independent groups with no leakage allowed of ideas from one bidding consortium to another in this competitive process. Walker undertook research by interviewing 20 alliance experts who had experience of both single and competitive-TOC approaches (Walker, 2016). His data suggest that while many of those he interviewed conceded that perhaps a lower-cost TOC may well emerge from the process it may also not be the most innovative and ‘best’ solution because the process rewards a focus on lower cost rather than developing a ‘best solution’ that may in the longer run (when operational costs and effectiveness are considered) be actually less expensive. Others he interviewed also suggested that there was a lower level of trust between the OP and NOPs involved in each proposal and this inhibited exploring options that may be innovative because of concerns that any innovation from one consortium may be leaked to the other proponent. A third point made by several of those interviewed in the study was that the NOPs’ fee is only a very small proportion of their costs and that the additional cost to the owner of engaging with two proponent teams might negate the advantage of competitive cost tensions. In general, the industry accepts the pressure placed on public-sector owners to be perceived as pursuing a 599

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price-competitive solution but expressed scepticism that reverting to a cost competition from the original spirit of collaboration found in single-TOC examples, such as the National Museum of Australia alliance (Walker and Hampson, 2003a), could undermine the level of innovation needed to produce an excellent outcome that may result from alliancing (Walker, 2016). The Walker study (2016) reveals some interesting insights about IPD in the USA context where the Integrated Form of Agreement (IFOA) is used at one of three levels of relationalintegration intensity (NASF et al., 2010), with Level 3, according to Heidemann and Gehbauer (2011), being the most similar in form to alliancing in Australia. One of the US experts (interviewee S-13) made an interesting observation about the Level 3 approach as practised in the USA. S-13 stated that (Walker, 2016, p19): There are several permutations of how owners would operate IPD. The purist form of it, is you basically secure the entire, or the key signatories of the team as one at the onset of the project, as one team, with the architect, general contractor and the key subcontractors. Then another form of it is that you procure an architect and then you procure a general contractor based on fees, qualifications and perhaps looking at their general conditions of fees. So it has nothing to do with construction cost. Then this team starts securing the subcontractors with the same or similar process, which means that we’re just asking for general conditions and fee proposal with qualification from the key trade partners that then get them on board very early on. S13 also stressed the point that fees agreed between the OP and NOPs recognise and provide a way for the OP to pay for the expertise and intellectual property of the NOPs in collaborating to find smart design and delivery solutions, which is quite a different concept to their collaboration in finding the least expensive way to deliver the project. The paying for expertise allows greater intellectual input from all parties in solution-finding with a focus on the end result rather than having a focus on the lowest cost for a specified output. The outcome rather than output becomes the main driving motivator. One advantage of a single TOC is that it allows for more open commitment by stakeholders during the TOC phase, due to more open discussion and consultation because there are fewer constraints on probity requirements. Also, a single TOC allows the delivery phase to commence more quickly than in a dual TOC, which is normally a benefit. This is because Early Works Packages can be awarded, enabling both detailed design work and work on-site to proceed prior to sign-off of the TOC, which is not possible in a dual TOC until the successful proponent is selected. A disadvantage of a single TOC is that it does not provide the same certainty of value for money (VfM) to State and/or Federal Treasury that a dual TOC does, which may result in a longer approval period. The quality of the input required from the OP’s Independent Estimator is more significant to prove VfM. The TOC-development process seems to generate a commitment to work together to find a smart and effective project-delivery solution that is not evident through the fragmented, traditional approach of tendering. As interviewee S-13 in the Walker (2016) study stated: I am certainly firmly of the belief that the absolute best situation is a single TOC with very appropriately staffed people from both the client and the other alliance partner side and then you start from the outset with creating a seamless team. You know, you build the culture and so on from day one and then you do all sorts of things like if the client has got their value statement, you take it apart and understand what the value 600

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statement really means and how can you produce value given the start you’ve got from the value statement. You know, with that one seamless team, you can I think turn in some marvellous results. S13’s quote illustrates the importance of the NOPs critically evaluating and understanding the owners value proposition and this process often helps owners to also better understand what they needs and to explore solution options that they may not have considered. The emphasis illustrated in this quotation is about understanding what ‘value’ means to the owner and not what ‘lowest-cost TOC’ may be interpreted to mean.

Program alliances An owner can use a Program Alliance to deliver a series of projects, the scope, timing and funding of which is not known at the formation of the alliance. Generally, each project is typically smaller than a Project Alliance, in the order of $1 million to $100 million, and typical owners are water authorities such as Melbourne Water, Barwon Water, etc. Selection for an initial project can be made using either a single- or dual-TOC process, and subsequent projects can be priced as either single-TOC or dual-TOC processes. A recent example of program alliances in Melbourne is the removal of 50 road/rail-grade separations, where the State Government, through the Level Crossing Removal Authority (LXRA), established 11 separate alliances using a dual-TOC selection process. Each alliance initially contracts to remove two to three level crossings and subsequently prices additional removals or other works in a single-TOC process. The advantages of this approach are: Table 27.2  Chapter concept summaries Key concept/Issue

Summarised comments

What do we mean by project cost?

Project cost is a confusing and often misused term. The initial announced cost estimate evolves as more becomes known about the project. We should consider cost as evolving from an initial announced estimated cost leading to development of a budget cost that is refined to a contractually committed cost at tender and then evolves with further changes in context and circumstances to the final actual cost. In IPD alliancing, the term TOC describes the Target Outturn Cost arrived at after collaboratively scoping and estimating the project with more information, knowledge and capacity to be innovative than is usually the case for traditionally procured projects. Projects may experience scope creep where the quantum of scope is increased but this may be due to seizing opportunities for additional value-capture. Scope creep may not necessarily be a bad outcome. Often, several projects, which may be better integrated into a program of work, are misreported as having experienced scope creep because the costs and scope of the linked concatenated program escalate from an original announced project. Understanding the context and history of project-scope increase is important to an accurate conceptualisation of a project’s TOC. We discussed and explained how single- and dual-TOC processes are conducted. We also commented on the similarities and differences of these approaches and presented a lived-experience perspective through vignettes.

Link between scope creep and cost increase.

Processes involved in developing a TOC.

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•• ••

Reduced time for completion of each project. More even distribution of labour and plant resources for delivery of the projects, resulting in lower costs.

Conclusion This chapter focussed on the processes used to develop the TOC for IPD-alliance projects. Key concepts and issues that were raised and explored may be summarised as follows: The focus in this chapter has been on how the TOC is developed. We have referred to the process of developing a TOC as also being strongly linked to the incentivisation arrangements in alliances through performance criteria and their measures, which determine the level of incentive gainsharing or painsharing. Incentivisation is discussed in detail in Chapter 25 and performance criteria and their measures are discussed in detail in Chapter 26 of this book.

References Amabile, T. M. and Kramer, S. J. (2007). “Inner work life.” Harvard Business Review. 85 (5): 72–83. Auditor General of the Australian National Audit Office (2000). Construction of the National Museum of Australia and the Australian Institute of Aboriginal and Torres Strait Islander Studies, Audit Report. Canberra, Australia, Australian National Audit Office, 34 1999–2000. Auditor General of Western Australia (2012). Managing Capital Projects. Perth, Australia, Office of the Auditor General of Western Australia, 12: 76pp. Brandon, P. S., Kirkham, R. J., Greenhalgh, B., Waterman, A. and Ferry, D. J. (2007). Ferry and Brandon’s Cost Planning of Buildings, Oxford, UK, Blackwell. Consult Australia (2010). Response to the Alliance Contracting Guidelines – Consult Australia’s Submission in Response to the Practitioners’ Guide and Supporting Policy and Guidelines Developed by the Victorian Government Department of Treasury and Finance Sydney, Australia, Consult Australia: 20pp. Davies, A. and Mackenzie, I. (2014). “Project complexity and systems integration: constructing the London 2012 Olympics and Paralympics Games.” International Journal of Project Management. 32 (5): 773–790. Department of Finance and Deregulation (2009). Gateway Review Process – Overview. Canberra, Commonwealth of Australia: 8pp. Department of Infrastructure and Transport (2015). National Alliance Contracting Guidelines Guidance Note No 5: Developing the Target Outturn Cost in Alliance Contracting. Department of Infrastructure and Transport A. C. G. Canberra, Commonwealth of Australia: 90. Drummond, H. (1998). “Riding a tiger: some lessons of Taurus.” Management Decision. 36 (3): 141–146. Drummond, H. (2017). Megaproject Escalation of Commitment: An Update and Appraisal. The Oxford Handbook of Megaproject Management. Flyvbjerg B. Oxford, Oxford University Press: 194–216. Eden, C., Ackermann, F. and Williams, T. (2005). “The amoebic growth of project costs.” Project Management Journal. 36 (2): 15–27. Flyvbjerg, B. (2007). “Curbing optimism bias and strategic misrepresentation in planning: reference class forecasting in practice.” European Planning Studies. 16 (1): 3–21. Flyvbjerg, B. (2009). “Survival of the unfittest: why the worst infrastructure gets built and what we can do about it.” Oxford Review of Economic Policy. 25 (3): 344–367. Flyvbjerg, B. (2014). “what you should know about megaprojects and why: an overview.” Project Management Journal. 45 (2): 6–19. Flyvbjerg, B., Holm, M. S. and Buhl, S. (2002). “Underestimating costs in public works projects: error or lie?” Journal of the American Planning Association. 68 (3): 279. Flyvbjerg, B., Rothengatter, W. and Bruzelius, N. (2003). Megaprojects and Risk: An Anatomy of Ambition, New York, Cambridge University Press. Gil, N. (2017). A Collective-Action Perspective on the Planning of Megaprojects. The Oxford Handbook of Megaproject Management. Flyvbjerg B. Oxford, Oxford University Press: 259–286. Heidemann, A. and Gehbauer, F. (2011). “The way towards cooperative project delivery.” Journal of Financial Management of Property and Construction. 16 (1): 19–30.

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IPD and TOC development Hoezen, M. (2012). The Competitive Dialogue Procedure: Negotiations and Commitment In InterOrganisational Construction Projects. PhD. Enschede, the Netherlands, University of Twente. Hoezen, M., Van Rutten, J., Voordijk, H. and Dewulf, G. (2010). “Towards better customized serviceled contracts through the competitive dialogue procedure.” Construction Management & Economics. 28 (11): 1177–1186. Kahneman, D. (2011). Thinking Fast and Slow, New York, Farrar, Strauss and Giroux. KPMG (1998). Project Alliances in the Construction Industry, Literature Review. Sydney, NSW Department of Public Works & Services, 7855-PWS98-0809-R-Alliance. Lahdenperä, P. (2014). “In search of a happy medium: price components as part of alliance team selection.” Espoo, VTT: 72pp. Leonard, D. and Rayport, J. F. (1997). “Spark innovation through empathic design.” Harvard Business Review. 75 (6): 102–113. Loosemore, M. (2000). Crisis Management in Construction Projects, New York, American Society of Civil Engineering Press. Love, P. D., Mandal, P., Smith, J. and Li, H. (2000). “Modelling the dynamics of design error induced in rework in construction.” Construction Management and Economics. 18 (5): 567–574. Love, P. E. D., Ahiaga-Dagbui, D. D. and Irani, Z. (2016). “Cost overruns in transportation infrastructure projects: sowing the seeds for a probabilistic theory of causation.” Transportation Research Part A: Policy and Practice. 92: 184–194. Love, P. E. D., Edwards, D. J., Irani, Z. and Walker, D. H. T. (2009). “project pathogens: the anatomy of omission errors in construction and resource engineering project ” IEEE Transactions on Engineering Management. 56 (3): 425–435. Love, P. E. D., Mistry, D. and Davis, P. R. (2010). “Price competitive alliance projects: identification of success factors for public clients.” Journal of Construction Engineering and Management. 136 (9): 947–956. MacDonald, C. C. (2011). Value for Money in Project Alliances. DPM, School of Property, Construction and Project Management. Melbourne, RMIT University. MacDonald, C. C., Walker, D. H. T. and Moussa, N. (2013). “Towards a project alliance value for money framework.” Facilities. 31 (5/6): 279–309. Merrow, E. W. (2011). Industrial Megaprojects – Concepts, Strategies, and Practices for Success, London, John Wiley & Sons. Merrow, E. W. (2012). “Oil and gas industry megaprojects: our recent track record.” Oil and Gas Facilities. 1 (02): 38–42. NASF, COAA, APPA, AGC and AIA (2010). Integrated Project Delivery for Public and Private Owners, Standard. Lexington, KY, National Association of State Facilities Administrators: 40pp. Office of Government Commerce (2007a). Gateway Review Workbooks, London, The Stationary Office (TSO). Office of Government Commerce (2007b). Managing Successful Programmes, London, The Stationary Office (TSO). Office of Government Commerce (2007c). The OGC Gateway™ Process – A Manager’s Checklist, London, The Stationary Office (TSO). Ross, J., Dingwall, J. and Dinh, H. (2014). An Overview of Collaborative Contracting: Making Collaboration Effective and Choosing the Right Framework. Melbourne, PCI Group: 17pp. Samset, K., Andersen, B. and Austeng, K. (2014). “To which extent do projects explore the opportunity space?” International Journal of Managing Projects in Business. 7 (3): 473–492. Samset, K. and Volden, G. H. (2016). “Front-end definition of projects: ten paradoxes and some reflections regarding project management and project governance.” International Journal of Project Management. 34 (2): 297–313. Scott, W. R. (2014). Institutions and Organizations, Thousand Oaks, CA; London, SAGE Publications Inc. Senge, P. M. (1990). The Fifth Discipline – The Art & Practice of the Learning Organization, Sydney, Random House. Tamburro, N. and Wood, P. (2014). “Alliancing in Australia: competing for thought leadership.” Proceedings of the ICE – Management, Procurement and Law. 167 (2): 75 –82. Victorian State Government (2017). Level Crossing Removal Project – Program Business Case. Melbourne, Victorian Government: 287pp. Walker, D. H. T. (2016). Understanding the Alliance Target Outturn Cost Process and its Implications. Melbourne, Australia, Centre for Integrated Project Solutions, School of Property, Construction and Project Management, RMIT University: 77pp.

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28 AN IPD APPROACH TO DISASTER RECOVERY Erica Mulowayi and Derek H. T. Walker

Introduction This chapter focusses on a particular type of project or program of work: recovering from a natural disaster. We acknowledge that similar conclusions, about the need for and manner of integrated project delivery (IPD) engagement, may be drawn from other types of disaster recovery, from war or civil conflict, industrial accidents and the financial failure of a country or region. However, we concentrate on natural-disaster recovery because this opens up the opportunity to more fully explore how community may take an active role in disaster recovery projects and programs. Natural disasters occur frequently on a global scale. They take the form of disruptions of the five natural elements: space (ether), air, fire, water, and earth. While ‘space’ natural disasters feature infrequently in terms of significant lasting impact – such as meteors penetrating the atmosphere – the other natural disasters elements occur on a regular basis. Some of these disasters are unavoidable such as (earth) earthquakes, (air) severe cyclones and typhoons, (fire) bushfires and volcano eruptions and (water) floods and tsunamis. Some responsibility may be levelled at humankind for accelerating global climate change. However, in general there is little that individual people and communities can do to prevent natural disasters beyond making preparations and attempting to minimise a disastrous natural impact. Sea and river levee defences, bushfire mitigation measures, and earthquake building-code regulations spring to mind as examples, but clearly natural disasters cannot be legislated or managed away. People remain vulnerable to these disasters and the best we can hope for is that we have effective disaster recovery systems in place and that we possess sufficient resilience to cope with the impact of disasters. Several researchers, such as Amaratunga and Haigh (2011) and Moe and Pathranarakul (2006) have conceptualised disaster recovery projects as public projects, having a beginning and an end and which follow a novel process that leads to a unique product. Others have argued that disaster recovery projects do not necessarily follow the conventional sequential life-cycle of initiation, planning, execution and closure phases of typical public projects (Baroudi and Rapp, 2013). Far from following a linear process, recovery is considered to be part of a cyclical disaster or emergency management process, where the response and recovery phases succeed to the mitigation and preparedness phases and vice versa (Queensland Reconstruction Authority, 2014). Some studies have used expressions such as ‘protection’ and ‘prevention’ 605

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to refer to ‘mitigation’ and ‘preparedness’, as well as ‘relief’ and ‘reconstruction’ to refer to ‘response’ and ‘recovery’ (Weichselgartner, 2001; O’Brien et al., 2006; Mulowayi, 2017). Others such as Keraminiyage et al. (2006) have used the four Rs: Reduction, Readiness, Response, and Recovery to refer to the four phases of emergency management (McEntire and Myers, 2004; Mulowayi, 2017). Most activities performed in each of these phases are interrelated and overlap each other. Mitigation and preparedness generally take place concurrently in the pre-impact period of a disaster, whereas response and recovery take place in the postimpact period of a disaster, after which the lessons learnt from the two phases are applied to future mitigation and preparedness actions (Berke et al., 1993; Warren, 2010; Kepaptsoglou et al., 2014). According to Mulowayi (2017): ••

••

•• ••

Mitigation is the decision phase during which organisations agree to take various measures, including land-use planning, insurance, tax incentives, and legislation, as well as knowledge development, to eliminate or reduce potential risks from natural disasters to the community. Preparedness is the phase during which the measures decided in the mitigation phase start to be implemented. It is during preparedness that plans are developed and resources are accumulated to save lives and minimise damage from natural disasters. Among other measures are emergency services training, establishment or strengthening of forecasting and warning systems, stockpiling of food supplies, evacuation planning, acquisition of emergency response equipment, preparation of shelters, etc. Response is the phase during which emergency assistance such as search and rescue, emergency shelter, medical care, mass feeding, etc., are provided to the community to prevent the occurrence of secondary damages. Recovery generally involves the physical reconstruction of infrastructures and the restoring of basic services to normalcy. It is considered to be the most important phase of emergency management, during which the community is rehabilitated to a state where it is able to sustain itself without further external intervention. This is mostly due to the fact that its basic facilities and critical infrastructures have regained their original functioning states. According to Lindell (2013), this is achieved by restoring the normal activities of a community to what they were before being disrupted by natural disasters (Sullivan, 2003; Levine et al., 2007; Labadie, 2008; Arendt and Alesch, 2014). In fact, the notion of normalcy that emerges from the original Latin etymology of the word recovery, ‘recuperāre’, conveys the idea that the affected community is eventually able to regain its former ‘usual self’ or original activities after recovery (Mulowayi, 2017). Such activities are those that when disrupted, can also affect communities values, minds and feelings (Sullivan, 2003; Levine et al., 2007; Labadie, 2008; Arendt and Alesch, 2014).

Arendt and Alesch (2014) argued that the simple restoration of the built environment is insufficient to ensure community recovery (see also Levine et al., 2007; Mulowayi, 2017)). According to Arendt and Alesch (2014), following a significant disaster, neither the individual affected, nor the community as a whole, ever returns to what they were before the disaster occurred. Every significant natural disaster affects not only the lives of the community, but also the community itself (Levine et al., 2007; Mulowayi, 2017). Labadie (2008) mentioned that recovery should go beyond the restoring of basic life-support infrastructures; it should offer the possibility to rebuild better quality of living conditions for the community (Mannakkara and Wilkinson, 2014; Mulowayi, 2017). Such improved living conditions are what Labadie (2008, p4) referred to as the ‘the new normal’ and what others have referred to as the ‘building back better’ 606

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phenomenon (Mannakkara and Wilkinson, 2014; Francis et al., 2018), during which the community do not necessarily return to what they were before, but become a more resilient, survivable community (Mulowayi, 2017). Recovery activities can be subdivided into short- and long-term actions (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). Short-term activities include the restoration of critical infrastructure systems, providing immediate aid to victims, such as temporary housing, medical and humanitarian aid, various financial relief schemes, and recovery of basic facilities and services, such as water and sewerage systems. Examples of long-term activities include rebuilding and reconstruction of the community, as well as reimbursement schemes for property losses, such as insurance, etc. (Alexander, 2002; Coppola, 2011). While mitigation and preparedness can be conducted at any time (regardless of the occurrence of the actual emergencies), the response and recovery activities vary from cases to cases. For instance, in large-scale disasters, they may take up to several days (Mulowayi, 2017). The phases of initiating and planning a typical public project may include those illustrated in Table 28.1 and similar activities conducted in the mitigation and preparedness phases of a disaster recovery project (Moe and Pathranarakul, 2006). Additionally, activities such as warning, emergency relief, as well as short-term and long-term recovery activities are similar to those conducted in the executing phase of some public projects. Both public projects and disaster recovery projects have three commonalities: (1) they are almost always subject to uncertainty; (2) they raise a need for integration; and (3) they are subject to urgency (Baroudi and Rapp, 2013). According to Steinfort and Walker (2011), the sense of urgency is more acute in a disaster recovery project, as the output often involves recovering the quality of life of the affected communities. The aim of a recovery project is not only to prepare a community to be resilient, but also to recover and improve their situation and their ability to cope with any subsequent similar disasters (Steinfort and Walker, 2011). For many natural disasters, the first actors on the stage to begin the recovery process are emergency services such as the military or fire fighters, etc. These actors have their own processes and incremental improvement procedures that they follow, and it is beyond the focus of this chapter to discuss that phase of emergency response actions. This book is about IPD and this chapter investigates how integration between government authorities and their agents, communities, and entities that engage in the design and delivery of physical and social infrastructure respond to hydro-meteorological disasters, such as floods and tsunamis, and try to recover from them. We use an in-depth study of a flood-disaster recovery program (Mulowayi, 2017) as the focus for our discussion.

Table 28.1  A comparison between project life-cycle phases and disaster recovery phases (Source adapted from Moe and Pathranarakul, 2006, p401) Project life-cycle phases Time Initiation

Before Mitigation

Activities including land-use planning, insurance, tax incentives, legislation Plans are developed and resources are accumulated Emergency relief activities such as search and rescue, emergency shelter, medical care, mass feeding Rehabilitation (short-term recovery activities) Reconstruction (long-term recovery activities)

Preparedness

Planning Executing

Disaster recovery project phases Activities

During Response

After

Recovery

Closure

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Two questions answered by this chapter revolve around: What IPD influences impact the delivery of disaster recovery projects? More specifically: 1 2

What features of IPD and collaboration are relevant to disaster recovery projects? How did principal actors in the 2010/11 Queensland floods reconstruction recovery collaborate in practice?

The chapter takes its IPD perspective from the integration of government agencies, communities and project/program design and delivery professionals. We investigate integration and collaboration characteristics at the briefing, design and delivery phases. The term ‘disaster recovery project’ may be misleading, as the response required and often delivered more closely resembles a program of projects. Several ‘projects’ may comprise rebuilding physical infrastructure but often the full response includes changes in legislation (regulation reform, such as amendments to fire codes in the case of bushfire recovery and urban planning to mitigate against repeated flooding), institutional reform (this may include the creation of, or reforms to, existing government departments or public–private partnerships or alliances), and community culture and resilience projects to complement and ensure that repaired or rebuilt physical infrastructure is effectively used and that communities can recover and hopefully prosper. We have seen examples where formal alliances have been forged between physical infrastructure providers and the community, with government support and engagement such as occurred in the rebuilding of Queensland regional areas in Australia after the devastating series of floods in 2010 and 2011. Another alliance was formed following the Christchurch earthquake, with the formation of a government-sponsored management agency for recovery operations that included an alliance of project owners and design and delivery participants (Walker et al., 2017; Francis et al., 2018). The rest of this chapter is structured as follows. We first discuss the contextual factors that may lead to collaboration and an IPD approach, drawing from several post-disaster recovery case-study examples. This is followed by an exploration of how an IPD approach may impact the way that natural-disaster recovery projects may be best configured to deliver physical infrastructure. Discussion of insights gained about IPD from the flood recovery study is followed by our conclusions.

Contextual factors leading to the IPD approach in natural-disaster recovery projects Chapter 1 of this book introduced the topic of IPD and, in Table 1.1, the motivation to collaborate through an integrated project owner and a design and delivery team was presented. Motivation 2 in that table identified emergency recovery. The rationale for this may be explained as follows: Some natural disasters, although familiar in nature, are unpredictable as to where or when they will take place (the known-unknown scenario) and others are new and will not be known until they occur (the unknown-unknown scenario) (Norris et al., 2008; Mulowayi, 2017). Emergency situations and recovering from a crisis or disaster require swift responses in an environment where little may be known about the scope and scale of recovery works. A series of such situations is well documented in the literature (Waugh Jr and Streib, 2006; Weick and Sutcliffe, 2007) and more recently by White-Hunt and Wearne (2014) in their book on managing the urgent and unexpected. Here the key objective is to start recovery work very quickly while at the same time providing sufficient resilience to enable rapid 608

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changes in direction and/or emphasis. This requires deep collaboration to ensure agility, responsiveness and reflexivity. Disaster recovery projects are unique and tend to have their own contextual challenges that can influence how integration and collaboration are implemented between organisations. Coping with large-scale catastrophic disaster projects typically demands a large amount of resources and capabilities beyond those of any individual organisation. Organisations involved in disaster recovery projects operate in a complex environment, with diverse levels and types of governance involved, and the resulting diversity of these organisations requires significant effort to achieve proper and effective collaboration and integration (Noran, 2014). The context for many disasters, such as the tsunami, that devastated the Indonesian shoreline of Aceh in 2004 with massive loss of life and physical and community infrastructure, generally leaves the local community shattered and traumatised (Steinfort and Walker, 2011). In that instance, as with many others, the military from the host country, along with special forces from neighbouring countries, rapidly mobilised to provide basic shelter, clean potable water and stabilised the remaining infrastructure to allow recovery work to commence. This situation often presents the starting point for recovery. We see similar emergency action for earthquake and flood recoveries (Mulowayi, 2017). Between September 2010 and February 2011, the Canterbury region of New Zealand was shaken by a first magnitude 7.1 earthquake that occurred 40 kilometres west of Christchurch city and a second shallow magnitude 6.3 earthquake near the central business district (CBD) of Christchurch (Morgan et al., 2015). The scale of damages as well as the response and recovery operations, led to the declaration of the first state of national emergency in New Zealand. The series of earthquakes caused significant damage to land and buildings as well as infrastructure systems including road networks, water, electricity and sewage systems (Morgan et al., 2015). The total cost of recovery and reconstruction at the time was estimated at approximately NZ$40 billion (Morgan et al., 2015). In the aftermath of the earthquakes, the Ministry of Civil Defence and Emergency Management led the emergency response and recovery, supported by local authorities, New Zealand Police, the Fire Service, Defence Force and many other agencies and organisations. These teams were supplemented by civil and military teams from the United States, Australia, the United Kingdom, China, Japan, Mexico, and many other countries in the effort to cope with the rescue and recovery challenges. However, the number of earthquakes and aftershocks in the Canterbury region increased significantly to 7,500 and continued to pose tremendous challenges to the recovery effort (Morgan et al., 2015). Similar emergency actions were taking place within the same period of time in Queensland in Australia. After unprecedented amounts of rainfall and a large emergency release of water from the Wivenhoe dam, more than three quarters of the state (an area the size of France and Germany combined), was affected by extreme floods (Mulowayi, 2017).The 2010/2011 Queensland floods were nowhere near the severity Queensland had experienced in previous years. Almost 80% of 1.8 million kilometres of land was inundated. The disaster was soon followed by Cyclone Yasi, one of the most severe cyclones in Queensland’s history to date (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). Ninety towns and more than 2.5 million people were affected by the floods (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). Significant damages to road and rail network systems, including water systems and power disruptions to more than 480,000 homes and businesses resulted in more than AU$2.38 billion of recovery costs (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). This posed tremendous challenges to the response and recovery mechanisms that had been implemented at a local government level (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). 609

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IPD and collaboration – lessons from a case study Disaster recovery projects cross many organisational boundaries. They can involve a single nongovernment organisation (NGO) or a cluster of them collaborating on a program of recovery projects that are part of an international emergency response and recovery (Steinfort and Walker, 2011). The cluster approach, as considered in this context, is usually activated when the capacity of a government to coordinate an emergency response and a recovery is limited or constrained (Potangaroa, 2015). Within a cluster system, the government of the host country’s leadership continues, however the NGO may be coordinating numerous projects with public and privatesector organisations involved in each of the main streams of recovery, including water, health and logistics (Vallance and Tait, 2013; Potangaroa, 2015). This was the case with the recovery effort implemented in Pakistan after the 2005 earthquake. The South Asia earthquake resulted in the loss of the lives of 73,000 people, and left many without food, clothing and shelter (Street and Parihar, 2007). According to Street and Parihar (2007) the recovery effort exceeded the capacity of the government to respond to and recover from the disaster and as a result the United Nations (UN) established nine clusters, among which activities such as service provision as well as early protection, recovery and coordination were implemented. A research study conducted by ActionAid between February and March 2006 with local and international NGOs, as well as the affected communities, revealed that the earthquake response and recovery were considered to be successful (Street and Parihar, 2007). According to the research findings, one of the key elements that contributed to the success of the recovery effort was the high level of collaboration between the Pakistan government and non-government agencies (Street and Parihar, 2007). They observe that as the emergency work progressed after the earthquake, the number of clusters and sub-clusters increased rapidly and NGOs encountered difficulties in managing them. Those implementing the cluster system did not have the appropriate support or training and, thus, confusion and communication issues were observed among both UN and NGO employees, particularly when trying to understand what the cluster involved. However, overall the clusters were found to be beneficial in improving information sharing, including collaboration and coordination during recovery. NGOs reported that having a named agency responsible for coordinating efforts in a particular area was also helpful (Street and Parihar, 2007). After the 2010/2011 Canterbury earthquakes, the New Zealand government established a lead agency, the Canterbury Earthquake Recovery Authority (CERA) which led and coordinated the response and recovery effort (Paton et al., 2014; Saunders and Becker, 2015). CERA managed the economic, social, and built-environment aspects of the recovery, working with a wide range of organisations, including public and private organisations as well as non-government sectors and the community (Paton et. al, 2014; Saunders and Becker, 2015). According to Saunders and Becker (2015), CERA was effective in providing a platform for several stakeholders to collaborate together to address immediate tasks during the emergency and restoration phases. However, as the recovery moved from the emergency and restoration phases into the reconstruction phase, CERA found it challenging to maintain its influence and leadership. CERA was not as effective or efficient in communicating with the community as it intended or needed to be. As a result, its role became less clear, which confused staff, stakeholders, and the community (Paton et. al, 2014; Saunders and Becker, 2015). In Australia, federal constitutional arrangements ensure that primary responsibilities for disaster management are controlled within each state or territory (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). Emergency management is essentially based on the notion of shared responsibilities, partnerships and collaboration between government and non-government 610

An IPD approach to disaster recovery

agencies, including businesses and the local community (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). However, when a disaster strikes, the principle of subsidiarity dictates that initial decisions on how best to respond to and recover from disasters are devolved down from the state government to the local government, which is considered to be the closest to the community and hence ideally capable of deciding what needs to be done in the aftermath of a disaster (Mulowayi, 2017). At the local government level, recovery activities are coordinated through meetings organised by local disaster-management groups (LDMGs), with a Mayor or others elected members of council usually acting as the chairperson in their local disaster-coordination centres (LDCCs) (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). When the recovery is beyond the capacity of the local government, direct involvement is required from the state government working along with non-government agencies as well as private organisations (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). In Queensland, organisations such as the Queensland Police Service (QPS), Queensland Fire and Rescue Services (QFRS), Queensland Ambulance Service (QAS), Emergency Services Queensland (ESQ), the State Emergency Service (SES), the Australian Defence Force (ADF), and other councils and non-profit organisations, are part of a single peak body that is referred to as the State Disaster Management Group (SDMG) (Mulowayi, 2017). The SDMG was established in 2008 to keep local and federal governments informed on available resources that could potentially be deployed when a disaster strikes both inside and outside of the state (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). The group also informs on disaster-management policies that shape the recovery effort. The recovery processes of the 2010/2011 floods were more ambiguous than expected, giving rise to the need for new reforms and different approaches to be adopted in the aftermath of the floods (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). The Queensland floods were considered to be some of the deadliest and most damaging floods experienced in Queensland over the past ten years. Damages exceeded the previous costliest floods of 1974 (AU$68 million) and the recovery effort exceeded the capacity of local government to deal with the impacts of the disaster. The recovery measures were based on the lessons learnt from the recovery effort of the 1974 floods and other subsequent flood events (Mulowayi, 2017, 2015). However, emergency services underestimated the damages of the 2010/2011 floods and were unprepared for the scale of tragedy that followed (Queensland Reconstruction Authority, 2014; Mulowayi, 2017). Despite previous disasters (e.g. Cyclone Larry in 2009, etc.) being managed reasonably well, the federal government commissioned a report into Queensland disaster arrangements, which questioned some aspects of the disaster coordination and overall management system (World Bank, 2011; Queensland Reconstruction Authority, 2014; Mulowayi, 2017).The report concluded that Queensland’s lack of a designated coordinator potentially limited its capacity to respond to and recover from a more widespread disaster situation (World Bank, 2011; Queensland Reconstruction Authority, 2014; Mulowayi, 2017). In response to the report, the state government in Queensland adopted an ‘all-agency position’ model, which was added to the principle of subsidiarity applied in all Australian states. The ‘all-agency position’ model, unique to Queensland, involved having a predetermined agency, the Queensland Reconstruction Authority (QRA), to be responsible for managing the 2010/2011 floods. It is only after the QRA was formed that organisations’ overall agreement on the need to collaborate and develop a shared policy vision was established. After experiencing the devastation of the floods it was felt that organisations had realised the importance of the collaboration department (World Bank, 2011; Queensland Reconstruction Authority, 2014; Mulowayi, 2017). QRA worked alongside the Australian Defence Force and local government emergency services and 611

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small businesses. However, circumstances were overwhelming to the point where additional supports were needed from New South Wales and Victoria state emergency services, including the Australian and New Zealand Red Cross as well as the New Zealand Defence Force and Police Department (Mulowayi, 2017; Queensland Reconstruction Authority, 2014). Walker and Lloyd-Walker (2016) suggest that an effective way to cope with uncertainty from complex projects is through adopting IPD, whereby the project owner, designer and delivery teams form a tightly integrated ‘one-team’ to collaborate closely to minimise or eliminate uncertainty and ambiguity. Figure 28.1 presents an illustration of the integrated nature of the organisational response for the flood-disaster recovery study. Levels of collaboration are also discussed and explained later in the following text. Collaboration has been widely explored by several studies over the past years, however its application in disaster recovery projects remain poorly investigated, particularly while exploring stakeholders’ dealings with infrastructure interdependencies (Telford and Cosgrave, 2007; Normandin et al., 2009). According to Mulowayi (2015a), collaboration occurs when two or more organisations exchange resources in order to reach collective and self-interested goals. As stated by Kapucu et al. (2010), communication speaks to how people understand each other and how information is transferred across organisations. Kapucu et al. (2010) grouped communication, coordination and cooperation at one end of the collaboration spectrum, and networks and partnerships at the other end of the spectrum. Gray (2000, p7) further argued that collaboration is a ‘process through which organisations that see different aspects of a problem can constructively explore their differences and search for solutions that go beyond their own limited vision of what is possible’. The scope and nature of collaboration, however, varies in accordance with the needs and goals of collaborating organisations. This section of the paper investigates IPD and collaborative decision-making in a disaster recovery context and provides a platform to explore

Federal Government (Premier) Queensland Reconstruction Authority (QRA)

State Government (Ministers)

State Disaster Management Group (SDMG) QAS, ESQ, ADF QPS, QAS, QFRS

Human

State Recovery Sub-Committees (SRSC)

Infrastructure

Economic

Local Disaster Management Groups (LDMG)

Local Government (Lord Mayor)

Community Recovery Coordination

Environmental

Infrastructure Recovery Coordination

Finance and Economic Recovery Coordination

Water, Energy, Transport, ICT providers

Figure 28.1  Queensland disaster recovery model

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Environmental Recovery Coordination

An IPD approach to disaster recovery

how IPD and collaboration worked during the 2010/2011 Queensland floods and what were some of the challenges and opportunities experienced during the recovery. In her PhD on The Influence of Infrastructure Interdependencies on Post-Disaster Recovery, Mulowayi (2017) investigated four case studies which highlighted the recovery strategies used by large organisations in some of the most affected regions of Queensland after the 2010/11 floods. The cases, illustrated in Figure 28.2 and Table 28.2, illustrate how large organisations involved in the recovery coped with rehabilitating infrastructure systems such as water, transport, energy and ICT (information and communication technology) from natural disasters. The four organisations were mainly city councils and regional councils located in Brisbane, Lockyer Valley, Toowoomba and Bundaberg (Mulowayi, 2017). The rationalisation for selecting these case studies is provided in Table 28. 2. Twenty-four respondents, including General Managers, Disaster Recovery Coordinators, and Project Managers were interviewed. The transcripts were analysed using NVivo 10 software, which was used to compare data and verify that emerging theories or ideas from the literature reviews fitted the evidence from each case study. The queries in NVivo involved coding, matrices, text searches, and numerical counts, as well as theoretical annotations and memos. Techniques such as pattern matching, explanation building and numerical counts were used to build theories from each case study. The quality and trustworthiness of the results were measured against criteria such as validity and reliability as well as generalizability or transferability.

Lockyer Valley

Brisbane

Region SEQ Area 2,272 km2 Population 35,591

Region SEQ Area 5,950 km2 Population 2 million

Bundaberg

Toowoomba

Region SQ Area 6,449 km2 Population 96,936

Region SQ Area 12,973 km2 Population 165,168

Figure 28.2  Regional characteristics of the four case studies (Source: Mulowayi, 2017)

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–Community Recovery Subcommittee: 4 and more departments –Finance & Economic Recovery Sub-committee: 6 and more departments –Infrastructure Recovery Subcommittee: 5 and more departments –Environmental Recovery Subcommittee: 4 and more departments

Recovery subcommittees

Recovery approach

Project description

Local government council from urban flood-prone areas –The 2010/11 Queensland floods recovery –Approx. AU$400 million to AU$2 billion of devastation repair Disaster-management plan consistent with the Disaster Management Act 2003 for flood events

Industry sector

Case study 1 Local government council from rural flood-prone areas –The 2010/11 Queensland floods recovery –Approx. AU$180 million of devastation repair Disaster-management plan consistent with the Disaster Management Act 2003 for flood events –Human and Social Recovery Sub-committee –Economic Recovery Sub-committee –Natural Environment Recovery Sub-committee –House and Infrastructure Recovery Sub-committee

Case study 2

Table 28.2  Commonalities in the selection criteria of the four case studies

Local government council from rural prone areas –The 2010/11 Queensland floods recovery –AU$709,200 cost of devastation repair Disaster-management plan consistent with the Disaster Management Act 2003 for flood events –Community Recovery –Economic Recovery –Infrastructure and Building Recovery –Environmental Recovery

Case study 3

Local government council from urban flood-prone areas –The 2010/11 Queensland floods recovery –A$40 to AU$50 million cost of devastation repair Disaster-management plan consistent with the Disaster Management Act 2003 for flood events –Economic Recovery –Environmental Recovery –Human and Social Recovery –Roads and Transport

Case study 4

Between rehabilitation state to complete devastation state Queensland, Australia

(Adapted from Mulowayi (2017))

Impacts of disaster Geographical jurisdiction

Interviewees roles –General Managers –Disaster Recovery Coordinators –Project Managers (With more than 10 years of field experience) Critical –Transport (including roads and rails) infrastructures –Water (including Sanitation) sectors –Energy –Information and Communication Technologies (ICTs)

–General Managers –Disaster Recovery Coordinators –Project Managers (With more than 10 years of field experience) –Transport (including roads and rails) –Water (including Sanitation) –Energy –Information and Communication Technologies (ICTs) Between rehabilitation state to complete devastation state Queensland, Australia

–General Managers –Disaster Recovery Coordinators –Project Managers (With more than 10 years of field experience) –Transport (including roads and rails) –Water (including Sanitation) –Energy –Information and Communication Technologies (ICTs) Between rehabilitation state to complete devastation state Queensland, Australia

–General Managers –Disaster Recovery Coordinators –Project Managers (With more than 10 years of field experience) –Transport (including roads and rails) –Water (including Sanitation) –Energy –Information and Communication Technologies (ICTs) Between rehabilitation state to complete devastation state Queensland, Australia

Erica Mulowayi and Derek Walker

One of the main objectives of the research was to determine how the disruptive effects of the key elements of infrastructure interdependency can be reduced or minimised during the recovery period. An integrative literature review was performed to unveil the concept of interdependency from its original etymology and from other research areas (Mulowayi, 2017). Then an exploratory pilot study was conducted to investigate how the concept of interdependency can be contemplated within the post-disaster recovery context and provide an understanding of which elements of infrastructure interdependencies have the potential to impede the recovery effort. The research established the need for infrastructure providers from water, transport, energy and ICT sectors to collaborate during recovery in order to maintain the interdependencies that exist between their critical infrastructure systems. Interdependency in that specific context was defined as the reciprocal influence or relationship that exists between two or more infrastructures, through which the condition of one affects the condition of the other (Mulowayi, 2017). Examples of such interdependencies are depicted in Figure 28.3. The research revealed that for any types of interdependencies formed across critical infrastructures systems, regardless of the degrees to which they exist, resources have to be available and be shared across organisations (Mulowayi, 2017). The lack of collaboration between organisations involved in the recovery of infrastructure could lead to the lack of resources shared across organisations and this could potentially impede the recovery of damaged infrastructure. In her PhD, Mulowayi (2017) demonstrated that collaboration is closely linked to maintaining infrastructure interdependencies. Issues related to infrastructure interdependencies have

Water (Sanitation)

Water for cooling Water for cooling, emissions reduction

SCADA, Information, Communications

Power for pumps and lift stations, control systems

Water for fuels and gasoline production

Power for switches & operating equipment

Energy (Electricity)

SCADA, Information, Communications

Transport for distribution, supply, and collection

Transportation & delivery of services Information & Communication Technology (ICT)

SCADA, Information, Communications

Transport (Roads, Rails)

Delivery and transportation of fuel and natural gas derivatives, and energy utilities

Power for lighting, signalling, and switches, for fuel and lubricants to operate transport vehicles

Figure 28.3  S ervices provided through physical and cyber interdependencies (Source: Mulowayi, 2017) Note: Supervisory, Control and Data Acquisition = (SCADA)

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the potential not only to impede the recovery efforts of critical infrastructure systems, but also to delay the rehabilitation of community back to normalcy. Alternatively, the lack of communication and information can impede the coordination of recovery activities and result in cascading and escalating failures of other infrastructures. According to Mulowayi (2017), a successful disaster recovery project is implemented from a community-development perspective and is set to follow well-coordinated recovery activities, which are implemented through collaboration between organisations involved in disaster recovery efforts. The lack of effective collaboration not only compounds the impacts of natural disasters, but also affects the rebuilding of resilient infrastructures during post-disaster recovery. Although an all-agency model was created through QRA, most respondents revealed that they experienced issues with the communication and collaboration channels across state, local and federal government agencies, as well as with non-governmental agencies and the communities (Mulowayi, 2017). The recovery efforts, including prioritisation activities, are driven by available funding. Local governments rely on the state and federal government to provide the necessary funding to rebuild back stronger infrastructures and reduce interdependency issues during recovery (Queensland Reconstruction Authority, 2014). According to some, the disparity between the demand and supply of financial resources between state and local government experienced during the 2010/11 floods recovery was essentially due to the lack of clear communication and collaboration (Mulowayi, 2017). This played a significant role in impeding the ability to form an effective, single integrated unit to ensure integrated coordination of recovery activities. Most respondents revealed that during the 2010/11 floods their organisations relied on the communication and collaboration channels established by their Local Disaster Management Groups (LDMGs), which in most instances only took place once in six months in their Local Disaster Coordination Centre (LDCCs) (Mulowayi, 2017). Respondents from Organisations 1 and 2 revealed that it was during such meetings that information regarding issues related to infrastructure damages was provided. From respondents’ perspectives, those meetings were irregular and not sufficient to gather all the necessary information needed for the recovery process (Mulowayi, 2017). Some respondents from Organisations 3 and 4 however, revealed that, due to the unexpected level of damages from the floods, there was informal collaboration that took place outside of LDCCs meetings. Organisations could choose when and how to collaborate, depending on the needs and requirements of their recovery process. This indicates that collaboration during recovery was a reactive rather than a proactive endeavour. According to respondents from Organisation 4, collaboration and communication channels could have been more effective if they were clearly established before the disaster. Most respondents also highlighted the need for collaboration to be implemented through regular joint meetings before and after the disaster, during which effective communication and sharing of information could take place across organisations involved in the recovery (Mulowayi, 2017). The interviews also showed that, during the 2010/11 recovery, there was a strong need for resources to be received and information to be shared across organisations (Mulowayi, 2017). However, most respondents revealed that their motivations for collaborating with external organisations were essentially driven by their flood-operation routine, including the need for compliance with disaster regulations and policies (Mulowayi, 2017). It appeared that collaboration, to a certain extent, was considered as part of an operational routine that needed to be followed. These organisations highlighted that the roles of interdependent infrastructures consist of transferring or sharing resources that contribute not only to the functioning of other infrastructures, but also to their recoveries. This would contribute to preventing failures from cascading and escalating from one infrastructure to another. 617

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Table 28.3 presents major remarks from interviewees that illustrate infrastructure availability. Table 28.4 presents major remarks that illustrate infrastructure transferability from the Mulowayi (2017) study. Organisations 1, 2 and 3 indicated that an essential prerequisite to beginning the recovery effort is the presence of resources or services that contribute to the rehabilitation and recovery of an infrastructure (Mulowayi, 2017). These highlight issues relating to effective integration of various participating organisations and teams in the recovery process as well as issues around the quality and effectiveness of their cross-team collaboration. In several instances, respondents G12, D12, P11, and P12 from Organisation 1 and respondents G21, G22, S21, S22, P21, and P22 from Organisation 2 provided cases where ‘the lack of resources from one infrastructure also affected the supply of resources and services needed to begin the recovery effort of others infrastructure systems’. Six respondents: G21, G22, S21, S22, P21, and P22 from Organisation 2 provided examples where the lack of collaboration, including the lack of communication and information sharing, impeded the coordination of recovery activities and this resulted in cascading and escalating failures of other infrastructures. According to respondent G11, there was a series of impact events that followed from the road flood damage: ‘towns were isolated, roads were taking quite long to be rehabilitated, and there were no resources to begin the recovery of sewerage systems’ G11. Another respondent, D12, added that even when roads were repaired, some of the utilities providers were still out of reach due to the damage to their own infrastructures and as a result could not supply resources needed to start the recovery of sewerage systems. Furthermore, two respondents recalled that: [the] power station from Mount Stuart was dangerously running low on fuel with just 10 hours of fuel supply remaining. Roads were closed in many regions of Queensland including in Brisbane where the fuel needed to come from. The entire North Queensland was at risk of power outage and this would have cost enormous budgets to restart the power station (G11, P11). However, as demand peaked across the city, priority was given to the most affected regions, resulting in some of recoveries being delayed without any means of receiving and providing resources to other infrastructures (G11, P11). Thus, according to respondent P11, without the supply or transfer of resources from one infrastructure to another, recovery could not begin. The incapacity to access and transfer resources through transport infrastructures in a timely manner resulted in cascading and escalating failures, which subsequently delayed the recovery processes of various other infrastructures (Mulowayi, 2017; Queensland Reconstruction Authority, 2014, Queensland Government, 2011, 2012). This indicates that for any type of interdependency, whether physical, cyber or geographical, resources would have to be available and ready to be shared. Organisations have to be not only able but also willing to collaborate and to provide and share resources with other organisations involved in recovery infrastructures. This reinforces the need for effective crossorganisational integration and collaboration. Some respondents provided insights on some useful ways in which organisational collaboration could have been improved to maintain infrastructure interdependencies during postdisaster recovery (Mulowayi et al., 2015b; Mulowayi, 2017).

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An IPD approach to disaster recovery Table 28.3  Major remarks on resources availability from Organisations 1, 2 and 3 (Adapted from Mulowayi, 2017) Respondents

Major remarks on infrastructure availability

Organisation 1

G12, D12, P11, and P12

Organisation 2

G21, G22, S21, S22, P21, and P22

Organisation 3

D31, D32

Organisation 4

G41, G42

••

••

D12 The unavailability of infrastructure also affects the accessibility to resources needed to begin the recovery effort. G12, D12, P11, and P12 Infrastructure availability also has the potential to result in cascading failures across other interdependent infrastructures and this can directly affect the community. G21, G22, and S21 The lack of communication and information impeded coordination of recovery activities. There was no information on how to start and as such most organisations did not know where to begin the recovery activities and which approaches needed to be undertaken in order to quickly recover infrastructures. S21, S22, P21, and P22 Failure of an infrastructure system such as energy system can cascade to ICT system and eventually escalate to other infrastructure systems such as transport, and water infrastructure, thus impeding the recovery effort. D31, D32 To a certain extent, the unavailability of an infrastructure does not always affect the functioning of the other infrastructures, particularly when efficient preparedness and preventive measures are implemented in advance to operate infrastructures after disasters. P31, and P32 Although damages of road systems resulted in cascading failures, failures did not escalate across interdependent infrastructures. G41, G42 Although infrastructure availability has the potential to impede the recovery effort of interdependent infrastructures, the lack of financial resources can significantly impede postdisaster recovery as well.

These respondents mentioned that having regular meetings before and after the disaster will help build trust and maintain strong relationships between organisations involved in the recovery. According to some respondents (G12, D12, P11, and P12), pre-disaster meetings will allow them to clearly establish who their future collaborators are and how to build effective communication channels with them. Chapter 13 of this book discusses the importance of trust and commitment in IPD. Other respondents (G11, P11) suggested the need for additional training to be provided to personnel involved in the recovery process. This will facilitate better definition of roles and responsibilities of those involved in the recovery process and help

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Erica Mulowayi and Derek Walker Table 28. 4  Major remarks on resources transferability from Organisations 1, 2 and 3 (Adapted from Mulowayi, 2017) Respondents

Major Remarks on Resources Transferability

Organisation 1 G11, P11 P11 Without the supply or transfer of resources from one infrastructure to another, recovery would not begin. G11, P11 The incapacity to physically access and transfer resources through transport infrastructures in a timely manner resulted in cascading and escalating failures, which subsequently delayed the recovery processes of various other infrastructures. Organisation 2 G21, G22 G21 The lack of resources transferability can affect the coordination of recovery activities and also delay the recovery effort of interdependent infrastructures, resulting in cascading failures across interdependent infrastructures. G21, G22 The unavailability of an infrastructure will impede its resources production and without resources; there is no need of transfer and interdependency would fail. Organisation 3 D31, D32 D31, D32 Transferability of both physical and virtual resources plays an important role in starting the recovery process of critical infrastructures. Organisation 4 G41, G42 G41, G42 Effective mitigation measures during recovery reduced issues related to resources transferability.

••

to clarify key organisations from which resources will be shared during the recovery. Chapter 12 of this book discusses specific aspects of human resource management within an IPD context. A number of respondents listed the need for common and shared information systems and a single point of control. According to these respondents, emergency action plans should be available not only to government agencies and private organisations, but also to the community. Respondents called for more transparency and for the community be made aware of the areas at risk of flooding in their local regional boundaries. This point illustrates how an IPD-platform facility of shared communication systems may be of value in improving collaboration and may lead to team members having a better understanding of how their plans and actions potentially impact others.

Discussion and analysis This chapter posed two research questions: 1 2

What features of IPD and collaboration are relevant to disaster recovery projects? How did principal actors in the 2010/11 Queensland floods reconstruction recovery collaborate in practice?

We focussed on one research study (Mulowayi, 2017) but also referred to other relevant recent examples of disaster recovery that adopted an IPD approach and also grappled with the need for close and intimate collaboration. However, the Christchurch earthquake disaster recovery effort also provides a salient case study of participant organisations forming a formal alliance to achieve close integration and collaboration. We referred readers to citations which they may follow up on if so desired (Le Masurier et al., 2006; Francis et al., 2018). One paper in particular 620

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explains how the Stronger Christchurch Infrastructure Rebuild Team (SCIRT)1 was formed and how it operated (Walker et al., 2017). We aim in this chapter to illustrate what is possible in terms of IPD application through the presented case study. We believe that through our review of the literature this approach is being adopted more commonly in one or other form of IPD. Documented case-study research material and reports of the SCIRT experience is unfolding and currently there is a dearth of publications to help better understand examples of disaster recovery from an IPD perspective.

Features of IPD and collaboration relevant to disaster recovery projects Question 1 sought to identify features of IPD that are relevant to disaster recovery projects. Question 2 relates to how the case-study evidence may be applied to the Collaboration Framework to make sense of what occurred during the disaster recovery process. Relating these features more broadly to the Collaboration Framework (Walker and LloydWalker, 2015) discussed throughout this book, to be consistent, we use the 16 dimensions (as characteristics or features of IPD) to answer the question. Readers may wish to refer to Chapter 2 for an outline of the Collaboration Framework and Chapters 6, 15, and 21 for more detailed information on the framework’s elements. Table 28.5 helps answer questions 1 and 2 from the more general perspective of the three core components of the Collaboration Framework, namely the foundational, behavioural and processes, routines and means that shape the level of collaboration and integration achieved for any project or program of work. The case-study data reveals some level of IPD but with limitations. Figure 28.1 indicates that there is integration at the higher organisational level and Figure 28.3 illustrates some of the connectivity and interdependence of platform facilities for collaboration. Comments by participants from case-study organisations cited in Table 28.3 and Table 28.4 provided some evidence of collaborative and IPD behaviours but the main missing link for this Collaboration Framework component is that there is no expectation of a commitment to innovation and participants may engage in blaming others without that being considered an offence. We see little evidence of formal Component 3 – Processes, routines and means being required and designed into project procurement arrangements. In answer to research questions 1 and 2, we conclude that for the case-study examples there was an informal level of IPD and collaboration achievements but that this had not been designed into the project procurement and delivery arrangements that were applied for this disaster recovery program. The level of integration was not explicitly defined in an alliance agreement as, for example, in the case of the SCIRT in New Zealand.

Conclusions This chapter tackled an emerging are of potential IPD experience. It aimed to explore how IPD may be applied within a context in which there is acute urgency to ‘get on with the job’ and where there may be a strong desire and vision to help people recover from a disaster. This strong motivation to achieve exceptional results within a highly challenging context would appear to favour an IPD, collaborative approach. We discussed some theoretical aspects to explain how disaster recovery projects share some similarities but important differences with commercial and other ‘regular’ project contexts. We then focussed on one research study that comprised four case-study organisations engaged in what may be considered as a disaster recovery program, the aftermath of a significant flooding event. This served to illustrate the challenges and approaches undertaken in the case-study 621

Motivation is high to collaborate due to the urgency and human and commercial impact. Results need to be achieved rapidly and there are high levels of potential competing demands for resources and a high need for system integration to be efficient and effective. The level of integration did not allow the establishment of official joint governance structures though, in general, the outcome vision and strategy was consistently held by all participants in the disaster recovery. All had the best interests of the affected public in mind, plus the recuperation of business and repairing the environment were key shared objectives, though each participant may have had their own organisation’s imposed governance priorities to follow. While risk was recognised differently by all parties in relation to their expected performance, the overall risk implications imposed by the disaster was commonly understood. The communication platforms of email and other forms of common platforms for exchange of PDFs and digital pictures, etc. may have been high but there was no integrated building information model (BIM) used across all parties to the recovery. Integrated modelling to shape strategy was not evident. The participants across disciplines did not share a common location and so the chance of serendipitous interchange leading to surprisingly positive collaboration was left to chance encounters. In general, therefore, we suggest that high levels of integration and collaboration were not ‘designed-in’ as is seen from examples in other chapters in this book. There was no doubt about how a platform of a shared vision for the outcome drove collaboration and the level of integration that was achieved but this was more due to informal rather than formal arrangements that might bind participants together to use these common platforms. The study indicates no evidence of purposefully comprehensive integration of platforms for communication or shared ways to work collaboratively. Behaviours in disaster recovery situations in general are supportive of collaboration where possible and integration where feasible. The reliance is therefore on how individuals and groups make sense of their situation and how they may behave in a collaborative and integrated manner to contribute to achieving the ‘vision’. This informality of the relationships, rather than participants being locked into a statutory or contractual collaboration agreement, leaves it open to chance as to just how collaborative and integrated the result may be. Thus, leadership – authentic leadership – is a vital behavioural component so that ‘the right thing’ is done and supported, even though this may place individuals or groups at risk of being criticised as not performing as explicitly instructed by their ‘home base’ organisation.

Component 1 – Foundational elements: Motivation and context; Joint governance structure; Integrated risk mitigation; Joint communication; and Substantial co-location.

Component 2 – Behaviours: Authentic leadership; Trust–control balance; Commitment to innovate; Common best-for-project mindset/culture; No-blame culture.

Case-study comments

Collaboration Framework component

Table 28. 5  Collaborative Framework analysis of the case study

Component 3 – Processes, routines and means: Consensus decision-making; Focus on learning & continuous improvement; Incentivisation; Pragmatic learning-in-action; Transparency & open book; Mutual dependence and accountability.

The commitment to innovate may be tempered by fear of failure within an emergency situation but, on the other hand, common sense often prevails when trying something new may yield positive outcomes. In general, the emergency exerts a best-for-outcome mindset as people engaged in these projects are highly motivated to make a positive contribution to the recovery’s impact. The evidence of no-blame behaviours between groups may be generally mixed but with careful management it may contribute to a positive environment. However, perceptions of any ‘us and them’ behaviour may lead to blame attribution when problems arise between organisations and participants who are in essence within a voluntary collaboration network of integrated organisations. In general for disaster recovery projects, there may be specific government agencies or organisations established to coordinate the disaster recovery work and this may entail varying levels of integration of teams and involved companies. However, there are rarely formal arrangements such as those found in alliancing for infrastructure projects discussed in other chapters in this book. Thus, there are few formal routines, processes and requirements for cross-disciplines or cross-firm entities within a project to reach consensus. Often there are no specific commercial incentives specified for these types of projects/programs. Without formal integration mechanisms for companies, there is no reason for transparency through open-book systems for participants to be informed about how resources are allocated. There may be an informal understanding of the level of the mutual dependence of participants in these projects but unless an alliance is established formally, there is no formal recognition of participant interdependence and accountability.

Erica Mulowayi and Derek Walker

program of projects. We also drew into our discussion some insights from the Canterbury region of New Zealand and the Christchurch earthquake reconstruction in which an alliancing model was adopted. It could be argued that this chapter should have focussed on a comparison of these two disaster recovery programs but we felt that the scope of such a study might become excessive. We have been able to provide answers to the research questions posed and include insights from other disaster recovery programs. In summary, we observe a different set of complexities encountered in disaster recovery projects that make them somewhat different to the IPD cases explored and discussed in other chapters in this book. Integration at the macro level is becoming more common with integration of government departments, NGOs and the disaster recovery business supply chain but the degree of integration is often loosely coupled. Collaboration is also heavily reliant on informal rather than formal means. Some of this may be explained by the acute disruption experienced in disaster recovery. There may be value in further work being undertaken to study disaster recovery programs across disaster types and there are reports on many of the potential candidates for earthquakes, tsunamis, floods, bushfires and cyclone damage. We leave that work to others but suggest that the IPD lens may be a good one with which to make comparisons.

Note 1 For more information about SCIRT refer to URLs below:www.fletcherconstruction.co.nz/projects/transport/ stronger-christchurch-infrastructure-rebuild-team and www.alchimie.com.au/home/our-work/projectsoperations/stronger-christchurch-infrastructure-rebuild-team-scirt or, to better understand the alliance objectives and a copy of the alliance agreement, see URL https://scirtlearninglegacy.org.nz/story/ alliance-objectives the New Zealand Auditor General’s overview report may be found at URL https:// www.oag.govt.nz/2013/scirt.

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INDEX

37-day blitz 161–162, 374, 377–389, 469 3BL (triple bottom line) 5, 17, 473, 508, 515, 565 activity theory: perspective and activity systems models 483, 485–501; case study example 490–499; contradictions and disturbances 489–497; cultural history theory (CHAT) 486, 488 actual outturn cost (AOC) 9, 158, 583, 591, 595–598 agile project management 151–153, 348, 357–358, 369–370; scrum 348, 369–370; sprint 348, 369–370 alliance leadership team (ALT) 24, 28, 159, 162, 170, 180–184, 191, 273, 281–282, 315, 326–329, 346, 370, 377–378, 387, 401–404, 409–410, 413, 419, 433, 435, 454, 456–457, 462, 464–465, 468, 57–573, 577, 593, 596, 598 alliance management team (AMT) 24, 28, 158–159, 162, 170, 179–185, 223–226, 282–284, 315, 325–327, 336, 346, 370, 377–378, 401–404, 410, 413, 419, 433, 435, 454, 456–458, 462, 465–468, 570–573, 598 alliance manager (AM) 28, 57, 153–156, 159–161, 207, 211, 219–227, 254, 281, 284, 324–326, 333, 376–377, 389, 402, 409, 412–414, 433, 466–467, 472, 476, 517, 565, 570–573, 598–599 alliances/alliancing 6–10, 25–39, 41, 45–46, 49–59, 70, 74, 78, 91, 155–159, 168–192, 201, 204, 207–214, 219–221, 223–236, 240–241, 246, 251–259, 270–277, 282–285, 289, 306, 310–311, 315–342, 353, 367–380, 384–388, 396, 413, 423–424, 427, 429, 432–435, 454–479, 493, 498–499, 503–504, 506, 508–520, 527, 529,

559, 567–576, 581–602, 622–624; defined 7–9, 207; evolution and global IPD forms 49–59 alliancing practices: in Australia and New Zealand 7–9, 26–27, 35–39, 52, 157–159, 204, 283–284, 366–367, 373, 423, 427, 432–433, 609–621; in Finland 55, 157–158, 187, 189, 201, 204, 212, 283, 307–310, 385; in the Netherlands 55–56, 59, 233, 370, 427, 503; see also Level Crossing Removal Authority (LXRA), Level Crossing Removal Program (LXRP) Artificial Intelligence (AI) 59, 137, 222, 246, 350 Baulog 379–389 benefit(s): delivery, management, realisation 3–4, 34–38, 43, 59, 69–81, 160–163, 171–174, 180–181, 188–189, 215, 246–251, 259, 266–267, 269–271, 278–282, 290–295, 299–300, 306–310, 335–338, 351, 353, 361, 371, 383–385, 400, 402, 409, 420–422, 427–429, 444–451, 457, 465–471, 484, 486, 508–511, 513, 515–520, 527, 529, 532, 538, 557–569, 574–576, 581–600 best-for project/program 7–8, 16, 27, 30, 32–33, 36, 159, 164, 173, 176, 179–180, 189, 191, 201–202, 204–206, 212, 214–215, 220, 237, 241, 251, 256–257, 269–274, 283, 294, 316, 323, 326–327, 331, 334–339, 342, 370–374, 419, 425, 429, 432–435, 457, 460–463, 468, 473, 476–479, 483, 509–512, 514–515, 559, 567, 569, 571, 574, 622–623 best-value (BV) see value: best value, value for money (VfM), value proposition Big Room 49, 158, 190–191, 212–215, 309, 369–370, 498

627

Index Build Own Operate (BOO)/Build Own Operate Transfer (BOOT) 42, 44, 46, 47–48 building information modelling (BIM) 8, 27, 30, 32–33, 35, 46, 49, 52–54, 74, 76–77, 79, 87, 89, 95–96, 99, 115–118, 129, 131, 135, 137–139, 164, 186–188, 190, 212–213, 215, 249, 345, 349, 353, 356, 365, 372, 434, 441–442, 444–446, 451, 471, 487, 489, 492–493, 496–500, 527, 534–537, 541, 547, 550–555, 569, 622 careers 34, 145, 158, 174, 204, 235, 245–255, 259, 303, 472, 544 CIB ii, xiv, xix, 10, 42–43, 60, 555 client/client characteristics etc. see project owner (PO) collaboration: behaviours 4, 8–9, 21, 27, 36–37, 42, 44–48, 53, 74, 78, 90, 145, 157–159, 163–165, 168–170, 175, 179, 186, 190, 197, 201, 209–216, 224–227, 234–241, 251–257, 264–267, 270–274, 278–283, 288, 315–342, 374, 394–387, 396, 411, 419–420, 426, 435–436, 454–456, 465, 477–478, 515, 576, 622–623; and co-creation of value 74–76, 205–206, 290; communication technologies and processes (other than BIM) 25, 27, 35, 84, 91, 164, 170, 178, 185–188, 190–191, 215, 246–247, 254–256, 307–308, 320, 342, 349, 352, 394, 399, 434, 441, 449–451, 486, 488, 497, 552–553, 617–622; culture 9, 23–24, 27, 36–38, 99, 107, 158–159, 164, 169, 179, 186, 189, 197–198, 201–202, 205, 207, 209–215, 223, 226, 231–235, 251, 254, 256–257, 266, 295, 303, 325–326, 329–331, 338, 387, 397, 413–414, 419, 435–436, 455, 460, 510, 514, 518, 559–560, 571, 573, 600, 622–623; motivation 3–6, 27, 35, 164, 171–178, 206, 212–213, 228–241, 256–257, 332–333, 378, 387, 463, 472, 485, 515, 560, 617, 622 Collaboration Framework (description of elements) 26–39, 168–192, 223–227, 315–342, 454–479 commitment: and trust 264–285; to be innovative 27, 30–33, 36, 215, 256, 331–334, 342, 569, 622–623 common data environment (CDE) 49, 75, 78–79, 95, 123, 499, 534–536, 546, 552–555 community of practice (CoP) 57, 160–161, 412–13, 466–467, 472, 498 complex/complexity 4–6, 10–11, 22, 25, 27, 32, 42, 48, 55–57, 59, 71, 77–78, 80, 85–87, 90, 93–95, 100–104, 109, 118, 143–148, 151–158, 161–165, 172–185, 189, 203–204, 209–211, 213–215, 221–230, 246–247, 248, 250, 253, 255, 268, 288, 295, 296, 302, 307–308, 317–318, 320–321, 324, 334, 341, 350–351, 360, 365, 368–369, 372, 376–381, 386, 388, 398, 408, 427, 431, 435, 443, 445, 449, 458–459, 463, 472, 485–488, 491–492, 496–501, 506, 508, 510–517, 520, 538, 540, 551,

559–560, 571–572, 581, 585–588, 593–595, 609, 612, 624 computer-assisted virtual environment (CAVE) 308, 358, 434, 471, 498 consensus and consensus decision making 455–464; see also decision making creativity and design thinking 69, 142–165, 220, 225–226, 247, 250, 255, 265, 331–334, 337, 341, 350, 355–356, 373, 381, 393–395, 400, 551, 567, 590, 596 Crossrail 11, 45, 48, 50–51, 71, 204, 214, 276–277, 372, 385–387, 394, 412, 465–466, 469, 503, 512 critical success factors (CSF) see performance and KRAs: CSF 4 cultural perspectives: individual, institutional, national, organisational, professional, theory, workplace 22–27, 32–38, 45, 55, 58, 78, 81, 99, 103, 107–119, 142, 144, 149–150, 153, 157–159, 164, 169–170, 178–179, 186, 189, 197–216, 219–220, 225–228, 230–236, 247, 250–258, 264–267, 269, 271–272, 277, 281–283, 288, 295, 300, 303, 310, 315–316, 321, 325–333, 338–342, 347, 371, 378, 387, 396–404, 411–414, 417–419, 424, 426–427, 429, 432–436, 440, 454–456, 459–467, 472, 475–479, 486–492, 495, 497–501, 504, 506–507, 510, 512, 514–518, 520, 544, 546–552, 559–560, 562, 565, 569, 571–573, 576, 590, 592, 600, 608, 622 Cynefin Framework 145–148, 15, 154, 175–176, 184, 203, 209, 318, 321, 458–459 decision making 9, 11, 22, 27–33, 37, 42, 47, 69, 73, 86–87, 91, 114, 116, 146, 158–159, 164, 170, 186, 202, 209, 215, 222–223, 273, 278–279, 281–282, 295, 308, 318–319, 322, 330, 336, 341, 349, 350, 387, 395, 297, 419, 431–432, 435, 443–444, 447–450, 455–464, 474–475, 477, 479, 508, 512, 514–518, 526, 529, 532, 548, 569–570, 581, 612, 623 design and construct (D&C) – design and build 9, 41–42, 44, 46, 48–49, 52–53, 75, 77–79, 88, 91, 96, 122, 175–176, 181, 237–238, 270–272, 279, 367, 371, 374, 421, 423, 440, 474, 484, 487, 526–528, 529–530, 532, 535, 537, 541, 543, 548, 554, 572, 589 design for manufacture and assembly (DfMA) 52–53, 74–75, 77, 123, 128–129 design thinking (DT) 142–165; see also creativity and design thinking disaster: recovery 5, 144, 172, 224, 605–624; New Zealand earthquakes 484, 608–610, 620, 624; Queensland floods 605, 607–620, 624 early contractor involvement (ECI) 21, 47, 175, 547 engineering procurement contracting (EPC) 44, 46–47

628

Index ethics 11, 52, 73, 80, 145, 156, 177, 186, 189, 202, 204, 210, 211, 215, 220, 224–225, 230, 248, 265, 270, 288, 295, 297–299, 302, 337, 339, 320–327, 330, 372, 417, 424, 427, 473, 478, 503–520, 545, 562

150–153, 157, 159–164, 177–178, 181, 183–185, 201, 205, 208–209, 212–215, 221–222, 224, 226, 239, 247–248, 255–259, 268, 271, 275–276, 280, 304, 307, 309–310, 316, 320, 322–323, 329, 331–335, 339–340, 347–357, 360–363, 365, 368, 379–381, 386–387, 393–401, 405–414, 419, 426, 429, 433, 440, 444, 455, 462, 464–473, 488, 494, 498, 501, 537, 545–548, 552, 560, 572, 574, 576, 590, 595–596, 599–600, 621 institutional theory 11, 21 23–27, 32–34, 81, 170, 179, 187, 201, 210–213, 230, 233–236, 265, 267, 272, 284, 315, 326–327, 333, 341, 399, 411, 413, 417–418, 427, 435, 454, 475, 488, 491, 501, 504, 507, 516, 520, 576 internet of things (IoT) 122, 137–139, 246–247, 349, 449, 547 integrated project delivery (IPD): definition 6; globally 61, 48–59

facilities management (FM): and operability 8, 46, 71, 74–75, 87, 91, 93–96, 129, 140, 145, 368, 380, 423, 431, 439, 440, 442, 477–478, 484, 526–541, 546, 548, 551–552, 560, 586–587, 606–607 Farmer Review 76, 79, 89–90, 349, 554 Global Leadership and Organizational Behavior Effectiveness (GLOBE) 200–201, 214, 461 governance: and in IPD forms 11, 24–26, 54, 93, 144–145, 157–158, 162–163, 229, 251, 274, 333, 365, 368, 371–372, 417–436, 447, 451, 489, 507, 509, 514–518, 520, 529, 540, 545–546, 550, 558, 561, 563, 566–567, 569–577, 591, 609, 622; in alliancing and the Collaboration Framework (specifically) 26–35, 170, 178–187, 191, 207, 210–215, 233–235, 256, 264, 273, 281–284, 320, 326–329, 333, 373–374, 387, 409–413, 418–420, 433–436, 456–470; in decision making 162–164, 202, 207, 365, 456–462, 465–479, 587, 590; in the project front-end 72, 418, 420–424, 566, 581; from an institutional theory perspective 23–24, 81, 170, 179, 204, 210–213, 230, 233–235, 265, 267, 327, 333, 413, 417–418

joint coordination committee (JCC) 160, 333, 412–413, 466–467, 472 job characteristics model (JCM) 229–241

human capital 81, 153, 219–220, 227, 321–322, 414 human resources (HR)/human resource management (HRM) 157–158, 245–246, 252–259, 387, 544–545 information asymmetry 182, 189, 192, 205, 214, 325, 371, 378, 429, 433, 440, 460, 478, 492 information sharing: information management, information technology (IT), information communication technology (ICT) 38, 48–49, 55, 75, 77–79, 84, 91–92, 95–96, 99, 109, 111, 116–118, 123, 129, 135, 136–140, 146–147, 158, 160. 185–189, 191, 201–202, 205, 213–215, 220, 228, 239, 247, 256–257, 267, 278–279, 281, 290, 293, 300, 302, 305–310, 319, 321, 325, 327–328, 336, 349, 355–356, 366, 370–371, 374, 378–379, 386, 393–399, 404, 404, 408, 413, 425–426, 431–435, 439–451, 459–460, 463, 469, 473, 486–489, 492, 494–500, 526–531, 534–537, 541, 546, 548, 552–554, 570, 581, 586, 589, 595, 601, 610, 612–613, 615–621 innovation 5, 11, 25, 36, 42–43, 49, 51–54, 58–59, 67–68, 76, 80, 84, 95–96, 99, 128, 142,

key performance indicators (KPI) 16, 36–37, 58, 160, 170, 178, 180–182, 239, 258, 273, 284, 308, 327, 332, 335–402, 405, 408–410, 412–413, 433–435, 465–469, 477, 484, 518, 557–558, 567–574, 577, 582 key results area (KRA) 5, 9, 25, 28, 36–37, 58, 152, 160–161, 164, 169–170, 175, 178, 180–182, 207, 258, 273, 275–276, 284, 316, 325–327, 331–338, 387, 396, 400, 402, 409, 412–413, 419, 429, 433–434, 455, 465–468, 477–478, 506, 509–510, 512, 518–519, 545, 557–558, 560–561, 564–576, 582, 595 knowledge management (KM) and organisational learning (OL) 11, 31–39, 43, 48, 94, 99, 145, 239, 252, 258, 300, 321–322, 335, 353, 362, 365, 375, 393–414, 493, 499–501 knowledge: skills, attributes and experience (KSAE) 58–59, 143, 145, 151, 153–156, 165, 176, 189, 197, 205, 211, 219–241, 245, 250, 254–255, 258, 264, 288, 332, 334, 394–395, 424, 520, 544, 560 leadership 24–26, 36–37, 57, 145, 151, 157, 159, 169, 176, 188–189, 201–202, 207, 211, 220, 222–224, 232, 253, 255, 274, 279, 296–297, 385, 399, 402, 409–410, 433, 444, 459–460, 472, 506, 517, 548–549, 559, 560, 594, 610; authentic 27–28, 30–33, 159, 164, 215, 223, 256, 316–326, 331, 335–342, 419, 441–442, 456, 478–479, 520, 569, 622; Global Leadership and Organizational Behavior Effectiveness (GLOBE) research program 200–201, 214; see also alliance leadership team (ALT)

629

Index

occupational health safety and well-being (OHSW) 88, 228, 368, 484, 453, 543–555 Olympic Games,: London 11, 21, 48, 51, 71, 129, 412, 503, 586–587 owner participant (OP) 7–9, 21, 28–29, 31–32, 36, 43–49, 55, 74, 174, 178–190, 198, 202, 209, 220, 275, 304, 325–327, 331–336, 353–354, 370–371, 384, 387, 393, 400, 405, 408, 457, 464, 469, 476, 478–479, 510–511, 559, 567, 570–571, 574–576, 583, 589–593, 596–600

355, 368, 374, 387, 396, 400, 402, 404, 407, 409, 412, 419, 425–426, 432–435, 440, 457, 461, 465, 467–468, 470, 472, 474, 477, 483, 486, 492–494, 503, 508–509, 510–512, 514, 518–519, 526–538, 547, 549, 553, 557–577, 581–582, 584, 587–588, 590, 593, 595, 602, 622 power asymmetry 22, 33, 37, 44, 54, 58, 86, 91, 182–183, 188–189, 191, 199–202, 205, 207–209, 211, 213–215, 220, 251, 281–284, 291–294, 299–300, 325, 327, 371, 378, 397, 401, 412–413, 418–419, 426, 429, 433–434, 440, 456–461, 473, 478, 498, 510, 512, 544, 548, 550, 571, 592 Private Finance Initiative (PFI) 42, 44, 47, 78 procurement systems see project delivery forms; New Engineering Contract (NEC); Project Alliance Agreement (PAA); Public Private Partnership (PPP) project/program alliance agreement (PAA) 7, 23, 32, 50, 158–160, 164, 179, 181–182, 186–189, 191, 206, 209–213, 270–271, 273, 275–276, 278, 280–281, 283–284, 324–325, 341, 367, 387, 412, 419, 431–432, 457, 462, 468, 509, 514–520, 567–568, 570–576, 590–592, 598, 621, 624 project delivery forms 6, 8–10, 20, 25–26, 41–59, 184, 207, 221, 230, 235, 241, 250, 252, 254, 269, 272, 327, 367, 467, 511, 570, 574, 589 project owner (PO)/client 4–9, 21, 24–25, 28, 31, 33, 36–38, 41–48, 50–51, 54–59, 71–74, 76–80, 84–96, 111, 122–123, 160, 164, 171–175, 177. 184, 189, 203–204, 210, 212, 220, 231, 233, 237–238, 250, 252, 258–259, 265, 269, 271–277, 280, 288, 291, 294–297, 308–310, 330, 325–327, 335, 348, 351, 353, 358, 367–368, 372, 374, 376, 379, 382, 384–385, 393, 395, 399, 409, 411, 418, 423–431, 434–435, 465–466, 468, 473, 475, 483, 486, 492, 494, 497, 499, 505–506, 508, 510–511, 514, 530, 538–544, 547–550, 554–555, 559–570, 573–577, 583–584, 586, 589, 598, 600, 608, 612; see also owner participant OP psychological contract (PC) 265, 277–280 Public Private Partnership (PPP) 42, 44–48, 52–53, 373, 385, 421, 423, 439, 527, 537–541, 572, 588, 608

partnering 7, 27, 39, 42, 45–56, 74–75, 78, 169, 235, 274, 283–284, 568 performance 6, 8, 9, 23–26, 29, 31, 33, 35–37, 43, 47–51, 58, 69, 72–73, 76, 80, 85, 88–89, 92, 122, 124, 130–131, 144, 158–160, 163, 177–182, 197, 200, 207, 210, 219, 223, 227, 232–233, 237–240, 249, 251, 254–258, 272–273, 275, 279–284, 290, 292, 294, 300, 303, 309, 316–319, 325–327, 335–338, 341, 348–349, 352,

resilience 5, 23, 143, 148, 151–153, 155, 162–163, 172, 210–211, 221–222, 225, 240, 253, 257, 316, 321–323, 325, 332–334, 369, 385–387, 413, 516, 518, 559, 576, 605, 608 risk, risk sharing, dealing with conflict 4, 6–8, 25, 27, 29, 30–35, 37, 42, 44, 48, 56, 85, 88, 90, 116, 134, 155, 157–159, 162, 164, 170–179, 182–191, 207, 215, 224–226, 266, 268, 271–275, 289, 292, 294, 299, 323, 330,

learning by doing: pragmatic learning in action 27, 30–33, 38, 155, 158, 164, 204, 209, 215, 224–225, 257–258, 319, 322, 324, 398, 455, 461, 470–473, 479, 560, 569, 623 Level Crossing Removal Authority (LXRA) 7, 160–161, 172, 177, 187–192, 205–207, 258, 307, 324, 329, 333–334, 341, 375, 408–409, 411–412, 463, 465–467, 469, 471, 477, 572, 601 Level Crossing Removal Program (LXRP) 34, 72, 76, 159–163, 171–172, 176–177, 181, 184–185, 189, 205, 304, 306–307, 315, 324–345, 353, 362, 366, 373–379, 385, 387–388, 394, 408–413, 455, 460, 462–463, 465–479, 527, 557, 560, 574, 592 litigation and no-litigation 9, 159, 271, 341–342, 348, 434–435, 457, 512, 570, 573 minimum conditions of satisfaction (MCOS) 338, 474, 565, 567–569 New Engineering Contract (NEC) 50–51, 53, 59, 367, 384, 387, 446, 490, 498, 500 no-blame culture 9, 37, 153, 159, 164, 201–202, 207–209, 211, 215, 220, 234, 239, 250–251, 254–255, 257, 270–272, 281, 283–284, 316, 325, 339–342, 386–387, 396, 400, 413, 419, 429, 433, 460, 477, 498, 570–573, 576, 622–623 non-owner participant (NOP) 7–9, 24, 28–29, 31, 51, 55, 58, 74, 157–158, 163–164, 174, 178–180, 183–192, 198, 209, 220, 258, 304, 307, 325, 327, 331, 336, 370–371, 376, 384, 387, 393, 400, 402, 404, 409, 457, 468–470, 478–479, 511, 559, 560, 567, 573–577, 583, 589–601

630

Index 340, 347–348, 369, 377–378, 381–384, 396, 402–404, 428, 432, 434–436, 461, 468, 473, 479, 486, 489, 492, 497–500, 505, 508, 517, 520, 537–541, 547–555, 560, 562–563, 569, 573–576, 586, 591–594, 598, 606, 618, 620, 622 robotics 59, 123, 140, 222, 246, 543 stakeholder 9, 11, 43, 55, 58–58, 70–72, 76, 80–81, 93, 96, 136, 144–145, 152, 154–158, 164, 171–173, 177, 180–181, 184–185, 197, 206, 220–221, 224–226, 231, 264, 269, 284–285, 288–311, 320–324, 327–328, 331, 335, 338–342, 353, 357, 365, 372, 378, 381–384, 387, 400, 418–428, 431–432, 445, 451, 463–464, 470–471, 474, 477–478, 488, 499, 501, 503–520, 530–531, 536, 538, 545, 547, 550, 557–569, 574, 577, 585–588, 595–600, 610, 612 success factors 4, 561, 591; see also performance; minimum conditions of satisfaction (MCOS) supply chain/supply chain management (SCM) 12, 45–46, 48, 51, 54, 68, 71, 77–80, 87–91, 126, 140, 177, 179, 184–185, 190, 274, 291, 297, 300, 304, 306, 310, 348, 365, 371–388, 412, 428, 487, 529, 532, 535, 537, 544, 546, 550, 624 systems: and business 5–6, 10–11, 20–22, 25–26, 29–30, 32–35, 42–43, 45–49, 69, 78–79, 84–89, 100, 123–140, 170, 172–173, 176, 178, 182–188, 202–203, 207, 214, 219, 221–222, 224, 225–229, 256, 270, 272, 274, 277, 280, 282, 288, 292–294, 298, 300, 304, 308–311, 318, 329, 332–333, 349, 351, 355, 357–359, 361–362, 368–369, 372–374, 379, 382, 384, 387, 389, 393, 395–397, 399, 401–402, 404–410, 412–414, 417, 419–425, 428, 430, 432–434, 440–449, 459, 461, 465, 469–472, 474–475, 478, 485–501, 527–536, 544, 546–550, 553, 555, 561, 563, 565, 573, 576, 586–587, 605–607, 609–611, 613, 616–620, 622–623; complex adaptive 101–103, 118; Continental perspective/Heidegger 99, 104–107; last planner system (LPS) 213, 276–277; lessons learned knowledge (SyLLK) 99–101, 103–104, 107–119; thinking 70–75, 91–96, 99–119, 142–165, 198, 221, 268–269, 318–319, 324, 336, 365, 395–396; see also institutional theory; Cynefin Framework target 26, 95, 126, 135–136, 140, 152, 155–156, 158–159, 161, 225, 236, 239, 254, 259, 289, 301, 307, 319–320, 336, 361, 377–379, 402, 409, 412, 429, 460, 497, 504, 527–533, 537, 550, 562, 573–576, 584, 588; target outturn cost (TOC) 8–9, 55–56, 157–162, 171, 177, 258, 275–276, 279, 309, 333, 370, 375–376, 429, 432–434, 468–469, 473–475, 484, 493,

498, 557, 565, 567, 569, 571, 573–576, 581–602; target value design (TVD) 213, 309, 498 Tavistock 42–43, 73, 78–79, 85–87, 90, 92 Terminal Five (T5) 5, 11, 21, 23, 45, 48, 50–51, 59, 158–159, 173, 190, 204, 214, 233, 276–277, 334, 365–366, 372, 384, 412, 503, 576, 587 transparency 27, 30, 32–33, 36, 38, 77, 114–115, 158, 164, 211, 215, 256–257, 295, 326–327, 373–374, 396, 405, 419–420, 424–425, 433, 436, 455, 473–475, 479, 504, 514–521, 536, 539, 569, 571, 576, 591–592, 620, 623 trust: and commitment 20, 25, 38, 50, 53, 57, 77, 99, 103, 113–118, 129, 145, 153, 156, 159, 164, 197, 211, 220, 225–226, 250, 251, 254, 256, 264–285, 288, 302, 331–333, 367, 386, 396, 404, 419, 426, 429–431, 434, 436, 486–487, 494, 497–500, 504, 507, 509, 512, 515–516, 518–520, 539, 544, 551, 569, 573, 592, 599, 613, 619, 622; and Collaboration Framework 27, 30, 32–33, 36, 38, 99, 103, 173–174, 179, 181, 186–187, 190, 215, 316–317, 320–331, 339–342, 419, 458, 462–464, 473–479, 569, 622; trust theory model 156, 225–226, 250, 251, 254, 256, 266–272, 509, 515–516 Turnkey 42, 44, 46–47 value: best value, value for money (VfM) and value proposition 4–5, 35, 70, 170–172, 177, 181, 220, 275, 297, 301, 316, 331, 335–339, 353, 387, 405, 421–422, 425, 427, 433, 444–445, 448, 463–466, 474, 487, 499, 503, 514, 537–540, 544, 550, 558, 561–565, 571, 581–582, 590, 592–593, 600–601; co-creation and value chains 57, 75–79, 94, 96, 142, 144, 190, 288–311, 351, 371, 374, 386, 411, 412, 508, 561, 565, 586–588; concepts/theories 69–73, 80–81, 106, 148–150, 268–272, 366–371, 402, 520, 548–549, 561, 585–586, 588, 620; cultural and ethical 22–23, 35, 41, 48, 84, 86, 92, 100, 109, 114, 197–216, 268, 280, 285, 300–303, 317, 400, 402, 404, 414, 460–461, 488, 503–515, 519–520, 528–529, 592, 606; engineering and (value) management 69–71, 530; value-orientation skills 154–156, 164, 169, 174–176, 178, 183, 225–226, 231–241, 265, 319–328, 331–334, 353–356, 395–396, 456–457, 472, 477; value adding and benefits 3–6, 11, 17, 35, 43, 45, 47–48, 53, 55–56, 69–81, 94, 96, 106, 116, 118, 134, 160, 247, 250, 259, 362, 374, 376, 381, 388, 402, 418, 420, 470, 478, 550, 558–559, 586–588, 596, 620; see also benefit(s) Virtual Reality (VR) 311, 348–349, 356–360, 471, 498, 550, 552–553

631