The collaborative approach to winning and delivering major infrastructure projects has become increasingly popular in the last decade, and for good reason. Outcomes using this approach have been ground breaking and have raised the bar for high performance. More and more, owners and providers from a range of industries are also seeing the benefits of adopting a collaborative approach for major projects. Lessons learned in the infrastructure industry around the advantages of a collaborative approach can be applied to all businesses delivering major projects.
The traditional method of negotiating contracts on major infrastructure projects has been the master-servant approach, where the owner and provider both attempt to play “I win, you lose” to achieve an outcome that benefits themselves but disadvantages the other party. The cost of this method is the adversarial relationship it breeds, limiting collaboration and openness on key issues and opportunities, and promoting a culture of blame. This gave rise to the collaborative approach to contracting, where the focus is building constructive relationships and satisfying all parties. This approach has gained traction as it is superior for handling complexity and uncertainty – a key issue for major projects.
While the traditional approach plants the seeds for conflict, the collaborative approach recognises that effective relationships are achieved through mutual beneficial outcomes and aligned expectations and objectives. It relies on all parties sharing what they think, feel and want upfront, this is critical to build the trust required to deliver the project successfully. Benefits and risk are shared or allocated upfront, collective responsibility for performance is taken and the emphasis is on solutions, not blame.
All businesses involved with major projects can benefit by taking a collaborative approach to contract design. Project owners gain greater value for money, reduced contracting costs, a lower risk profile, and the achievement of stakeholder outcomes. Providers receive greater profit certainty, reduced contracting costs, less risk, and the opportunity to earn repeat work and long term opportunities.
This excerpt has been reproduced from a paper I have previously written.