I'm 13. Organizational facilitation of cooperation in phase 1
13.1 Overall
In this point, we consider some of the elements that have been highlighted as particularly important in the research reports and which can perhaps be considered as belonging to the so-called “soft values”.
We believe that these elements are also important to take into account when carrying out projects in a traditional way, and where they are often included in the PA book and routines.
An underlying dimension of these elements is that one gets the opportunity to build a good culture between the individual participants in the project, where one focuses on trust-building behavior and transparency.
13.2 Startup Meeting/Gathering
We always recommend that start-up meetings be held and we have written a part about this in an article about meetings at the traditional implementation models. That article is just as relevant when conducting interaction, and can be read here.
The article deals with the start-up meeting when you have come over in phase 2, but is equally valid when you are going to start interacting in phase 1.
Whether the start-up meeting is held in the form of a gathering that spans several days is not the most important thing and here you can think of a number of variations.
The key is that you set aside so much time that the individual participants have a real opportunity to get to know each other, roles, clarification of expectations, etc.
13.3 Workshops
Among the elements highlighted as particularly important in the first Concept report (Sintef, 2016) is the use of workshops.
Workshops will typically deal with specific topics and where you want to bring the whole team together to unleash creativity and creative joy if possible.
The aim of the workshops will be to find good solutions — together.
13.4 On-the-Way Evaluations
Interactions carried out in large projects will — for natural reasons — continue over a longer period of time. As time goes on and you work more or less closely together — and across your own parent organizations — you will have experiences with each other and cooperation that are good, and less good.
Either way, everyone will benefit from evaluations.
If you institutionalize evaluations so that everyone knows they are going to be evaluated and what they want to be evaluated on, you will be able to start a targeted work early on to get a good culture of interaction.
In order for this to succeed, it is an idea to bring in external assistance so that it is not only those who sit in the line who have the power of definition at all times. It may make sense to show that even those with formal leadership positions in an interaction are evaluated.
13.5 What about collocation?
The research reports show that there are shared perceptions and experiences of collocation.
If we were to summarize the experience, it is probably most correct to say — on a general basis — that collocation will be natural in some phases but not in others.
One should have a flexible attitude towards co-location.
Firstly, it can be very costly because you have to pay for travel time, and the working days can also be shortened since those concerned count their working day as having started and ended their permanent place of work, respectively.
Secondly, colocation for very many people who are not otherwise used to sitting together will entail a costly logistics.
Third, collocation that is justified in a desire for everyone to be equally well informed about everything that is happening, and at all times, will necessarily entail dead time for many.
Fourth, colocation will cause many to lose access to their usual environment. For many, it would normally be desirable to be able to discuss solutions, thoughts and ideas with colleagues. These will not be as accessible when you are sitting outside in a project as a result of co-location.
The counterpart to these moments is, of course, the synergies that one can have from being co-located.
Synergies in the form of brainstorming, short path for input and clarification from professionals in adjacent disciplines, etc. can also be achieved through, for example, workshops and/ or regular meetings.
In addition, there are digital tools such as drawing programs and document hotels.
He's 14. Incentives
14.1 Overall
When talking about interaction in the form of incentive agreements, it is primarily interaction in phase 2 with target sum, bonus and malus that is the focus.
We have no experience of anything else, nor do the research reports suggest that incentive schemes are used in Phase 1.
On the other hand, Concept Report No. 74 addresses a challenge that advisers work only on hours, and this applies to both Phase 1 and Phase 2.
In phase 2, the consultants will mostly be subordinate to the general contractor and busy with detailed design, while in phase 1 they are busy preparing the preliminary project. Whether they are then subject to the builder or the general contractor will probably vary.
There seem to be two challenges highlighted in Concept Report No. 74. Firstly, that the consultants have a vested interest in producing as many hours as possible, and secondly, that the advisers do not have the same incentive as the general contractor to keep costs within the target sum since they do not risk malus.
Our starting point is that the advisers largely do the job that is commissioned from them, and that it is largely a matter of governance and mission understanding.
Nor can we see that advisers can take part in a bonus/malus scheme if the starting point is that the advisers risk paying for overruns consisting partly of supplies of materials and equipment and partly of accrued hourly costs to the performers. The profit element of an adviser's hour is far too low to take that kind of risk.
However, it is conceivable that an incentive scheme for the participants in phase 1 would be able to support the objectives of interaction, and where the premise is equally that the advisers work hourly without taking part in any bonus/malus scheme in phase 2.
14.2 Incentives for those designing in phase 1
The task of the designers in phase 1 is to produce a preliminary project with corresponding function and performance descriptions.
The more mature a pre-project is, the more realistic the calculation becomes and the less the risk of unexpected costs during the implementation phase (phase 2).
This means that good pre-projects ensure predictability to the builder and the general contractor certainty that the sum offered or target price is correct. For both the builder and the general contractor, the risk of disagreements and disputes is also reduced.
If this is the right starting point, it could be interesting to establish an incentive scheme for those participating in Phase 1 that builds up to, among other things, these objectives for Phase 2.
We envisage an incentive scheme composed of several elements.
The most important element is based on the result of phase 2.
If the end result is better or about equal to the calculation (target sum and/ or agreed contract sum), it indicates that the preliminary project was good (and mature). A number of unforeseen costs, disputed change order requirements, etc. were released and that in itself is a good indication that the designers in Phase 1 did a good job.
An amount allocated for distribution between the participants in Phase 1 could be an incentive for them to ensure that the preliminary project is optimal.
In this case, there is a risk that such an incentive scheme will inadvertently motivate the designers to use unnecessarily many hours in Phase 1, for which they are also paid.
This can be countered by having made realistic estimates in advance of how many hours are naturally used for design in phase 1. If these estimates are exceeded, an alternative may be that the additional consumption reduces the amount set aside for the bonus for Phase 2. One can also imagine that savings provide a giveaway in the form of a bonus that is paid out when phase 1 has ended (and regardless of the outcome of phase 2).
How the bonus will be distributed should be agreed between the parties. A starting point may be that the bonus is distributed proportionally in proportion to the proportion of the original calculation one had, but the challenge is that such a distribution can stimulate spending more hours than necessary to precisely position oneself to get a larger share than one should. In other words, it is not easy to find a solution that protects against any abuse. Our comment on that is that most schemes can be abused, but that every project should find its solutions.
What we are absolutely sure of, however, is that the incentive should be paid to each of the advisers who participate, and so that those people who participate get their share of the incentive.
Individuals involved in Phase 1 should not have their own incentive schemes from the employer where one risks these schemes influence the individual to find sub-optimal solutions for the benefit of themselves (and not for the benefit of the interaction).
Finally, mention is made of an experience stated in Concept Report No. 74 that advisers should not be obliged by fixed price agreements. Such agreements will, with a high degree of probability, a moderate treatment of the mission with reduced effort, etc., as a consequence.
14.3 Incentive separately for general contractor in phase 1
We have previously discussed the fact that the general contractor's incentive for participating in an interaction is not to get hourly pay for its experienced operations personnel.
The general contractor usually participates in phase 1 of the cooperation in order to obtain, if possible, the contract itself in phase 2.
At the same time, it is known from many contracts that the builder most often sets as a prerequisite when phase 1 has ended that one should be able to call an open tender where the general contractor from phase 1 of the cooperation risks losing to one who offers a lower price.
We would challenge the builders to drop exactly that caveat.
If the parties to the interaction agree on a target price and continue the interaction in phase 2 on those terms then that's fine. Similarly, we believe it must be right to let the general contractor from phase 1 get the contract in phase 2 if he or she is willing to carry out the work at an acceptable fixed price. The starting point for such a fixed price will then be the calculation with the addition of a certain risk layer.
In both cases, the general contractor will be in control of the situation in phase 1, and also get an incentive to do a good job with its best people in phase 1 because you no longer risk losing the entire assignment in an open bidding competition.
This proposal for an incentive scheme is based on an experience that the researchers behind Concept Report No. 74 drew after studying 105 interaction projects. As we read the report, the builders had made very little use of their opportunity to replace the general contractor when transitioning from phase 1 to phase 2.
This despite the fact that it could have been challenging at times to interact in Phase 1.
The explanation was, and is (we will assume), that the builders felt a kind of security in that the general contractors could project as well from Phase 1 that for that reason alone they opted out of involving a completely new general contractor in Phase 2.
Consequently, the developer will not assume a high additional risk by relaxing its requirement of full freedom to open a tender, but undertakes to use a general contractor from phase 1 of phase 2 — provided that the other conditions for carrying out the project are met.
I'm 15. Concluding comment
There is undoubtedly much to grasp when accounting for interactions and the various criteria that can bring success or failure.
We agree with the point of view that it's “the people it depends on,” but it gets a little too simple.
It is also the case that even the traditional implementation models are successful if all parties have staffed their organizations with people who feel loyalty to achieve good results for the project as such.
Having dealt with our share of disputes, and not least assisted in the implementation phase of projects that have not resulted in disputes, we would argue that the right people are the most important success factor in all projects — regardless of implementation model.
That said, any implementation model requires that the parties have agreed on the framework conditions within which individuals should operate.
The framework conditions must support the objectives that have been set, and this is done through the contracts concluded. It also happens through the understanding and respect for the mission that the parent organizations have, and show to their people.
We have tried to highlight a number of points that we partly have experience with ourselves and partly have taken from research reports.
