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teamswork

Quarterly2014 issue 1

teams work

Quarterly2014 issue 1

THIS QUARTER

Teams Work 4

BY JERRY JACKSON

BUSINESS DEVELOPMENT

Everybody Is Talking, But No One Is Communicating 6

BY ETHAN COWLES AND KEN ROPER

The Hidden Secret of High-Performing Leadership Teams 10

BY KIM MORTON AND EMILY NOWACKI

Business Development Success Takes a Team 14

BY CYNTHIA PAUL

QUARTERLY INTERVIEW

Teaming for Success at Fortis Construction: Jim Kilpatrick 18

BY TOM ALAFAT

Construction Materials Will Hill

Engineers and Architects Steven Isaacs

Heavy Highway/Utilities Jay Bowman

International Steve Darnell

Private Equity George Reddin

Manufacturers and Distributors John Hughes

Surety Tim Sznewajs

Business Development Cynthia Paul

Leadership Tom Alafat

Mergers and Acquisitions Stuart Phoenix

Project Delivery Gregg Schoppman

Trade Contractors Randy StutzmanKen Roper

Strategy Brian Moore

Talent Development Ken Wilson

Compensation Grant Thayer

Perspectives Lou Marines

CONTACT US AT:[email protected]

Board of Directors

Hank HarrisPresident and Chief Executive Officer

Stuart PhoenixChairman

Landon FunstenWill HillScott KimplandLee SmitherCharles ThomsenCharles ThorntonScott Winstead

Copyright © 2014 FMI Corporation. All rights reserved. Published since 2003 by FMI Corporation, 5171 Glenwood Ave., Raleigh, North Carolina 27612.

Printed in the United States of America.

Departmental EditorsPublisher andSenior EditorJerry Jackson

Editor andProject ManagerKelley Chisholm

Group ManagerSally Hulick

Graphic DesignerMary Humphrey

Information GraphicsDebby Dunn

FEATURES

Leverage Individuals to Maximize Team Performance 24

As you assemble your teams for projects and internal company initiatives,

take the time to think of the unique traits and skills of each individual team member.

BY MATT MARSHALL AND SHIRLEY RAMOS

Teaming to Win 32

Take a sharp look at what you need from a teaming partner before you start approaching

potential companies. First and foremost, you are looking for the right partner.

BY CYNTHIA PAUL

Increase Value With Building and Systems Commissioning 42

The ability to integrate technology and scale effectively will provide great value

to building owners and providers of technical building services.

BY TIM HUCKABY AND RUSSELL CLARKE

A Tale of Two Partnerships 48

A structured approach to collaboration, based on consistency and accountability,

can contribute to the success of a multiple-contract project.

BY BILL SPRAGINS

Team Conflict: Potential Dangers, Hidden Benefits 60

When handled effectively, conflict can lead to positive outcomes, such as

enhanced self-awareness, better teamwork, a more open and tolerant

environment, and greater personal growth.

BY TIM TOKARCZYK

Teamwork Without Groupthink 68

If groupthink and e-communications present dangers to be avoided, they also present

a tremendous opportunity to unlock, harness and develop your firm’s intellectual capital.

BY WALLACE MARSHALL

Building Relationships Through Zurich’s Stewardship Program 78

Our relationships are built on trust.

BY KELLEY CHISHOLM

Boosting Your Bottom Line by Empowering Front-Line Supervisors 84

A builder can reduce some costs, such as training budgets, with no negative

impact on the bottom line, right? Wrong.

BY SABINE HOOVER

Dear Reader:

Welcome to 2014 and the 11th year of FMI Quarterly!

Our theme for this issue is Teams Work. While always a possibility, our title is not a typo, but results from our usual playing with words. Teams DO work. Except when they don’t, a point raised by Wallace Marshall, a thoughtful contributor to FMI Quarterly, in his article, “Teamwork Without Groupthink.”

In fact, unless teams do work AND produce work, they do not qualify as teams, according to Merriam-Webster, which defines teamwork as “the work done by people who work together as a team to do something”(emphasis, mine). In other words, unless there is a result, a work product, it is a gross error to describe a group of people as a team simply becausethey were selected to be part of a team roster. Similarly, confusing the congeniality and bonhomie of a group with good teamwork even when nothing is being accomplished is also a substantial error. Teams work whenthey produce work. Good teams work when they produce good work.Simple? Not by half.

In this issue, we bring you some thoughts regarding using teams to land projects more effectively, tips for selecting team members, building teams,achieving teamwork among organizations to build projects more effectively,evaluating groups as to characteristics that build stronger teams … and much, much more.

We have two articles by Cynthia Paul — “Teaming to Win,” where she teams with Jeff McCord, business development director of Western Summit Constructors Inc., for his insights on teamwork, and a shorter piece,“Business Development Success Takes a Team.”

This Quarter:Teams Work

2014 issue 1 FMI QUARTERLY � 5

Bill Spragins offers two case studies that illustrate what successful partneredprojects look like in “A Tale of Two Partnerships.” Matt Marshall and ShirleyRamos team up with their piece “Leverage Individuals to Maximize TeamPerformance,” which looks at the unique traits and skills each individualmember brings to the team.

Tim Tokarczyk shows that when handled effectively, conflict can lead to positive outcomes in “Team Conflict: Potential Dangers, Hidden Benefits.”Kim Morton and Emily Nowacki talk about how to create high-performingleadership teams in “The Hidden Secret of High-Performing Leadership Teams.”

In our Quarterly interview, Tom Alafat speaks with Jim Kilpatrick, presidentof Fortis Construction Inc., to learn how the Fortis team works together and overcomes challenges. Quarterly editor Kelley Chisholm interviewsNancy Simonson and Karen Guentzel of our sponsoring partner, Zurich,about how various departments at Zurich work together as a team to makesure its customers feel valued.

We also have a few articles that focus on other topics, including featuresfrom Tim Huckaby and Russell Clarke in their “Increase Value with Buildingand Systems Conditioning” and Sabine Hoover in “Boosting Your BottomLine By Empowering Front Line Supervisors.” Ethan Cowles and Ken Roperoffer a shorter piece, “Everybody Is Talking, But No One Is Communicating.”

Teams can work. Hopefully, yours do. If you will pick a few ideas from thisissue, I’ll wager that they will work even better. Here’s to a successful 2014!

Sincerely,

Jerry JacksonFMI Quarterly Publisher and Senior Editor

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Departments

BUSINESS DEVELOPMENT Everybody Is Talking, But No One Is Communicating

“Everybody is talking, but no one is communicating.” This is a direct quotefrom a client about communications in his organization. One of the most frequently mentioned issues in organizational evaluations is “communication.”Most of us have gone through school; many even have college, and most arefluent in English. How can communicating be so difficult?

Admittedly, no one is perfect. When we mentioned that we were writing an article on communication to our families, they howled! All of themwanted to have editorial privilege over our article. They assured us that ourcommunication skills were not exactly a “thing of legend.” It is safe to say thatwe can all improve our communications, and we should want to.

Communication is a massive topic to tackle in life and especially in anarticle. What to communicate, how, how often, what media to use, timing,organizational communications versus communications between individuals— the list of possibilities is extensive. Communicating is paramount to gettingprojects built properly (technical applications) but also key to motivating,inspiring and managing the people working for you. Great managers are greatcommunicators.

The focus of the article is to discuss communication between individualsin organizations. Here are our top-10 communication challenges we see in the workplace and suggestions for solutions.

1. TRUST. People lack the skills and are not in an environment with high levels of

trust to have candid conversations concerning problems and issues thatpotentially have negative consequences. Frequently, an intimidating leadershipstyle is the root cause of a culture that is communication-impaired. In thisenvironment, trust is low and drama is high, which does not allow for candidconversations. Shutting down lines of communication is never a desirableoutcome, particularly the lines to the CEO, who, being the person at the top,may need to take immediate action on significant operating issues. Eventually,problems become apparent, but valuable time has been lost and options tomitigate the negative consequences are diminished. Building an environment


with high levels of trust is one of the foundations for candid conversationsand superior communications.

2. TIMELINESS. Procrastination and avoidance for difficult conversations do not improve

the situation. Project teams deal with massive amounts of information andvariables in the project delivery process. The three Cs — Communication,Cooperation and Collaboration — drive project performance. Delayingimportant conversations does not improve outcomes and typically prolongsand deepens the problem. Motivation and morale suffer, further eroding performance. Timeliness adds significant value to the communication processin environments demanding so much information and contributes to successfulresults. Quit procrastinating andjump on the opportunity to shareyour concerns and gain feedbackthat will enhance outcomes.

3. TIMIDNESS. Silent resistance is a favorite

for those prone to introversion and shyness. During an active discussionand debate, these people are sittingquietly taking in all the information.These people seldom volunteer orexpress their opinion during the discussion. They rarely offer otherfacts and circumstances. Presentingmultiple resolutions or a path forward provides the opportunityfor open disagreement or workingtowards consensus. The quietresisters do not say a word and leave the impression that there is consensus.In reality, these individuals do not support the direction and undermine theentire communication process. “Speak now or forever hold your peace” isonly a partial solution. Discussion and consensus building are important inmanaging a company and require a unified front from the management team.Participating in the conversation is required to support the outcome. Theeffective manager will draw out the timid.

4. TEMPERS. Messages with passion and emotions are motivating. The issue is not

about this type of communications but about those out-of-control situationswhen cooler heads do not prevail and communications go off unfettered withtempers fully engaged. Shoutfests seldom involve empathetic listening.Allowing time for emotions to calm down will enhance the communicationprocess and avoid regrets for communicating with our feelings instead of ourminds. We seldom win “arguments.” We all know this, but this situation occursmore often than we might like. Cool off and then have the conversation.

Discussion and consensus building areimportant in managing a company and require a unified front from themanagement team.

8 � departments

5. TIMING. The adage “timing is everything”

applies here. Have you ever hadsomeone sit in your office when you are under the gun to meet adeadline and start small talking withyou? How often does someone askyou, “Is this a good time to talk?”More than likely, not often enough.It is not just about being considerateand polite, but it also positivelyaffects quality communications.Scheduling conversations in advance

to gain the proper environment and audience for receiving the message isdesirable. Just because you are sitting in an empty room, staring off intospace, does not mean it is a good time to talk. You might be grieving the lossof a loved one, thinking through a project detail or brainstorming how best to broach a subject with a difficult owner. Plan your message and the timingof it for maximum outcomes.

6. TERMINATION. This is a significant communication challenge, especially for detailed-

oriented people. Gathering more information is always better, right? Somepeople love to talk about the issues and their concerns, but often are unableto move a decision across the finish line. The conversation appears to go on forever, with the introduction of more and more information. It is similarto quantitative easing, and there never seems to be a great time to quit.Sometimes it is better to make a decision instead of weighing the pros andcons of every alternative. If building consensus requires concessions, thenmake them. Moving forward with a blended solution is far better than anunsolved problem.

7. TREATMENT. This is a behavior-shaping skill in organizations. What you acknowledge

and reinforce will drive more of that type of behavior. In a seminar with 75 project personnel, the overwhelming response to the question, “Otherthan money, what is the one thing you would like more of?” was “Feedbackthat they were doing a great job.” Mistakes in this industry happen, and managers all too quickly provide instant feedback on the shortcomings andproblems. The same cannot be said about successes. Authentic positivefeedback is free. Communicate expectations of roles and responsibilities toensure people understand their jobs. Reinforcing positive behavior effectivelyhelps drive desirable outcomes.

8. TRAINING. Difficult conversations do not have to be unpleasant. Proper preparation

and structure of the message can prevent emotional and negative reactions by the recipient. Providing workshops on how to handle these difficult

Moving forward with a blended solution is far better than anunsolved problem.


communications is a valuable and profitable idea. People are your No. 1 asset.You want them properly trained in how to communicate difficult messages so that great performances occur. Providing all managers with effective communication skills training is invaluable.

9. TONE. Effective communication skills involve great listening skills. And yes,

pounding away on your cell phone is not listening! Multitasking tells thespeaker, “Your message is unimportant.” Listening is focusing on the sender’smeaning and not just hearing the words and adding your own spin or meaning.Go to parties, gatherings and anywhere people congregate and you will findthose that love to fill the air with words, oblivious to the receiver’s thoughtsand ideas. People dominate conversations and seldom think to ask questionsand get others to talk. Why should you ask others questions? There is a saying that “People do not care how much you know until they know howmuch you care.” Asking others questions says you care! Are you busy now or is this a good time to talk? Be prepared with your message if the answer is yes.

10. TOE-TO-TOE CONFRONTATION. Toe-to-toe confrontations are

successful if you are 6’6” and weigh275 pounds. You may get your waymost of the time by intimidatingpeople. But getting your way is not always the aim of good communication; rather, getting tothe right conclusion is the goal.Therefore, intimidation through confrontation is not useful, but earlyidentification of the problem is the first step to effective communication. Manydifficult conversations require discussion. Performance issues, project problems,owner disputes, money issues, quality or warranty issues and numerous otherunpleasant subjects all require addressing. Problems only get worse whenyou avoid confronting them. Developing confrontational skills, primarilypreparation, and structuring difficult communication is a skill you can learn.Avoiding delaying these meetings is a highly recommended activity.

Improving your skills and learning techniques to enhance success at communicating is a valuable activity worthy of investment. How do you rateyour communication skills? Do you recognize any of the issues above? Whenare you going to do something to improve your communication skills?

Successful managers motive and inspire their people and are effectivecommunicators. Are you as effective as you should be? �

Ethan Cowles is a senior consultant with FMI Corporation. He can be reached at 303.398.7276 or via

email at [email protected]. Ken Roper is a principal with FMI. He can be reached at 303.398.7218 or

via email at [email protected].

Providing all managers with effective communication skillstraining is invaluable.

10 � departments

BUSINESS DEVELOPMENT The Hidden Secret of High-Performing Leadership Teams

Teams are present in almost all organizations. In fact, more than twothirds of Fortune 500 companies rely on teams to accomplish their goals.1

Often, when leaders hear the word “team” or “teamwork,” they can immediately relate to a positive or negative experience they had in the pastrelated to a team. Unfortunately, we hear more about the negative storiesthan we do the positive.

The challenge for leaders today is that organizations increasingly rely ondifferent types of teams, rather than just a single leadership team or projectteam to accomplish work. Truly successful organizations have figured out how to develop, lead and operate on multiple teams at a time, in order toproduce great results. The root of their success starts with their leadershipteam, which is made up of various business unit leaders who are running thecompany. The secret to high-performing leadership teams is simple. Theyhave a clear purpose and highly aligned team members.

The challenge we face is that we may be on a leadership “team,” but arewe really a “team”? Decades of research seem to conclude that in order tobe a true team, the following must be true:

• The team is made up of two or more people. • The team has a common purpose and shared goals.• Team members rely on one another to get their work done.• Team members know who is on the team and what their roles are.

Most often, members of the leadership team would agree that, based on these criteria, their company’s leadership team is not a team at all.Unfortunately, it is common for people to put together a team withoutspending the necessary time clarifying a shared purpose and clarify roles. Inreality, the lack of clarity on roles and purpose is the most common cause forlow-performing teams. Unlike low-performing teams, great leadership teams

exceed the expectations of theirstakeholders, produce superiorresults and outperform competitorson a consistent basis. Given the criteria for what makes up a great team, only 21% of teams aretruly high performing.2 The stark realization that your team may not beperforming at the level you thoughtcan be a bitter pill to swallow.

The good news is that any teamcan improve its performance byspending time looking inward to create more clarity and alignmentfor everyone. Leadership teams can and should act as a team, and a high-

It is common for peopleto put together a teamwithout spending thenecessary time clarifyinga shared purpose andclarify roles.


performing one at that. Investing in team building at the top can be challenging,but it will make a big difference in your organizational performance overall.

The performance stakes are much higher for leadership teams. Being at the top echelons of the organization, a leadership team’s effectiveness isoften evaluated at the organizational level. For example, if an organizationperforms well (or poorly), the leadership team is held responsible. While manyfactors contribute to peak performance among teams, we have highlightedtwo foundational elements that will get you started on your high-performance path: developing ateam purpose and forming strongteam alignment.

DEVELOP A TEAM PURPOSEIn order to be a true team,

leadership teams must have a common purpose. For many teams, acommon purpose may exist but oftenis not communicated or implicitlyunderstood. Simply communicatingwhy the team exists in the first placewill provide guidance in decision-making, strategy and goals.

The main reason leadershipteams fail to articulate a meaningfulteam purpose is that a team purposeat the top often should be tied to theoverall success of the organization.For example, best-of-class executiveteams are purposed to increasefinancial performance, create anorganization that will continue to succeed past their tenure, or establish ahealthy and sustainable culture so all employees truly enjoy their work environment. It is important that the team purpose is not too broad, abstractor uninspiring. For example, if a team’s purpose is to “increase the bottomline for the organization,” that is much less inspiring than achieving financialsustainability or a sustainable culture. In order to develop a team purposethat is enduring and meaningful, consider the following:

• The team purpose should be closely tied with specific organizational goals.

• A team purpose should be inspiring and authentic to the team’s work.• The team purpose should help clarify which actions to pursue, goals to set and decisions to make.

By developing a team purpose with some of these suggestions in mind, a team can begin to create a clear vision for your future. Having clarity onwhy you are here together and what you are trying to achieve will improve

In order to be a trueteam, leadership teams must have a common purpose. For many teams, a common purpose mayexist but often is notcommunicated or implicitly understood.

12 � departments

the likelihood of becoming a peak-performing team. A few examples of teampurpose statements include:

• To advise the executive leadership team on overall strategy, financial performance and investments (Board of Directors).

• To provide the best leadership in our industry to ensure our firm maintains our competitive advantage (Executive Committee).

• To ensure our compensation system is fair and balanced and rewards high performance across the firm (Compensation Committee).

FORM TEAM ALIGNMENTAnother hidden secret to high performing leadership teams is creating

strong alignment between team members. This includes getting each teammember “on the same page” when it comes to roles and general team agreements.

Clarify RolesThough clarifying who is responsible for what on the team may seem

obvious, the reality is that few leadership teams have excellent role clarity.One reason is that these teams tend to be a collection of representatives orbusiness unit leaders of functional departments. For example, your team mayconsist of your CEO, the VP of finance, the VP of marketing and sales, theVP of operations, etc. The challenge with this team makeup is that leaderstend to act in the best interest of their business units rather than the larger

organization, creating silos amongteam members. The most successfulteams, however, do not establishroles based on job titles such as VPof Marketing and Sales but basedon relevant skills necessary toachieve goals.

A second reason why role clarity lacks in teams is that traditional leadership teams tend tobe crowded. Often, leadership teamsinclude all senior leaders from allbusiness units, thereby acting morelike a committee or forum than anactual functioning team. The oldsaying, “the more the merrier,” doesnot apply when it comes to a team ofsenior leaders who are responsiblefor executing strategy and overseeingthe well-being of a company. This

may mean that the number of people on your team is getting in the way ofgetting the results you desire. We recommend having six to seven memberson a leadership team, especially an executive team. Simply reducing the number of members on the leadership team is not easy, but having a clear

Often, leadership teams include all seniorleaders from all businessunits, thereby actingmore like a committeeor forum than an actualfunctioning team.


purpose for the team will help. Creating an understanding of the work thatmust be accomplished by the team makes it easier to identify members whoare needed based on skill, not simply on their titles.

Once the leadership team has established who the essential team members are and what their roles are, it is important to clarify expectations.Spelling out what each team member will be doing and what his or herexpected work output is will create further alignment and agreement amongteam members.

Establishing roles and clarifying expectations help team members rely on one another, because it is clear who is responsible for what and it buildsaccountability among team members. As mentioned earlier, these elementsmay seem obvious, but most teams do not take the necessary time to clearlyarticulate roles, responsibilities and expectations.

Establish Team AgreementsHow should our team members behave in meetings? How do we hold

each other accountable for our behaviors? How do we communicate witheach other? It is rare to hear thesame responses from all team members to questions like these. In contrast, teams that can answerthese questions in synchrony likelyhave a set of clear team agreements.

A team agreement is a set ofguidelines that clearly identifieswhat behaviors are acceptable andunacceptable on the team. Researchsuggests that when teams have aclear set of agreements, they aremore likely to perform at a highlevel. Individually, we may think we know how we should behaveand act on our team, but do we allreally agree? When team members fail to agree on what the acceptable andunacceptable behaviors are for the team, important activities, like meetings,can become a challenge.

In order to establish productive team agreements and help your leadershipteam reach peak performance, you must first determine behaviors by creatingmutually agreed-upon guidelines for acceptable and unacceptable teambehavior. In doing this, you can help build accountability by establishing whatthe penalties are for breaking agreements.

It is important to note that simply drafting your agreement is only thefirst step. Your team now needs to demonstrate commitment to this agreement.Teams can demonstrate commitment by trying some of the following:

• Display your agreement in a mutual team space.• Commit to using the language in the agreements.• Hold members accountable when they fail to follow the agreements.

Most teams do not take the necessary time to clearly articulateroles, responsibilitiesand expectations.

14 � departments

The steps listed above are not as easy as they sound and require consistentattention and effort. By committing to the team agreement, you are takingsteps to change the culture of your team to become more consistent, productive and accountable, all of which directly leads to high performanceamong leaders.

FINAL THOUGHTSIt may appear simple to create a high-performing leadership team,

when in reality it is a difficult process that does not happen overnight. Manyleaders do not take the time to set up their teams correctly due to the deep,strategic thinking required. While there are many elements that make up ahigh-performing leadership team, articulating its purpose and creating strongalignment within the team will get you on the right path. Simply starting theconversation within your team is a great first step. �

Kim Morton is a consultant with FMI Corporation. She can be reached at 303.398.7262 or via email at

[email protected]. Emily Nowacki is an associate at FMI. She can be reached at 303.398.7216 or via email

at [email protected].

1 Sivasubramaniam, N., Murry, W. D., Avolio, B. J., & Jung, D. I. (2002). A longitudinal model of the effects of team leadership and group

potency on group performance. Group & Organization Management, 27, 66-96.2 Wageman, R. (2007). Senior leadership teams: What it takes to make them great. The Hay Group. Retrieved from http://www.haygroup.com.3 Mathieu, J. E., & Rapp, T. L. (2009). Laying the foundation for successful team performance trajectories: The roles of team charters and

performance strategies. Journal of Applied Psychology, 94, 90.

BUSINESS DEVELOPMENT Business Development Success Takes a Team

Whether you use full-time business development staff or seller-doers,creating a sense of culture and teamwork in your get-work team is essentialfor keeping them motivated and focused. Most contractors inadvertentlyknock the wind out of the team’s sails without ever realizing it.

Customers inherently know that it takes a team of well-coordinated professionals to make their project a success. They are looking for the besttalent for their job, but that talent is more than one lone sailor adrift on thecurrents of the ocean. So why do so many contractors make relationshipbuilding an individual sport?

CREATING A SENSE OF CULTURE Creating a positive culture necessitates a foundation of shared experiences

and good feelings to take hold and grow. It requires everyone engaged to havea clear vision of the future, expected results and an understanding of theresources available to them as well as to current and future customers. It doesnot happen by accident, and it takes time. Culture unifies a team of people; it brings them together and sets the stage for achievement.

The old adage, “You find time to do the things you find important” holdstrue when building relationships with customers. Not everyone in your company has the responsibility of targeting and winning new customers.


All of the people in your firm are responsible for making sure customers getthe outcomes they hired your company to achieve, with the fewest numberof hassles possible.

How do you rate the time your team invests in customers’ relationships onand off projects? If 1 = a terrible job and 5 = is fantastic and sets the standardfor the industry, what score would you give your people:

What would it take to get each area of the company to a level 5?

WHO REALLY IS THE CUSTOMER? Getting clear on the definition of a customer is a great place to start the

conversation. Too often, our thoughts go to the economic customer, the one person that has the authority to select you or sign a pay request.

Hard-bid selection is established as a strategy to streamline the decision-making process and get the best price for construction. Common in manypublic markets, decision-making is frequently at arm’s length and focused onprice. Not all public buyers use hard bid as a way of picking contractors, nordo all private customers use non hard-bid methods for selecting contractors.

It is arguable if hard bid is the best way to secure final job costs. It does,however, set the stage for getting competitive early job costs.

Price is always a factor in contractor selection — sometimes it is a verysmall factor, but many times, it can be a gigantic element of the selection.Regardless, let’s focus first on thedefinition of a customer as the basisfor how contractors build relation-ships with current and new clients.

Customers are individuals that can choose to either use you or set the stage for picking someoneelse. Some customers have theauthority to say “yes,” but manymore only have the ability to say“no.” Both are customers and needto be treated well. Clearly settingthe expectation of how to work with customers is an important firststep to ensure they consistently aretreated well. You might even have a couple of different strategies onhow certain categories of customersare treated (e.g., key customers, economic buyers, preferred customers, etc.)

Let’s focus on customers where price is only a part of what they are usingto select the right construction team.

Clearly setting theexpectation of how towork with customers isan important first step toensure they consistentlyare treated well.

2 = Poor 4 = Good 5 = Fantastic1 = TerribleArea of Company 3 = Average

Estimating and PreconstructionProject ManagementField OperationsSenior ManagementCompany Overall

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CUSTOMERS BUY DIFFERENTLY TODAYThe recession changed a number of things in the industry, including

how customers select and contract with contractors. Two key changes haveoccurred in how customers “buy.” First, senior executives are reluctant torecommend a contractor to their team if the team does not already know thecontractor. Second, more selection decisions are being made by committees.If nothing else changed, your team now needs to spend more time with more individuals just to keep in contact with that one customer organization.Both of these have a huge effect on how you target customers andbuild relationships.

Have you successfully changedyour strategy and approach accordingly? Are you generating the results you should be?

BUILDING A GET-WORK TEAM Here are a few ideas to improve

your team by giving them the toolsand strategies they need to be successful in this new world of customer expectations:

• Vision. Create a clear vision of the type and depth of relationship that you want to create with new and existing customers.

• Priorities. Invest your time and effort by identifying the right customers and projects for your company.

• Tools and Strategies. Provide the tools and strategies your team will need to be successful in relationship building over the long haul. If the team only has a basic message to share with customers, what will it talk about on its second, third or 12th visit with the same customer organization?

• Roles. Understand the roles that each of your people will play. Who will be the lead contact, who needs to meet the customer before the next project opportunity, etc.? Build those roles based on the skills of the individual. Some of your people are best at talking about technical elements of the job, some conceptual design and estimating, some are great door openers — play to their individual strengths.

• Team meetings.Meet regularly with your entire get-work team and share current successes and lessons learned on recent projects. That gives them a rich foundation of information to share when in customer meetings and helps inform the conversations that are needed.

• Resources.Compile a list of current resources to call upon. Some can be marketing collateral, certainly. But key resources will revolve around people, experiences and results achieved on past and current projects.

• Customer groups. Classify your customers into groups — A’s, B’s and C’s or Bronze, Silver and Gold. Regardless, identify which customers

Create a clear vision of the type and depth of relationship that youwant to create with newand existing customers.


should get what kind of time and attention. All customers are important,and all should be treated well, but not necessarily the same.

• Skills and knowledge. Give the team the skills and knowledge that each member needs to be successful.

TAKING THE NEXT STEP If you liberate the talent of your organization to spend the time to build

customer relationships, you will become positioned for both current andfuture work. Take the time to make everyone in your company understandthat the impact they can have on lasting customer relationships is significant.

Give them the tools, skills and insights needed to have multiple conversations with customers. Create a customer-focused culture in supportof their efforts and you will find you have plenty of people willing and able to help you build lasting relationships with both new and potential clients. �

Cynthia Paul is a managing director with FMI. She can be reached at 303.398.7291 or via email at

[email protected].

Quarterly Interview

Teaming forSuccess at FortisConstruction

Jim KilpatrickFORTIS CONSTRUCTION

If we can facilitate the personal growth and

professional developmentof our people, then we’re a success as a leadershipteam. And, even more

importantly, our customersare going to be gettingextraordinary service.

FMI interviewed Jim Kilpatrick because of the sterling reputation Fortis hasgained from its customers and employees. Known for its achievements in themarketplace, Fortis has a fanatical focus on pleasing its clients and striving to maintain a core ideology and culture that has propelled its success.

FMI wanted to learn how the Fortis team works together and overcomeschallenges, and what it is doing to create a robust leadership pipeline thatwill lead them successfully into the future.

Alafat: You have managed to form and maintain a unique culture at Fortis.How would you describe it?

Kilpatrick: Our culture is the thing we are most proud of, and we are notafraid to talk about it. We like to say that our culture is the magic that unifiesus. We have a very open, collegial atmosphere in our office and that translatesto the job sites. It is a team of “A” players that holds each other accountable.

Alafat: Fortis Construction’s core ideology is shown in Exhibit 1. How doesthat influence your culture?

Kilpatrick: The core ideology defines the character and traits of the peoplewho can work here.

Alafat: Can you tell our readers how your leadership team arrived at thecore purpose and values, and what you do to reinforce them?

Kilpatrick: It started with our struggles to articulate a strategic directionaround where we wanted the company to be in five and 10 years. We werealready believers in Jim Collins’ “Built to Last” philosophy on what makes


Fortis Construction Inc. opened its office in 2003, when a

large national general contractor shuttered its Portland, Ore.,

office. A small group affected by the shutdown banded

together to form what has become in the past five years a

midsized GC with annual revenues in the $200 million to

$250 million range. Fortis is focused on the core markets of

higher education, health care, commercial offices and data

centers. While headquartered in the Pacific Northwest, it is

now delivering projects across the U.S., Europe and Asia.

20 � quarterly interview: jim kilpatrick of fortis construction

enduring companies. We had developed our core values the firstyear of our existence and used thoseas our guiding philosophy. A phoneconversation with Ron Magnus ledto a discussion that what we neededto complement those was a purpose.With that foundation, we could then work on an envisioned future,but without both those elements,we would continue to struggle. Ittook the six-person managementcommittee, a larger leadershipgroup and the entire company tobrainstorm, vet and ultimately discern what makes us different.We spent 11 months in developmentand were stuck and bogged downmore than once. In the end, I thinkwe were transparent and inclusivewith the process.

Alafat: How long has the currentleadership team been in existence,how many members are part of theteam, and how were they chosen?

Kilpatrick: The team has been inexistence for nine years with sixmembers. Members were chosen through natural selection and included thethree founders plus the three best project managers who had leadershippotential. Although the company was new, our relationship with these managers was not. They were the cream of the crop and handpicked to bethe core team we wanted to build around. We had worked with these youngmanagers for the past five years and knew their character and potential.

Our management team actually started with a seventh member — a superintendent who could more closely represent the superintendents andcraft personnel in management decisions. During the next three years, wemade the difficult decision to excuse him from that role. We found that hedid not bring the depth of perspective and leadership we had hoped. Thatwas a very difficult discussion.

It’s important to understand that we are very intentional in avoiding nepotismat all levels in our company. It’s a much healthier organization when everyoneknows that there is no potential for that. David Aaroe, executive vice president,and I had both experienced the motivational problems nepotism createswith young superstars.

Jim Kilpatrick

Jim graduated in 1982 from UC Daviswith a bachelor’s degree in civil engineering. Hired as a project engineerby a Silicon Valley GC, he worked hisway up to project manager. Kilpatrick left after eight years to follow his mentors who were forming a new start-up contracting firm. He moved toPortland to turn around and run aregional office when he was 37 years old. At the age of 43, he founded Fortis Construction Inc. with two other colleagues when circumstances causedthe company they were a part of to close several offices around the UnitedStates. Jim has served as president forthe past 10 years, as Fortis has matured.


Alafat: What factors contributed to creating a high-performing leadership team?

Kilpatrick: The fact that we all knew each other for anywhere from five to 10years before we started Fortis helped. We knew each other well enough tobe absolutely sure that we each held similar core values. It also helps to havediverse experiences. We all have a deep respect for the different personalstrengths and perspectives we each bring. I think that is crucial. Making sureat least a couple of people on the team are really smart is always good too.

Alafat: Why is that?

Kilpatrick: Being comfortable enough with each other to challenge a direction or strategy openly is important. You need to have people withstrong convictions and enough self-confidence to voice and argue their opinions and who are matureenough not to hold on too tightly.

Alafat: How are decisions typicallymade on this team?

Kilpatrick: First and foremost, wefollow our core values. That shouldbe a litmus test for every decisionwe make. Is it consistent with ourcore values?

We also contemplate the long-termbest interest of the company. I don’t think any of our decisionsare based on short-term return. We also very consciously put ourown self-interests last.

When we debate a topic, we temper the initial knee-jerkresponse. We’re all results-drivenindividuals and we want to jump tothe answer. It’s hard work to avoidemotional reactions. We do that by challenging each other with intellectual arguments and respecting the process of talking through decisions.If you can support your position both passionately and intellectually, you willhave no problem getting us all in agreement.

We all understand that at times we each need to compromise on the small stuff. And we are grown-up enough to be able to do that. When weleave a room, we are each prepared to support our direction and each other implicitly.

Exhibit 1

Fortis Construction Core Ideology

WE MAKE AN

IMPACT

RELATIONSHIPS PIONEERING

WINNING PRIDE

22 � quarterly interview: jim kilpatrick of fortis construction

Alafat: On a scale of 1 to 10 (1 = low, 10 = high), how would you rate the level oftrust among team members, and why? What factors contribute to that score?

Kilpatrick: I would rate it a 10. Shared experiences certainly contribute to that score. Some of that only comes with time working together. When

you’ve been in the trenches together, you form a bond. It’s like a band of brothers.

Alafat: On a scale of 1 to 10 (1 = low,10 = high), how would you rate thelevel of conflict on this team?

Kilpatrick: I’d rate it a 4. It is healthyto have some conflict and notalways be perfectly like-minded.

Alafat: How is conflict handledwhen it occurs?

Kilpatrick: First off, we each know it is not personal, and differing opinions can be a healthy thing. We

are respectful of each other’s perspectives. We each respect a persuasiveintellectual argument. We know we don’t always have to solve everythingimmediately. Occasionally, we just allow time to pass as we think aboutissues and contemplate others perspectives.

Alafat: How would you characterize success for your team?

Kilpatrick: One thing we talk openly about is the joy of shared success. Thatmeans focusing on others. We talk about success as having happy employeeswhose family members will tell us that they work for a great company. If we canfacilitate the personal growth and professional development of our people,then we’re a success as a leadership team. And, even more importantly, ourcustomers are going to be getting extraordinary service.

Alafat: What are the long-term goals for this team?

Kilpatrick: We have a goal to transition this company over the next eight to12 years from the founders to this internal management team.

Alafat: What progress has been made so far?

Kilpatrick: Identifying our successors is the first step. We’ve done that and communicated it. The next step, which we are not nearly as far alongwith, is identifying their successors. That’s important so we begin to free uptheir time to work less “in the company” and more “on the company.” We

We talk about success as having happy employees whose family members will tellus that they work for agreat company.


already involve them in strategic planning and are working them into ourbusiness relationships with our surety, insurance, banking and other professional relationships.

Alafat: What are your plans to continue developing your current and futureleaders on the team and in the organization?

Kilpatrick: We have a group of young leaders that meets on a regular basisand tackles a list of initiatives that it brainstormed and the management committee has endorsed. The younger members of the management committeeare coaching this group.

We also use the FMI Leadership Institute as a resource to send one or twofuture leaders to each year. The alums of the Institute will meet occasionallyto revisit their takeaways and sharestories of their personal leadershipjourneys.

Alafat: What final advice can yougive our readers as they think aboutbuilding a strong leadership team?

Kilpatrick: This leadership stuff isthe hardest but most satisfyingwork you will do.

CONCLUSIONThe success of Fortis Constructionis the result of a team that hasestablished a solid foundation oftrust among the leaders. Having worked alongside each other prior to formingthe company, they have confidence in each other’s abilities, work ethic andcore values. During the years, they have carefully added team members who are aligned with their core ideology and core values. As they grow, more resources and energy are invested in making sure that everyone isaligned with the core ideology and core values. Like most companies thathave experienced success and rapid growth, they are stepping up to meetthe challenges of growing their leadership pipeline, without sacrificing thosethings that have made them successful. �

Tom Alafat is a principal with FMI Corporation. He can be reached at 303.398.7209 or via email at

[email protected].

They have carefullyadded team memberswho are aligned withtheir core ideology andcore values.

It is 7:00 a.m. A project manager sits at her desk contemplating

the status of two of her larger construction projects. One

of the projects is ahead of schedule and under budget.

The subcontractors are engaged partners, the client is a raving fan,

and her team is working seamlessly day in and day out, achieving

great things under challenging circumstances.

The other project has become the bane of her existence. The project is fourweeks behind schedule, and the latest cost to complete indicates she is ,

over budget. The client is constantly emailing and calling her and riding the fieldteam. Her team is turning on her and each other instead of focusing on theclients’ needs and developing and implementing solutions. The subcontractors are unresponsive and question everything they are told.

This is not the first time this project manager has struggled to keep her projects on track. Project management is a science and an art. Even the bestproject managers, who carefully plan, organize and control their projects, canfind themselves leading a poorly performing team. So why does this happen, andwhat can be done to get a derailed team back on track or keep a team from evergetting off track? In this article, we will explore why teams are important, thechallenges with managing teams and the significance of understanding individuals.

By Matt Marshall and Shirley Ramos

Leverage Individuals to Maximize TeamPerformanceAs you assemble your teams forprojects and internal company initiatives, take the time to think of the unique traits and skills of each individual team member.

26 � leverage individuals to maximize team performance

We will also explore some tools and approaches to help leverage individuals tomaximize team success.

DESIGN AND CONSTRUCTION ARE A TEAM SPORTMore than ever, designing and constructing st century infrastructure and

buildings are a team sport. With multiple disciplines involved in the planning, permitting, design, construction, start-up, commissioning and servicing of infrastructure and buildings, it takes hundreds, if not thousands, of people working together to turn a concept into a reality.

More and more projects involve forming joint ventures among two or morefirms. The strength and functionality of the relationships between the joint venturepartners and their combined team of professionals is paramount in achieving project success. Integrated Project Delivery (IPD) is another delivery method forcompleting design and construction projects, involving multiple stakeholdersincluding the owner. Realizing the benefits of IPD is hugely dependent on theability to maintain a high-performing team throughout the project life cycle.

No matter the size of the project or the delivery method, executives and managers need to be flexible and able to assemble and lead teams of people withdiverse skills, backgrounds, values, work styles, etc. Often teams comprising“People Like Us” (PLUs), meaning a homogenous group with little to no variation,frequently struggle to understand a problem broadly and develop creative solutions.

Homogenous groups tend to have less conflict and fewer differences ofopinion, which sometimes allowsthem to come to a decision and complete tasks faster. However, conflict and differences of opinion can be good when you are trying to be innovative and creative in solvingproblems. The management “magic” is in getting the most out of everyoneon your team.

Bruce Tuckman (Tuckman, )introduced his “Forming, Storming,Norming, Performing” model ofgroup development (see Exhibit ). In the forming phase, the team formsand establishes roles, responsibilities

and processes. In the second phase, storming, the team is challenged to determine how decisions are made, establish the priorities of the group and solidify intrateam relationships. In phase three, norming, the team has clear rolesand responsibilities, is committed to accomplishing the goals set and starts towork well together. Finally, in the performing phase, the team is performing wellwith little to no oversight.

It all sounds so easy; however, we know from experience, getting your team,no matter how small or large, from ‘forming’ to ‘performing’ at a high level takes a lot of finesse and skill.

Conflict and differences of opinioncan be good when you are trying to beinnovative and creativein solving problems.


CHALLENGES WITH TEAMSDuring the past years, FMI Corporation has worked with the leadership

and management of thousands of engineering and construction companies to helpthem work effectively as teams. In addition, we have worked with project teams onpartnering engagements for major infrastructure and building projects throughoutthe United States. Through our experience to build effective teams, we haveobserved the following recurring challenges.

No clear leader. Especially in the forming stage, it is important for teams tohave a clear leader. Without leadership early to set the foundation for success,teams struggle.

No clear mission or goals. Even with an effective leader, a team needs tounderstand its mission and goals. With knowledge of what the team is setting outto achieve come great power and results.

No clear structure or roles. Every member of the team needs to understandhis or her specific role and responsibilities to complete the goals and achieve themission of the project. In fact, team members should understand the overall teamstructure and everyone’s role on the project so that they can understand how theyneed to interrelate throughout the project life cycle.

No work plan, schedule or budget. Just as the playbook is important to a football team, a work plan, schedule and budget are essential to project teams.Without a work plan, schedule and budget, how do our team members identifytasks to complete and keep track and keep score of how they and the team areproceeding?

Poor communication. Actually, poor communication is the root of all evil.Time and time again, this is the biggest fatal flaw with failing teams. What? Why?When? How? and To Whom? are important considerations in communicating.Good team leaders communicate the right things at the right time in the rightway to the right people to keep team morale high and the team on track.

Exhibit 1

Tuckman’s “Forming, Storming, Norming, Performing” Model

• High degree of guidance needed from manager

• Individual roles are unclear• Process usually not

well-established

• Understanding how team decisions

are made• Purpose is clear, but team

relationships are blurry

• Team is committed to performing well• Focuses on being strategic• Team runs well with little oversight

• Relationships are well-understood in the team

• Commitment to team goals• Begins to work to optimize team

process

1. Forming

2. Storming

4. Performing

3. Norming


No contact with the client or stakeholders. Without regular contact with theclient and other project stakeholders, it is possible to lose focus on their needs andexpectations. Always consider the clients as an integral part of your team and keepthem in the loop.

Blind to intergenerational dynamics. Many companies today have three, sometimes four, generations of employees on the job. Baby boomers do not think,work or communicate the same way as Millennials. In assembling and leadingteams, intergenerational dynamics must be considered and respected in order tomaintain communication and harmony among the team.

Poor conflict management/resolution. Conflict happens on every job andwithin every company. How people deal with conflict and resolve the issues iswhat matters. Unrecognized and unresolved conflict can be a cancer to a team.

At the root of all of the challenges listed above are people, each with his or her unique characteristics, attitudes, behaviors, skills, etc. Effective teams embracethe uniqueness of each person and create a force-multiplier by leveraging the distinctive skills and characteristics of individuals to maximize team performance.

THERE IS NO ‘I’ IN TEAM, BUT THERE IS AN ‘I’ IN INDIVIDUALWe have all heard “there is no ‘I’ in team” from coaches or team leaders at

some point in our lives. This saying rings true. There is no place for selfishnessand overpowering egos on a successful team. Team leaders and team membersneed to work together toward a common goal to achieve results. Understanding the

individuals who comprise a team andworking to put people in positionswhere they can grow and succeed areparamount in creating a team dynamicthat is productive, enjoyable andmaintainable.

The following are some of theindividual factors to which managersmust be sensitive as they assemble and lead teams.

Worldview. Worldview is the fundamental way in which we viewthe world and create order in our lives.Each individual’s worldview informs

our values and attitudes, which in turn influence our behaviors and skills. Ourworldview is at the core of who we are and how we interrelate as leaders andmembers of teams.

Technical and job skills. Each of us brings our own set of technical and job skillsto our organizations and to teams. Typically, these areas are better-known and recog-nized in our companies; however, it starts with self-awareness. Are we honest with ourselves about the areas in which we excel and those with which we struggle?

Natural abilities. Extensive research has concluded that each human being isborn with a range of unique abilities. These natural abilities form the foundationfor the skills we will develop in life and bring to the workplace. Understandingwhat we are naturally good at and what areas may present challenges for us is an

There is no place for selfishness and overpowering egos on a successful team.


important part of self-awareness in our lives and careers.

Emotional Intelligence (EI).Generally, emotional intelligence is a person’s ability to identify, assess and control the emotions of oneself, of others and of groups. DanielGoleman’s EI model comprises five areas of skills: self-awareness, self-regulation, social skill, empathyand motivation.1 People with mid- to high-EI have been shown to be more adept at leading teams, embracing the uniqueness of team members andknowing what to do to make teams of diverse people work effectively together.

Personality types.There has been much research, and there are many differentassessment tools (discussed later in this article) for evaluating and categorizingpeople’s personalities. Most of them look at combinations of how an individualinteracts with others, makes decisions, reacts under stress, prefers to learn, etc. It is useful to understand the personality types of the people with whom you work.Armed with an understanding of the personality types of your team members, youcan tailor the way you communicate with and present information to them toensure they understand.

With a grasp of the innate skills a person brings to the team and what makeseach individual tick, team leaders and participants have a higher likelihood of success achieving their shared goals. The important thing is to use these insights to improve communication, increase clarity and understanding of roles andresponsibilities, and maximize the effectiveness of the team working towardaccomplishing the task(s) at hand.

ASSESSMENT TOOLS — UNDERSTAND INDIVIDUALS TO FOSTER HIGH-PERFORMING TEAMS

Most of us who have applied for positions in new companies or even madelateral or advanced movements in our current organizations have been asked totake some type of personality test. Companies have been using screening surveysfor a number of years to narrow the pool of applicants to a select few who fit theposition applied for or even the culture of the company. Many have heard ofassessments such as DiSC and the Myers-Briggs Type Indicator (MBTI), but thefield of personality and skill profiling has grown to hundreds of tools that are used in small, medium and large organizations across the world.

The idea of using the information in these assessments to manage and lead,and even to create teams, has been less commonplace. The traditional and newerassessment vendors are now seeing the opportunity to capitalize on the informaluse of personality profiles in managing teams by creating offerings specifically for team management. The DiSC profile offers the Team Dimensions Profile,which identifies how team members fit into the “Five Roles of a Team: Creators,Advancers, Refiners, Executors and Flexors.” The MBTI offers a workshop formatfor leading teams as well as frameworks for coaching and its own flavor of reports


to support team management and development. Newer and perhaps lesser-knowntools, such as Personalysis and the Hogan Assessment, have their own deliverablesfor getting the most out of your team by understanding how the individuals in ateam interact with and react to the other personalities in the team.

FMI Corporation has used many of these tools over the years, and recentlybegan using an assessment called the ProScan survey and the associated TeamScanreports to support training, executive coaching and consulting engagements. Itmakes sense that greater understanding of the participants in a class or involved ina consulting engagement allows us to uncover and meet more unique needs.

Individual ProScan and comprehensive TeamScan reports, coupled with industry understanding,enable personalized support for client-specific initiatives, such as succession planning, organizationaldevelopment or employee retention.

ProScan is a nonthreatening,quick, easy and reliable survey toolthat measures combinations of specifictraits, ultimately providing a snapshotof what makes a person tick. The toolmeasures the Basic/Natural Self (who a person is with no pressures orstresses), the Priority Environments(the environments that may be causingpressure and stress) and the OutwardSelf (who a person is portraying him or herself as to others). Working from thesestrengths, as identified through the survey, the results identify motivators andshow how environmental factors affect stress, energy and satisfaction levels.

The core metrics of the survey tool measure four cornerstone behavioral traits:dominance, extroversion, pace and conformity. It also measures the individual’sdecision-making style, levels of energy and stress measurements. The benefits ofthe ProScan data are two-fold: enabling an individual to better understand oneselfas well as providing an understanding of the people around him or her and howthey are wired, their current levels of energy and stress, and what things will (orwill not) motivate them. Team members not only see how remarkably the resultsalign with their perceptions of themselves, but also begin to understand the effectthose results may have on how they interact with their bosses, their peers and those who report directly to them.

Based on the information taken from ProScan surveys, TeamScan allows amanager to quickly and effectively understand the people on his or her team orwork group and manage them based on the needs of the organization and thecapabilities of the individuals. A battery of TeamScan reports can support thesupervisor of a team as well as the members of teams themselves to understandeach other better, leading to improved ability to communicate, cooperate and collaborate. TeamScan measures and defines the team’s culture, while strengtheninginterpersonal understanding and appreciation. In the context of managing a team


for success, the TeamScan offers a multitude of suggestions and discussion topicsthat specifically address the participants of that team.

CONCLUSION — MAXIMIZING TEAM PERFORMANCEAround : a.m., our project manager heads to her boss’s office to discuss

why she thinks her underperforming team is struggling and to present her actionplan for “righting the ship.” In discussing the situation with her boss, she realizesthe root of the problem. The project manager inherited this project when anotherproject manager was terminated. She never took the time like she had on herother highly successful projects to get to know the members of her team and allow them to know her. She had not revisited the overall mission and goals of the project with the team or effectively communicated how the team would worktogether (with its subcontractors and the client) to meet the quality, schedule andbudget requirements of the project. She had not evaluated whether the roles and responsibilities of the team members aligned with each of their skills sets. Shehad launched into managing — planning, organizing and controlling — insteadof leading, setting direction, understanding and aligning resources, and motivatingand inspiring her team.

The action plan she and her boss developed included:

• Reviewing the individual assessments on file for each key member of herteam and evaluating them as a team.

• Meeting individually with all key members to get to know them better,discuss their roles and responsibilities on the project and get their input on how to get things back on track.

• Scheduling a team reset meeting to communicate clearly the recovery planfor the project, including revised schedule, labor plan and budget.

• Holding regular team-building events during the remaining months of the project duration.

• Communicating more frequently and openly with the client and subcontractors.

• Conducting weekly visits to the field, including attending the daily huddle, to ensure the project is on track and to illustrate to the team herlevel of engagement.

Teamwork is how we deliver design and construction projects to our clients.As you assemble your teams for projects and internal company initiatives, take thetime to think of the unique traits and skills of each individual team member andhow to leverage those unique elements to ensure that the whole is greater than the sum of its parts. �

Matt Marshall is a business developer director at FMI Corporation. He can be reached at 303.398.7289 or

via email at [email protected]. Shirley Ramos is a training consultant at FMI. She can be reached at

303.398.7213 or via email at [email protected].

1 Goleman, D. (.) What Makes A Leader? Harvard Business Review.

W hy should a customer pick you for the project?

That is always the question. Customers use short

lists to generate a limited number of qualified

contractors that are chasing the same project. Each contractor

competing has expertise, a résumé, satisfied past clients, a solid

team, etc. Creating or identifying a competitive advantage is

the starting point for many companies when thinking about teaming

as a project win strategy.

Of course, not all contractors are perceived by the customer to be equal, even if they are on the short list. Some contractors stand out more than theircompetitors do. Some have better reputations, stronger teams, etc. The customermay have worked with one or two of the contractors in the past, giving it firsthand knowledge of the contractor’s qualifications, etc.

Culling the potential competitors to a qualified short list by definition andthe perspective of many customers mean that all should be able to deliver a quality project, on time, within budget and with some level of customer service.So the question becomes, “Why should the customer pick you over the othergood contractors pursuing the work?”

By Cynthia Paul

Teaming to Win

Take a sharp look at what you needfrom a teaming partner before you start approaching potential companies. First and foremost, youare looking for the right partner.

34 � teaming to win

If you do not have a singular differentiating (or competitive) advantage, couldyou create that advantage by teaming with another firm?

WHY TEAM?While researching this article, FMI reached out to a number of our clients

to get a better understanding of how they think about teaming and what it takes to pick good partners. One conversation that particularly stood out was with Jeff McCord, business development director of Western Summit Constructors, Inc.Western Summit, a Kiewit company, is a construction leader in the water andwastewater treatment market.

The water and wastewater plant business is an interesting example of whatcontractors can accomplish through teaming. On any particular project, contractorsand engineers in the plant business may approach the job solo, team with a competitor contractor or link with an engineer. One day the competitors areworking jointly together on a new wastewater treatment plant; the next day theyare competing head to head on a project both want to pursue separately. How

do they decide to team or go it alone? It is part strategy, part customer focusand part necessity.

Creating a strategic advantage isthe key for winning projects of anytype. In an ideal situation, teamingprovides companies with key missingelements needed to win. Customersare looking for the team that bestmeets their needs. The team can createunique competitive advantages oncepaired together. The advantage mightcome from a distinctive technical solution, design approach, depth ofstaff, customer relationships, availabletechnology solution, etc. The key is having deep insights into the customers’ needs and the competitivelandscape you are facing.

“Project debriefs have taught usthat customers are looking for teams

where companies and people have a track record of working together successfully.If you can find people who have aligned values and a similar approach to managingprojects, build strong relationships with them. They need to be your go-to teamingpartners,” according to Jeff McCord.

Teams can be one or more partners coming together to chase and win a project.The team might include a couple of contractors or be composed of contractors,engineers and architects. It all depends on the project and what the customer wantsto accomplish. To be successful with teaming, one or more people in the jointventure must be business development savvy and find opportunities in the process,discover customer hot buttons and put together a strategy to win (see Exhibit ).

Creating a strategicadvantage is the key forwinning projects of anytype. In an ideal situation,teaming provides companies with keymissing elements needed to win.


Common reasons to team include:

Resource Availability: This is when additional resources or capacityis needed to pursue the project. Theteam can provide needed estimating,preconstruction or operational capability to purse and build the project. Finding top talent in the openmarket remains difficult, but having a partner on the project can providethe talent needed to be successful.

Unique Capability: Projects requiring unique design experiencecan require reaching outside your own

organization. The team might include an engineer and contractor linking togetherto enhance design-build capability. Contractors that do not have the specificdesign capability needed to pursue the project solo can reach out to engineers tobring that capability to the team. Engineers that do not have a construction armcan reach out to a contractor to team for a client interested in fully integratingdesign and construction functions.

Project Size: Mega projects bring financial challenges that can be difficult for one company to handle independently. Sometimes, pushed by bonding orbanking to do so, contractors bring a large competitor on board to help shoulderthe risk of the project, mitigate the talent drain and increase the available financialwherewithal.

Balanced Work Portfolio: Clients may be concerned about the total number of projects that one contractor is building for them at one time. For example, ifthe client has four major projects in its capital program, it may want to limit thenumber that one contractor wins. Teaming can be a good strategy for the customerto feel more comfortable with distribution of projects to a single contractor.

Areas of Expertise: Health care,higher education and power are a fewexamples of markets where projectowners are looking for specific projectexpertise. Teaming can increase theoverall résumé of relevant projects as well as the number of people whohave the necessary certifications for the project.

Risk Management: Individual project bonding limits can requirelooking for a teaming partner. If you have maximized the individual project-bonding limit, yet have a goodchance of winning a significant project,a teaming partner can sometimes help

Exhibit 1

Teaming

Teaming

BalancedProject

Portfolio

Areas of Expertise

Unique Capability

ClientRelationships

EmergingMarket

ResourceAvailability

RiskManagement

Project Size

Finding top talent in the open market remainsdifficult, but having apartner on the projectcan provide the talentneeded to be successful.


alleviate the concerns a bonding company has with its client undertaking yetanother project. Make sure you pick a partner with strong project performanceand start talking to your bonding company early in the pursuit process.

Client Relationships: Strong client relationships are the key to winning manyprojects. If a customer has an unusually large project that does not fit the workprogram of its go-to contractor, a teaming arrangement can give the customer the benefit of both worlds — it gets the contractor it knows and enjoys workingwith, blended with a bigger contractor who knows how to handle large, complicated work.

Emerging Markets: An emerging market might be a market segment new to your company, or it might be new to the whole industry. Examples mightinclude photovoltaic projects, peaker power plants or specific new technology

inside a project. The emerging marketis in need of contractors that have that specific experience. If you havenever built one of those projects,reaching out to a partner can be agreat strategy to break in and winwork in the new market.

Teaming is one part of the overallproject win strategy to displace topcompetitors. Teaming becomes astrategic decision on how to best servethe customer and secure the project.

PICKING A PARTNER Finding a good partner is an

important factor in a successful teamrelationship. So is being a good teaming partner. Teaming relationshipscan range from a simple subcontractoragreement to a formal joint venture.The type of agreement stems in partfrom what the teaming relationship isdesigned to achieve.

Chemistry is one of the leadingcriteria that companies talk about in successful teaming relationships. The abilityfor your staff and theirs to come together, share best practices and form a cohesiveteam is essential. That ability is not shared by all organizations. Typically, a stronginternal culture can form invisible barriers to highly integrated teaming relationships.When culture is strong, there is a great deal of pride of authorship of ideas and aclear notion of the “best way” to do things.

Teaming partners have to be able to put aside their internal best practices to embrace practices that are in the best interest of the team. Not all companiesare good candidates for a team, nor are all of your people. Some will simply playbetter with outside team members than others will.

Chemistry needed to be successful as a team is unique to each project.

Chemistry is one of the leading criteria thatcompanies talk about in successful teaming relationships. The ability for your staff andtheirs to come together, share best practices and form a cohesiveteam is essential.


Being able to identify and build chemistry is a core competence ofcompanies that have long records ofaccomplishment in successfullyteamed projects. Shared values andexperience are part of what is neededto create successful chemistry and needto be part of the selection process forpotential teaming partners.

Chemistry is also noticeable to the customer. Team members withgood chemistry come across better inproject presentations. When you come across confident and seamless,hit rates improve. A good team member increases the odds of winninga specific project.

A strong track record of successful projects together is what customers arelooking for from companies that are teamed together. When two companies havegood chemistry, they tend to reach out to each other for future projects and naturally build that track record of projects between them. Conversely, first-timeteams are often less persuasive to the experienced buyer.

APPETITE FOR RISK Individual appetite for risk is also a factor in determining who will be a

good teaming partner and who will not be. For some contractors, minimizingtheir risk is so essential that it is difficult to embrace the additional risk that ateaming relationship brings. For those companies, a subcontractor relationshipcan minimize the amount of “skin inthe game” and yet allows them to participate in the project. It can alsobe a good first step to test the waterswith a potential teaming partner.

The desire to manage risk is oneof the reasons why companies mightpursue a formal joint venture. A jointventure relationship makes sure bothcompanies take an equitable amountof risk. The actual structure of thejoint venture may change from projectto project. Determining the potentialpartner’s risk appetite early in theselection process can reduce the numberof steps needed to both find a viablepartner and negotiate the structure ofthe relationship.

Project Win Strategy

In its simplest form, the win strategy isthe comprehensive reason the customershould pick you and your team over the other top competitors pursuing theproject. The win strategy includes:

• Highlighting the unique value yourteam brings to the project.

• Strengthening any perceived weaknesses or inconsistencies.

• Ghosting competitors on their weaknesses or inconsistencies.

• Providing points of innovation thatother competitors cannot or will not.


PICK PARTNERS EARLY Picking a project partner starts early in the business development process.

Time is needed in order to engage with the customer and build relationships. One reason to select a partner is that it has a good sense of the market and knowsof projects well in advance of them being released to the street. The early noticeallows the teaming partners to get prepositioned with customers, architects, engineers, vendors, influencers, etc. Selecting early also ensures you get the bestteam available, denying that best team partner to your competition.

Teaming discussions might start a year or two in advance of the projectbecoming a reality. Bringing in a partner late in the game is an expensive strategythat often means losing the project. Late entry does not allow time for buildingthe right relationships, getting prepositioned or time to craft a thorough win strategy. Teaming needs to be a proactive strategy, not a reactive one when youfind out that your company is not well-positioned to win. Be clear about the customer’s view of your strengths and weaknesses, as it will make selecting a partner that much easier.

Teaming might not be the first choice for most companies. Many will want to keep the project internally if they have a reasonable chance to win it and be successful building it. However, not having teaming as one of the strategic optionsin your project-win strategy can negatively affect your overall hit rate and yourability to meet the customer’s needs.

How Do You Rate as a Partner?

Rate your firm on each of the following characteristics on a scale of 1 to 5, where 5 = Very strong,consistent performance, 1 = Poor or inconsistent performance.

1. Culture and engagement• Innovation is a cornerstone of company culture. • A culture of openness and teamwork extends to team members outside the company. • Risk management philosophy allows for new ideas and approaches.

2. Staff availability and depth• Top talent is available and interested in the project.• There is a depth of experienced staff members — with the customer and project type.• Team is open to new ideas and embraces creativity.

3. Project controls and communications• Companies have a successful track record for teaming or joint ventures projects.• There are robust project control systems to track project progress from a distance.• Companies have compatible technology platforms.

4. Senior management support• Senior management gives support and commitment for the project at a high organizational level.

• Senior management of both firms is willing to invest personal time in project.

5. Teaming experience• Teaming partners have come back to you to engage on future work.• Customers rate the team as strong and responsive. • Teaming partners are willing to have “skin in the game” from a risk perspective (i.e., morethan a subcontractor relationship).


LESSONS LEARNEDThe following are lessons learned

from a variety of contractors that useteaming as project win strategy.

• Align cultures early and in tangible ways. If your goals aremisaligned from the beginning,it will not get better down theroad while you are building the project. Early challenges area warning sign that the teampartners might not be able todevelop a successful workingrelationship. After all is said and done, how your staffs work together is oneof the most important elements of delivering a successful project.

• See eye to eye and work out any issues as they arise among managementgroups. If you have an engineering partner that needs its staff to remainbillable in the get-work portion of winning the project, that needs to beworked out early or the team will find itself in trouble during the designand construction of the project. Sharing risk, costs, etc., needs to be anequitable agreement from the beginning.

• Start early — the earlier, the better. As soon as you can identify a potentialproject opportunity and the need to team, the better you will be on theproject. Striking early and getting the first selection of the most desired candidates is a huge leg up in winning the project.

• Share project control systems and spend the time upfront to find out whohas the best systems. Commit to using them consistently throughout theproject. Frequently, that means training needs to happen on the project so everyone understands the systems and tools that will be used to managethe project.

• Understand what your limitations are upfront and candidly discuss that inyour conversations with potential partners. Do not overcommit in order tomake the marriage work and then be forced to pull out of the relationshipbefore the project is won.

• Be clear on the resources you are willing to commit to the project. You willneed your A team. It is easy to underestimate the level of talent needed tomake the relationship work and deliver the project. Your teaming partner is looking for your team to be experienced and have a proven track recordof success. Your team needs to be able to deliver a successful project, ensureit is profitable for your company, and be able to work with your team partners. Balancing all of those needs simultaneously makes the process difficult for less experienced staff.

• Be open to new ideas. You need to be comfortable in a teaming environmentwhere your idea is not always the one selected. Be able to see the projectfrom others’ point of view. That means sometimes you have to go withyour partner’s best idea, not yours.

“Project debriefs have taught us thatcustomers are looking for teams wherecompanies and people have a trackrecord of working together successfully.If you can find people who have aligned values and a similar approach to managing projects, build strong relationships with them. They need tobe your go-to teaming partners.”

Jeff McCord Western Summit Constructors, Inc.


• Be collaborative: It’s a look in the mirror. Both teams need to give and takeand work as one. Some cultures are more willing to do that than others are.It comes down to the people, and not everyone is wired for it. It is humannature to be defensive instead of receptive to new ideas. Thatneeds to be taken into accounton how the relationship is set up, in the project kickoff and throughout the designand construction. Many successful partners absolutelycommit to formal partnering on the project, and consistentlyapply it to all of their teamingprojects in order to set up thecollaborative culture that isneeded to be successful.

• Clarify the level of decision-making authority and who hasresponsibility over what areas of the project with a decision-making ladder. Team members come together to determine how decisions will bemade, what the levels of authority are and how issues will be escalated if aroadblock appears.

• Create a project charter to determine how the teaming partners will interact and define success on the project. The charter provides the vehiclefor getting commitment from everyone on the project goals and objectives.

Best practices for teaming abound in the industry. If you are new to theprocess, ask other industry firms for their lessons learned. If you are an old pro atteaming, help share the successes and challenges you have experienced internallyand externally.

A great avenue for learning is sharing lessons learned from teaming on projects internally with other staff members. The characteristics that make you asuccessful teaming partner also help others in your firm create stronger bonds withcustomers and other companies with which you interface.

CONCLUSION Teaming is an effective get-work strategy, but never a guarantee of success.

Focus on the client. Make sure you are adding unique value to the customer withyour project approach. Spend the time needed to set the team up for success.

Be clear why you are engaging in a teaming relationship (e.g., to grow yourbusiness; explore new technologies, geographies, sectors; etc.) Share your reasonswith potential partners and your team internally.

Create success measurements before the project starts in order to ensure thatteaming relationships are productive, collaborative and effective. Invest the extratime needed for the team to engage before the project kicks off to set up theworking relationship for success.

Teaming is an effectiveget-work strategy, but never a guarantee of success. Focus on the client.


Understand what is required to compete and truly be successful as a teamfrom the perspective of the customer and your firm internally. Take a sharp look at what you need from a teaming partner before you start approaching potentialcompanies. First and foremost, you are looking for the right partner. That is theessential win-win strategy for it to be a success. There are right and wrong reasonsfor looking to team.

Remember, you are looking for a long-term teaming partner in order to buildhistory between the two companies. A proven track record of working together is a key customer hot button. Make teaming an overall plan, not just one project,and success will come. �

Special thanks to Jeff McCord, business development director of Western SummitConstructors Inc., for his help with this article.

Cynthia Paul is a managing director with FMI Corporation. She can be reached at 303.398.7291 or via email


B uildings account for nearly 50% of the nation’s energy

use, 40% globally. Significant economic value can be

created by making buildings more efficient. In the

process of becoming more efficient, buildings often become better-

functioning, more comfortable and safer.

One high-value energy efficiency measure is to ensure building systems(HVAC, controls, chillers/boilers, lighting, distributed generation, power qualityand reliability equipment, etc.) are interacting and functioning as designed and inan optimal fashion. Building systems can become out of tune, working againsteach other and functioning suboptimally. Many buildings were never in tune tobegin with. Commissioning services tune up building systems, saving money,increasing occupant comfort and safety, and optimizing building performance.

Commissioning services are often categorized into three areas (see Exhibit ):

. Commissioning (Cx) refers to the initial commission of new constructionor major retrofits.

. Retrocommissioning (RCx) refers to applying commissioning techniquesto an existing facility that has become inefficient.

. Monitor-based commissioning (MBCx) extends the idea of RCx by usingtechnology to continuously monitor building systems and keep them functioning optimally. MBCx is sometimes referred to by alternativenames, such as continuous commissioning or persistence commissioning.

By Tim Huckaby and Russell Clarke

Increase Value WithBuilding and SystemsCommissioningThe ability to integrate technology and scale effectivelywill provide great value to building owners and providers of technical building services.

44 � increase value with building and systems commissioning

Along with the advancement of technological applications, all types of commissioning continue to evolve and grow, providing an increasingly valuableservice to building owners.

Discussions confirm that the industry is changing quickly with the adoptionand utilization of new technologies. This integration is creating new, comprehensiveservice offerings and delivery systems. The evolution of commissioning services willproduce increased value to commissioning businesses and building owners alike.

INDUSTRY GROWTHThe demand for Cx services has experienced strong growth over recent years.

Solid demand for new building Cx persisted through the most recent constructiondownturn, as its value was increasingly realized by project owners and managers.As the construction market picks up, so too will the demand for Cx services.

RCx, on the other hand, relies on an established and aging building stock in place. An average RCx project saves between % and % of energy costs, andoften has a payback period of around one year. This investment provides cost savings for three to five years (before losing its effectiveness) and has an average

Exhibit 1

Commissioning Services Categories

Commissioning (Cx)

Retrocommissioning (RCx)

Monitor-Based Commissioning (MBCx, Continuous Commissioning)


cash-on-cash return on investment of more than %. At an average cost of lessthan per square foot, the investment in RCx is typically considered low-risk and high-return for both the customer and the service provider. In its aggressivemodeling scenario, Pike Research predicts that the market for RCx services in theU.S. could be worth more than . billion by (see Exhibit ).

The opportunity for the industry to grow domestically is large. The stock ofexisting buildings still untouched by commissioning services provides domesticgrowth opportunities for many years to come. In , more than billion squarefeet of commercial floor space in the U.S. existed, and this is projectedto grow to more than billionsquare feet by .

The opportunity for RCx to addvalue to building owners renews itselfover time, as systems age and movetoward imbalances and technologiesimprove. This dynamic naturally leadsto MBCx — continuously monitoringand balancing buildings to operate in an optimal fashion. Accordingly,MBCx is thought by many industryparticipants to become the highestgrowth sector (based on revenue percentage) of commissioning services.

The market of commissioningservice providers is currently fragmented. Cx and RCx services are provided as part of comprehensive offerings of large firms or as individual services by smaller companies. Increasingly, commissioning services are part of the solution set offered by larger organizations,such as multinational mechanical controls providers and engineering firms. “Theyare trying to be the one-stop shop not just for the systems, but for the services,”states Kelly Decker, president of Primary Integration, LLC, a leading commissioningand sustainable operations services provider, in reference to these larger entities.The need for talented and experienced commissioning professionals and a recordof project success has led many international conglomerates to seek acquisitionsinvolving established commissioning businesses.

International opportunities are abundant as well. Decker believes the U.S. is aclear leader in the commissioning industry. The growth of commissioning servicesas part of larger offerings by multinational companies is a way to bring the leadingknowledge and processes currently applied in the United States to other areas ofthe globe. As Decker put it, “In the rest of the world, the opportunities are huge.They are [several] years behind us in their processes, yet they are all attempting touse the latest and greatest technologies.”

INDUSTRY DRIVERSDemand for Cx, RCx and MBCx services can be attributed to a number of

drivers as shown in Exhibit .

Exhibit 2

Source: Pike Research

Estimated Market in 2014 for RCx Services

2014 Aggressive Estimate

$1.8 Billion

2014 Conservative Estimate

$760 Million

2010$160 Million

46 � increase value with building and systems commissioning

In addition to cost savings, reliability is an increasingly important driver forbuilding commissioning. Properly tuned systems have a lower chance of failing.Hospitals, data centers, certain military installations and similar mission-criticalfacilities cannot afford systems failure or downtime. Many commissioning firmsfocus heavily on the energy-savings equation, but Decker has found commissioningservices are driven by both reliability and energy savings. While mission-criticalfacilities need to function flawlessly, they also seek to improve their power usageeffectiveness (PUE).

THE EVOLUTION TOWARD MBCX Service providers are deploying software-based monitoring systems, allowing

for a real-time view into building systems and operations and the application ofanalytical tools. Such monitoring and analysis allow imbalances and suboptimalsystems performance to be identified and addressed on an as-needed basis. Instead of retrocommissioning a building every five years or so, the building isunder continuous review, increasing and sustaining the effectiveness of the commissioning services. On its website, SCIenergy, an international energy management company headquartered in the U.S., describes MBCx this way:“MBCx systems will give a building operator the ability to preserve the resultsachieved through retrocommissioning so that this year’s low-hanging fruitbecomes a self-sustaining orchard of savings.”

The wider adoption of monitoring and analysis technology has the ability tochange the business model significantly from routine and scheduled inspections to an ongoing MBCx service. Numerous software-based solutions are being developed and marketed to help lower building energy use and maintain reliabilityand performance. This push towards automated systems is still in its early development, but it is generally expected to have a significant role in optimizingbuilding functionality over the longer term.

In addition to large controls companies, providers such as SCIenergy,Northwrite and many others are among the ranks of the companies offering software solutions to help enable MBCx-related services. The emergence of these

Exhibit 3

Commissioning Cost Savings Drivers

Cost Savings: Reducing Costs Such as Utility and Maintenance Bills

Energy Reduction: Reducing reliance on energy and reducing consumption.

Reliability: Mission-critical facilities cannot be allowed to fail (e.g., Data Center Construction market is expected to increase from $50 billion in 2011 to more than $78 billion in 2020.)

Fixing Problem Buildings: Finding and permanently fixing known and unknown problems in buildings.

Utility Incentives: Leveraging available incentives for maximum savings.

LEED: Complying with LEED standards for new and existing buildings (LEED registered floor area increased 45% between 2010 and 2011.)

Legislative Mandates: Complying with the increase in laws, codes and mandates passed by government entities (e.g., San Francisco and New York City have mandates requiring Cx on buildings that fit certain qualifications.)


systems allows for more choices for the service providers who leverage the use ofsoftware with their building system expertise.

TECHNOLOGY AND PEOPLE MATTER While digital solutions have the ability to measure and monitor the building

through sensors and data streams, they cannot always pinpoint, analyze andaddress problems that an on-the-ground engineer can. “There is a lot of pushfrom the software industry to make everything into a software problem, andbuildings are hardware and you need people to look at them. What we need tofind are ways to make use of software and automated systems to assist our efforts,but there are a lot of things that need to be done by someone on-site who knowswhat to look for,” states Jim Kelsey, president of kW Engineering, an independentprovider of energy engineering services specializing in commercial, institutionaland industrial mechanical systems. This is especially true due to the wide range of building systems, old and new, that exist in today’s building stock. There is noone-size-fits-all option. Liz Fischer, executive director of the Building CommissioningAssociation, confirms that much of the existing building stock does not have themodern (digital) control infrastructure required for effective MBCx. Accordingly,there is a balance of software solutions and on-site engineering talent required toaddress market opportunities.

Engineers need the right experience and skill set to be successful in providingcommissioning services. Jim Kelsey states, “Web-based project logs and iPad appsare helping make the commissioning process more streamlined, and as the industryintegrates these technologies, the most valuable applications emerge and gainbroad acceptance. This tech adoption can have an immediate fiscal impact.”

This posturing around new technologies sets the stage for the future of theindustry. As Mark Miller, principal of Strategic Building Solutions, states, “Thereare some challenges along the way for the adoption of technology, but ultimately,I think it will be a benefit. We are still early in technology adoption, and I don’tthink we have achieved the full benefits yet.”

The ability to integrate technology with talented engineering resources and scaleeffectively will provide great value to building owners and providers of technicalbuilding services. Successful energy service companies (ESCOs), commissioningservice providers and other building service providers are taking note of the newtechnologies available and utilizing those that allow them to best improve theirservice or add additional offerings. �

Tim Huckaby is a managing director with FMI Capital Advisors, Inc. He can be reached at 303.398.7265 or

via email at [email protected]. Russell Clarke is a research analyst with FMI Capital Advisors, Inc.

He can be reached at 303.398.7249 or via email at [email protected].

1 Pike Research: Energy Efficiency Retrofits for Commercial and Public Buildings, 2 http://www.datacenterknowledge.com/archives////how-big-is-the-data-center-construction-market/3 http://www.greenbiz.com/sites/all/themes/greenbiz/doc/GBMIR_.pdf

P artnering on construction projects promotes improved

performance through collaborative business relationships.

Openness and trust are keys in making the relationships

positive and profitable among all parties, which in turn diminishes the

confrontational nature often seen in construction projects.

FMI has been fortunate to work with thousands of projects across a number ofindustry sectors and has witnessed firsthand the benefits of partnering principles,which include accountability, consistency and total team involvement. Here aretwo case studies that illustrate what successful partnered projects look like.

CASE STUDY 1: PARTNERING ASSISTS SUCCESSFUL COMPLETION OF LOUDOUN COUNTY’S NEW $180 MILLION WATER RECLAMATION PLANT

The timely completion of the million Broad Run Water ReclamationFacility (BRWRF) is an example of how a fully committed, ongoing partneringeffort can assist in consistent teamwork across multiple contracts in the delivery of an exceptional construction program. It is also an excellent demonstration of how overall performance objectives can be achieved while still preserving the contractual and proprietary integrity of the contractors involved. According to Rick Thoesen, deputy general manager for Loudoun Water, “The collaborativeprocess employing goal-setting, problem-solving and structured partnering cancreate win-win opportunities for all concerned.”

By Bill Spragins

A Tale of Two Partnerships

A structured approach to collaboration, based on consistency and accountability,can contribute to the success of a multiple-contract project.

50 � a tale of two partnerships

THE PROJECTThe Loudoun County Sanitation Authority (LCSA) was formed in and is

responsible for providing comprehensive water and sewer services to approximately, customer accounts comprised of residents and businesses. The newBRWRF (a regional wastewater treatment plant) is intended to supplement theexisting , miles of water and sewer pipelines that predominantly serve theeastern portion of the county. This new greenfield facility provides water reuseopportunities to Loudon County and included the following key components:

• Contract ( million): Site, yard work and liquid treatment facilities• Contract ( million): Secondary treatment/membrane treatment facility• Contract ( million): Digesters and solids treatment facility• Contract ( million): Operations complex• Contract ( million): Influent sewage pumping station

PROJECT SUCCESSESThe project achieved success in a

number of key goal areas, including:

• Safety: The overall programenjoyed a rate of less than .

OSHA Recordable Incidentsper , person-hours,compared to the industrybenchmark of .. The Pizzagalliprojects completed with zerolost-workday incidents in morethan , days and won thecompany’s “Safety Project of the Year” in .

• Schedule: A complex treatmentplant was completed in just less than four years. Construction started inJune , and Loudoun Water met its new discharge goal by dischargingtreated effluent in May .

• Quality: Treated effluent has met all permit parameters since June .The discharge limits are among the most stringent in the world and meetVirginia’s highest water reuse standards.

• Budget: The program budget met high expectations as measured by themagnitude of change orders. The change order experience of less than .%on the BRWRF program was less than % of the industry average.

• Effective Communication and Problem Solving: Heavy emphasis was placedon decision-making at the working levels. Rather than encourage escalationof conflict to higher management, supervisors and superintendents wereencouraged to resolve issues at their level of engagement. Such emphasiscreated pride in the work effort and string ownership in the outcome of the product. According to Rick Thoesen, “Leadership was expected fromeveryone, not just management, and a project culture was established

Loudon County’s Water Reclamation Plant’s Key Project Stakeholders

• LCSA:Owner and Operator• CH2M Hill: Design Engineer andConstruction Services Manager forContracts 1, 2, 3 and 4

• Black & Veatch: Design Engineer and Construction Services Managerfor Contract 5

• Hill International:Owner Consultant• Pizzagalli: General Contractor forContracts 2, 3 and 5

• Fru-Con: General Contractor forContracts 1 and 4


where face-to-face dialogue orphone calls for the purpose ofresolving issues was emphasized.Emails to resolve issues werediscouraged. This resulted inavoidance of ‘claim missiles’ and helped to provide empathyand resolution for all parties.”The direct, open dialogue within the weekly submittal/RFImeeting process was key to getting things resolved, as were the supplementalsubmittal review meetings. Early submission of O&M manual informationwas vital to the success of the start-up program.

ONGOING PARTNERING PROCESS During program planning for the Construction Services Organization, Loudoun

Water decided to pursue an ongoing formal partnering process as opposed to thetypical approach of just a “kickoff” session with “optional” follow-ups as needed.According to Dick Bedard, senior vice president for CHM Hill, “There had beenseveral large water/wastewater projects in the Mid-Atlantic that had not gone well.We knew there was a better way to get projects done for all parties and set out tocreate a model for the entire industry.” The process adopted by the team wasdeveloped based on the principles of collaboration, accountability and consistency.On a program of this scale, collaboration among all primary stakeholders wasaccomplished by developing and using a team charter, establishing values andgoals, and managing expectations. Accountability was achieved by having a seriesof ongoing internal customer satisfaction surveys that required all participants to score the team’s ability to reach expectations and to account for the variousactions needed by each to progress the project. Consistency in approach involvedthe use of the same evaluation process for all contracts from all parties betweenpartnering forums.

Elements of the ongoing processincluded:

Executive-Level Kickoff Session For each general contractor a

smaller group of senior-level personnelfrom the parties initially met to agreeon overall project values and goals, issueescalation process and communicationprotocol as well as determine the pathforward for an ongoing partneringprocess. Says Dick Bedard, “Weemployed FBDM (Fact-Based Decision-Making). Everyone has opinions andemotion, but we demanded a full factbase to be developed, which drove

The process adopted bythe team was developedbased on the principlesof collaboration,accountability and consistency.


good decisions. The notion to utilize formal levels for decision-making was especiallyrelevant; it fostered resolutions at the working levels and avoided micromanagementfrom the top.” The key piece of this was to establish the value that relationships at the senior levels of theorganization were essential to projectsuccess. The relationships at the seniorlevel extended beyond the formal partnering sessions, as executives continued to meet in impromptulunches and on phone conversations during the course of the project.

Project-Level Kickoff SessionIn subsequent sessions for each

general contractor, the team expandedto include all on-site supervisory personnel and project engineers, wherethe team charter and issue escalation process were finalized. Additionally, potentiallykey issues or “rocks in the road” were identified and initial actions defined.

Issue Escalation Process The backbone of the partnering process was the implementation of

five-level, tiered collaborative teams composed of representatives for each businessorganization at each level of the organization (see Exhibit ). As potential disputeswere identified, the intent was to level the playing field and ensure the issues weredealt with first at the project level and then, if no resolution was reached, escalatedequitably upwards as a team to the next level of management. According to Rick Thoesen, “Designing the five levels of decision-making upfront was genius.

Field empowermentresulted in a confidentand efficient projectwithout interferencefrom executive egos.

EngineeringPurchasing

SubmittalGeneral

Document

Change Order Admin.

SubmittalTracking

Schedule

Change Impact

Mechanical (self)

Plumbing and

HVAC (self/sub)

Electrical (sub)

Concrete Digester/Concrete

(sub)Site Work

(sub) SafetyLevel

1Discipline

Teams

2DisciplineCo-Leads

3

4

5

Exhibit 1

Issue Escalation Process

Project LeadersCH2M Hill

Contractors

Sponsor TeamLCSA, CH2M Hill

Contractors

Executive TeamLCSA, CH2M Hill

Contractors


Executive management was allowed to influence the outcome and provide conflictresolution at its level of the organization, but the process was largely controlled by project management; executives did not micromanage or second-guess fielddecisions. Field empowerment resulted in a confident and efficient project withoutinterference from executive egos.”

In fact, for all of the contracts combined, only three issues escalated to theexecutive level (the th Level). Those issues involved:

• Evaluation of blasting operations and the effect of subsurface rock on thepredictability of the outcomes when compared to the geotechnical reportsprovided for construction.

• The effect of the change in building pad elevation and related changes inbackfill material to accommodate deeper levels of bedding.

• Concrete cracking controls, due to the acceleration of work by one of thecontractors, the effect on project efficiency and extra workers needed tostack trades to match the schedule for move-in and start-up.

Quarterly Executive SessionsTo preserve contractual and proprietary information of the contractors, separate

sessions were held on a quarterly basis for each of the two general contractors. At these sessions, project managers for the key organizations for each contract provided a joint project update and then the group would assess team performanceagainst the goals developed in the project charter (see Exhibit ). The assessmentwould be based on a - to -point scale, where “” was considered “meeting expectations,” “” was “exceeding expectations” and anything less than a “” was“less than meeting expectations.” The assessment trend for the project duration

Exhibit 2

Project Charter

Broad Run Project Charter Mission

We are committed to protecting the environment and public health by constructing a world-class Broad Run Water Reclamation Facility in a manner which will set a standard for the industry.

We will create a positive environment and work as a team to achieve the following goals:

Safety• Zero public or job-site accidents• Zero lost time injuries or reportables• Win safety awards

Meet or exceed schedule and stay within budget• Plan a realistic schedule and work it• Good profit for contractors• Good value for the owner• Timely decisions and proactive response to issues• Earn all project incentives

Quality product • Meet or exceed requirements• A source of pride to all• Win multiple awards

Effective communication and coordination at all levels to ensure timely resolution of issues• No unresolved issues• Clear and open communication, including appropriate vehicles• Utilize issue escalation process and minimize issues requiring escalation• Effective working relations with all parties

Community communication and outreach• High satisfaction for the community— the ultimate client• Communication early and often• Minimal interference with existing O&M facility• Quick response to issues• Positive relationship with the media• Enhancement of the reputation of all participants

Meet or exceed all regulatory requirements


is displayed in Exhibit . These ratings provided the format for any team member togive input on positive aspects of the work and the success or failure of relationshipsto date as well as to raise issues of concern or opportunities for improvement.Action items were developed for each key issue. Thirteen of these sessions wereheld for each general contractor during the course of the project.

In a truly collaborative fashion, competitive engineering firms CHM Hilland Black & Veatch, involved on three different contracts withPizzagalli, agreed to meet together atthe quarterly sessions.

Team Evaluation Process (InternalCustomer Satisfaction Survey)

As a supplement to the executive-level sessions, a separate rating tool,called the Team Evaluation, wasadministered and compiled by FMIon a quarterly basis for each of the five contracts. Similar to the goalassessment format, this tool asked project and on-site supervisory personnel a different set of questions. Results and comments generated by the surveys werereviewed at the quarterly executive-level session. A graph of the combined resultsof this evaluation on the major contracts is displayed in Exhibit .

Early Commissioning and Start-Up SessionIn August , approximately one year after the initial partnering sessions

and once all contracts were up and running, the team held an “all projects, allhands” session, attended by all supervisory personnel from all projects. The intentof this session was to generate collective input from the considerable expertise in

5.00

4.75

4.50

4.25

4.00

3.75

3.50

3.25

3.00

11/04

Unit of measure

Exhibit 3

Goal Rating Chart

3/05

5/05

9/05

4/06

6/06 10/06 1/07

4/08

1/06

10/07

7/074/07


the room on everything to be considered to properly commission and start up the plant across the five separate contracts. The foresighted project leaders arrangedthis meeting to occur more than two years before the scheduled completion of the project. The result of this session was the initiation of a Commissioning andStart-up Team, comprised of representatives from all business organizations. Theteam took the initial input from the August session, developed an initialstrategy and then met on a regular basis for the duration of the project.

This comprehensive partnering effort involved a total of sessions and

team evaluation conference calls during three and a half years.There were a number of factors that contributed to the successful completion

of this project. The use of this partnering model demonstrates that a structuredapproach to collaboration, based on consistency and accountability, can assist amultiple-contract program, especially when the partners demonstrate good character and leadership from all levels. For Loudoun Water customers, it meant a quality facility, built on time and within budgetary constraints, to meet theneeds of the surrounding community for many years to come.

CASE STUDY 2: PARTNERING ASSISTS SUCCESSFUL COMPLETION OF NEW JERSEY TRANSIT’S $210 MILLION LIGHT-RAIL EXTENSION IN NEWARK

The timely completion of Newark’s million new light-rail extension indowntown Newark is a further example of how a fully committed, ongoing partnering effort can assist teams on complex urban projects within the hard-bidpublic works contractual environment. Given the high-profile nature of the project,the team decided to pursue an ongoing partnering process as opposed to theapproach of a one-off kickoff session and lip service to a project charter. Accordingto Joe Marcello, director of Capital Project Management, “The consistent sense ofurgency and responsiveness … displayed were, without a doubt, key factors inmaking this construction project a huge success.”

4.50

4.25

4.00

3.75

3.50

3.25

3.00

Unit of measure

Exhibit 4

Team Evaluation Process

10/06

1/06

4/071/07

7/0611/04

10/05

4/067/05

4/05

1/05


THE PROJECTThe light-rail extension of Newark’s subway will enable passengers coming

from NJT’s suburban lines to reach Newark Penn Station within a few minutes.The line is intended to improve commuting to downtown Newark and its businesses and educational, recreationaland cultural facilities. Elements of theproject included:

• One-mile direct link betweenNewark’s Pennsylvania Stationand Newark’s Broad StreetStation.

• New stations at the New JerseyPerforming Arts Center, Bears& Eagles Riverfront Stadium,Broad Street at WashingtonPark, Newark Public Library and the Newark Museum, and Broad Streetbusiness district.

• Additional construction activities of power, rail installation and relocationof utility systems.

• feet of subterranean work, including the construction of a .’ x .’deep, cut-and-cover tunnel.

• Road improvements along Broad Street and other peripheral streets.• An -foot stretch of “floating” slab versus traditional grade slab to

dampen vibrations of light-rail cars that may rattle recording sessions orperformers at the nearby Performing Arts Center.

• A Wall of Fame honoring the lives and achievements of extraordinary performing artists from New Jersey.

According to Glenn Sweeney, Conti project manager, “Basically you’re plopping a light-rail line on the middle of a functioning city street.”1 Added KurtKaufman, former NJT project manager, “The protection of adjacent structureswas our largest challenge in the middle of a built-up business district.”2

PROJECT SUCCESSESThe project achieved success in a number of key goal areas, including:

• Schedule: The project came in on time, despite the utility relocation intensive nature of the work in a tight urban setting. Additionally, the team had to meet the milestone of % completion of rail infrastructurebefore beginning training of the operators of the new line. Station prepwork continued during the operator-training period to meet the grandopening date.

• Quality: In addition to successful completion of the above elements of the project, the artistic stonework along the Wall of Fame was overseendirectly by Conti to ensure top-notch quality. The plaque induction ceremony was the highlight of this portion of the work. According to

New Jersey Transit’s Light-Rail Extension’s Key Project Stakeholders

• New Jersey Transit (NJT):Owner• DMJM-Harris/STV: ConstructionManager

• BRW/Parsons Brinkerhoff: DesignEngineer

• Conti Group: Contractor


NJT’s Joe Marcello, “The finished product is a gleaming example of theteam’s attention to detail and insistence on excellent workmanship.”

• Budget: The team kept the final project budget amount close to NJT’sexpected value, with carefully thought-out value-engineering proposals.These were incorporated without affecting the schedule.

• Community Relations: Through the community outreach program, Conti and DMJM-Harris/STV informed the surrounding stakeholders and residents of upcoming construction activities. A focused effort was madeto keep the office building managers informed. Additional coordinationwas required with the Newark Bears, Newark police and any other eventsaffecting the job-site area. The team adjusted the schedule to assist with theSt. John’s parking lot. NJPAC called to thank the team for completingCenter Street on schedule.

• Effective Communication and Problem-Solving: The team significantlyimproved both RFI and submittal processes over time. Partnering also helpedthe team ensure an improved payment process as well. Pat Hogan, vicepresident of Project Engineeringand Management for Conti,said all of the organizations did a great job of “meetingsomewhere around in the middle of the complex, greyarea, sticky issues to avoid the‘no’ answers or perceptions ofprice unfairness on either side.”

PARTNERING PROCESS The process adopted by the

team was based on the principles ofcollaboration, accountability and consistency. On a project of this type,collaboration among all primary stakeholders and the surroundingcommunity was essential.Accountability was achieved by having an ongoing series of partneringactivities, requiring all parties toaccount for the various actions needed by each in a regular forum. Consistency inapproach involved the use of similar partnering reporting processes from all partiesamong the partnering forums. Elements of this ongoing process included:

Executive-Level Kickoff SessionA smaller group of senior-level personnel from all parties initially met to

agree on overall project goals and issue the escalation process and protocol as wellas the path forward for an ongoing partnering process. Pat Hogan noted that atthis session, “We set up a very structured process that included notice of proposedchange meetings, an escalation chart and an accountability matrix.”

Accountability wasachieved by having anongoing series of partnering activities,requiring all parties toaccount for the variousactions needed by eachin a regular forum.


Project-Level Session:In a subsequent session, the

team expanded to include all on-sitesupervisory personnel, engineers andkey subcontractors, where the projectcharter and issue escalation processwere finalized. Additionally, key issueswere identified and initial actions outlined by specific task force teams.

Quarterly Executive SessionsAt the continuing sessions, project

managers for the key entities provided a joint project update and team goals wererated and reviewed on a - to -point scale, where “” was considered “meetingexpectations,” “” was “exceeding expectations,” and anything less than a “” was “less than expectations.” These goal ratings provided the format for any teammember to provide praise about good work or to raise issues of concern. Actionswere developed on the key issues. Glenn Sweeney said, “We were able to reviewthe issues in a forum that was different than the regular project meetings. Havinga neutral party facilitate the sessions and a set schedule was a big benefit.” Eight of these sessions were held during the course of the project.

Team Evaluation ProcessAs a supplement to the executive-level sessions, a quarterly team evaluation

was administered and compiled by FMI. Similar to the goal-rating format, thistool asked a different set of questions to a different audience, which included project managers and on-site supervisory personnel. Results of the survey werereviewed at the quarterly executive-level session. A graph of the results of this evaluation is in Exhibit .

4.50

4.25

4.00

3.75

3.50

3.25

3.00

2.75

2.50

Unit of measure

Exhibit 5

NJT Broad Street Station Evaluation Overall Averages: April 2006 – September 2008

4/087/07

9/08

1/08

4/06

4/0710/07

1/07

10/067/06


Acceptance and Closeout SessionThis session, held in April , focused on ensuring expectations of all

parties were clearly understood regarding completion of construction, start-up of the light rail and closeout of all administrative details. Topics covered includedtrain and traffic signal plans, final resource loading for the schedule, resolution of change orders and clarity on definition of turnover to NJT. According to Pat Hogan, this session was one of the key successes of the partnering process.

A number of factors contributed to the successful completion of this project.The use of this partnering model demonstrates that a structured approach to theprocess, based on consistency and accountability, can assist a project team dealing with the ongoing issues on complex urban projects. For the business and culturalcommunity of Newark, that meant a successful project that came in on time. �

Bill Spragins is a principal at FMI Corporation. He can be reached at 303.398.7211 or via email at

[email protected].

1 (New York Construction, May ).2 Ibid.

D avid rubbed his forehead, trying to relieve the tension

he felt building in his head. He could not believe yet

another meeting with his executive team had taken a

turn for the worse. For the past eight months, he and the two other

primary owners, Robert and Brett, seemed to teeter constantly

on the brink of battle. David is the president and CEO of Salandar

Construction Company, but he rarely felt like he was leading anything.

Most of his time was spent in constant arguments about finances, strategiesand processes. As the three key leaders of the organization, their executive teamwas supposed to provide oversight and direction for the whole firm. Unfortunately,none of them could agree on anything. Every discussion quickly turned into anargument, and they spent the majority of their meetings fighting about issues irrelevant to the work at hand. David did not know when or how their conflictinitially started, but he recognized the ongoing tension was unhealthy and threatened their ability to lead the organization effectively.

David knew that, as the CEO, he bore the greatest responsibility to fix theissues of the executive team. Unfortunately, he had no idea where to start. Everytime it seemed the team had put its issues behind it, someone would make a

By Tim Tokarczyk

When handled effectively, conflictcan lead to positive outcomes,such as enhanced self-awareness,better teamwork, a more openand tolerant environment, andgreater personal growth.

Team Conflict: Potential Dangers, Hidden Benefits

62 � team conflict: potential dangers, hidden benefits

comment that would send the othersinto a rage, and their meeting wouldonce again spiral into chaos. As themonths wore on, David recognized hedesperately needed to try somethingdifferent.

David’s situation is a story all too common in today’s organizationsand, in particular, throughout the construction industry. Unhealthy,unproductive conflict can createheadaches for leaders at all levels of

organizations. The Washington Business Journal reported, “The typical managerspends %-% of his or her time dealing with workplace conflicts.”1 This meansthat leaders spend one to two days of every workweek managing employee conflict.Additional research by CPP Inc., exclusive publisher of the Myers-Briggs® assessment,shows that employees spend almost three hours each week dealing with work-related conflict, costing organizations more than billion dollars in a single yearalone.2 As these numbers suggest, conflict can be a major drain on the individualsinvolved as well as the overall organization. Imagine the effect on the organization’sbottom line if managers could use the time spent on dealing with interpersonalconflict on matters more important to the success of the business!

While conflict can create havoc at all levels of the organization, the ramificationsbecome more serious the higher up the conflict goes. Research shows that “one in eight employees (%) say that disagreements among their senior team are frequent or continual.”3 When unhealthy, unproductive conflict occurs at the topof an organization (as in David’s case), the trickle-down effects can be disastrous.Unchecked conflict produces many issues for companies. First, there is the time,energy and effort that is wasted on the conflict. Further, conflict can create toxicenvironments; lower morale; increase turnover, political infighting, backstabbingand dishonesty; and decrease productivity throughout the entire organization.Would you want to work for this kind of company? For most of us, the answer isan overwhelming no.

CREATE AN ENVIRONMENT OF TRUSTIn a high-stress, deadline-driven industry like construction, conflict is

inevitable and can occur for a number of reasons. First, each individual has his orher own communication style. For example, some people are more blunt andupfront, whereas others show more restraint and diplomacy in their communication.The ways in which we communicate can easily create conflict, especially when wespeak without fully thinking through the words we use, the tone in which wespeak them and how others may interpret our message. A great deal of conflictcan arise from simple misunderstandings or misinterpretations of what someone istrying to say or do. Second, individuals have their own personal values, a specificway of looking at the world and their own goals, plans and dreams. When twopeople with dissimilar values, attitudes or objectives clash, conflict can arise due tothese fundamentally different beliefs. We also see workplace tension emerge when


people are experiencing high levels of stress. The realities of today’s business meanswe are often juggling many obligations at a time, dealing with tight deadlines, balancing a heavy workload and working long hours. When stress goes unmanaged,it can easily give rise to tension and disagreements among individuals. In short,there is no way to obliterate all conflict from our organizations, as this element is a natural byproduct of human interactions.

Even if we could remove all conflict completely from the workplace, thiswould not be a wise or effective course of action. Conflict in and of itself is not a negative thing. Conflict can be, and often is, quite healthy and a core element in high-functioning teams. Think about this: We all have different viewpoints, opinions, ways of thinking and ideas. Would creative problem-solving and innovation occur if everyone were to agree with each other and silent their personal opinions? Probably not. Some of the most productive, effective meetingsinvolve a deep appreciation for conflicting ideas or opinions such that the result,made up of multiple viewpoints, is better than any individual’s singular plan orstrategy. We want people to feel safeand comfortable to speak up and sharetheir unique points of view, even whenthose opinions are in direct conflictwith others. One way to do this isthrough creating an open environmentof trust and mutual respect, wherepeople are encouraged, and perhapseven rewarded, to engage in a healthydiscussion of ideas.

FOCUS ON ISSUES AND GOALSWhen teams have no conflict at

all, they often slip into groupthink, amentality where people would rather promote group cohesion than question ideasor voice a dissenting opinion. Unfortunately, groupthink often leads to ineffective,flawed decision-making. In order to avoid issues like groupthink so that a teamcan perform at its peak, some conflict is required, even if tension and disagreementsmake people feel uncomfortable.

However, team conflict must be healthy and productive, unlike the conflictDavid experienced with his senior leadership team. In David’s situation, Robert,Brett and David were unable to communicate effectively. They disagreed on everything and spent most of their time together fighting about irrelevant issues. A more helpful situation for this executive team would involve an atmosphere oftrust and respect for these leaders to engage in a healthy, productive interplay of ideas. As previously discussed, task conflict can be productive, and is a necessaryelement in all our organizations.

The challenge emerges when conflict starts to become unhealthy, movingaway from the task and targeting the individual people involved. For example,perhaps David, Robert and Brett have discussed possible markets for expansion oftheir business, and David and Robert are directly in conflict. David believes theyshould explore the Atlanta market for expansion, while Robert believes strongly in

Conflict can be, andoften is, quite healthyand a core element inhigh-functioning teams.


focusing on Washington, D.C. A healthy conflict exchange might involve Davidsaying, “Robert, I disagree with your assessment. I’ve looked over all the numbersand projections, and it seems clear to me that Atlanta offers us the most potentialwith the least amount of risk.” The conversation here focuses on the task. Noticethat David is not shying away from his opinion, nor just relenting to preserve harmony and avoid conflict. However, he is concentrating on the issue at hand,rather than the person, Robert, with whom he is disagreeing. An unhealthy conflict exchange might have David replying, “Robert, how can you feel confidentabout what you’re saying? Remember the Phoenix disaster? We all listened to youand look how that turned out. You cost us millions of dollars, and I’m not goingto let you ruin this again. Atlanta isthe right answer.” In this scenario,David still voiced his opinion, but, in the process, managed to attackRobert personally.

This scenario is a bit simplified,but it illustrates the differences inhealthy, productive task conflict andunhealthy, unproductive relationshipor interpersonal conflict. In any situation where conflict is present, it is wise for those involved to ask themselves — “Is this conflict focusedon the issue or on the person?”

Unhealthy conflict typically targets people, including their personalities, shortcomings, failuresand mistakes. There is a huge difference between stating that an idea will not work and stating the person is stupid for suggesting the idea. Unhealthy conflict creates interpersonal issues that will carry forward into future conversations, perpetuating a vicious cycle ofunproductive tension and aggressive conversations. It is likely that David, Robertand Brett spend most of their time fighting about issues from the past, not thecurrent issues facing them. If the executive team at Salandar ConstructionCompany continues to have these kinds of conversations, morale will plummet,productivity will deteriorate and people may be so dissatisfied they leave.

So what can David do? When a team is mired in unhealthy conflict, what can it do to stop the unnecessary fighting and instead engage in healthy conflict?The first step has already been mentioned: Focus on the issues, not the people.Disagreements based on personal or relational problems are harder to resolve andoften get in the way of accomplishing work goals. One strategy for encouragingtask versus people conflict is to establish “civility rules” that depersonalize conflictso that people can fully engage with the most pressing business issues. Some civilityrules may include asking people to be respectful and not interrupt one another,minimizing snickering and promoting openness to all ideas. In David’s situation,he could ensure that all conversations focused on the key issues and were free ofany kind of personal attack. Secondly, he could actively listen to Robert and Brett.

There is a huge difference between stating that an idea willnot work and stating the person is stupid forsuggesting the idea.


PRACTICE ACTIVE LISTENINGListening might seem like an unlikely solution for unhealthy conflict, but it is

one of the most powerful tactics an individual can use to build strong relationships.Think back to an unhealthy conflict situation you were in — how much time did you spend listening and how much time did you spend talking? In most cases,individuals engaged in unhealthy conflict will listen just long enough to identifysomething they disagree with and then leap in to voice their opposite opinion. It is extremely difficult to have productive dialogue when we are always on thedefense, waiting to defend our point of view. By remaining quiet and actively listening to the other person, we will start creating a safer environment for othersto express their opinions.

The power of listening is also supported by Dale Carnegie, a well-knownbusiness author, who discussed how “becoming genuinely interested in people”and “be[ing] a good listener” are instrumental in developing thriving relationships.4

One strategy for strengthening active listening skills is to take a more objectiveperspective and listen to someone else as an “outsider.” With this point of view,your emotions and personal opinions are shoved to the side, and you become freeto hear the other person’s story with open ears and no hidden agenda. Eventhough David and Robert clearly disagree on the market expansion plans for theirbusiness, it would be helpful for them to acknowledge each other’s opinions andlisten actively with the intent to learn from the conversation. In addition to beingan active listener, David could also reframe the difficult situation he is facing.

REFRAME THE CURRENT SITUATIONReframing is another conflict management technique that leaders can use to

look at a situation from a different angle or perspective. Even though David believesSalandar Construction Company should focus on expansion in the Atlanta market,and Robert believes it should target the Washington, D.C., area, it is important for David to try to understand Robert’s point of view. Reframing the conflict mayinvolve David asking helpful questions around why Robert believes Washington,D.C., could be a profitable market and how expansion in this area fits well withthe long-term vision of the company. Asking clarifying questions, engaging indeep reflection and challenging assumptions about a person or situation are different techniques David could use to reframe the conflict in a more positiveway in order to create new insights and deepen his understanding of other pointsof view. Too often we perceive conflict as a “negative thing” — something thatneeds to be immediately managed and eliminated if we want to progress. By refocusing our attention on what we can learn from each other in difficult, high-conflict situations, we open ourselves up to hear things in new ways andestablish higher-quality relationships with our colleagues. In addition to reframingconflict in a different way, David could also focus on digging deep to get to the“real” source of conflict on his team.

Ongoing, unresolved team conflict can negatively affect productivity and workrelationships. In order to manage tension among team members, one must firstacknowledge that conflict exists and then search for the potential “root causes” ofwork-related disagreements. For example, conflict may occur because of differentcommunication styles, misunderstandings, dissimilar values and beliefs, high stress,


and/or a heavy workload, among other reasons. Once the real source of tensionhas been identified, appropriate actions can be taken to resolve this conflict. ForDavid and the leadership team, the real issue may not actually be deciding whichmarkets are best for business expansion. The source of their tension may rundeeper and actually be distilled down to a lack of trust among David, Robert andBrett due to previous miscommunication on earlier projects. Identifying that alack of trust is the root cause of the team’s tension will help each of these leadersstrategize ideas for moving forward as a cohesive unit. Alternatively, David alsocould encourage his leadership team to focus on shared goals.

When individuals lack goal clarity, are unsure of expectations or perceivecompeting objectives within their team, there is a high likelihood for conflict.One potential strategy for managing this source of tension is identifying sharedgoals — those overarching, common objectives that everyone on the team is striving to achieve. By highlighting the similarities rather than core differencesamong team members, it is possible to boost cooperation and collaboration. If you look at members of highly effective work teams, these individuals investgreat energy and effort to achieve team objectives rather than individual goals. At Salandar Construction Company, where the leadership team is constantly arguing about finances, strategies and processes, it is clear that this team has lostsight of the bigger picture and their core team objectives. Switching the focus toshared goals from competing goals can help these leaders see eye to eye and gain a greater understanding of what they need to accomplish together. Beyond goalclarity, David and the rest of his executive team could also benefit immensely from improved emotion management.

MANAGE EMOTIONS Conflict, of any kind, elicits intense emotional reactions. For example, tense

relationships in the workplace can generate feelings of distress, anger, disappointmentand anxiety. Individuals who are capable of managing their emotions, especiallyduring times of high conflict, are more likely to resolve work-related disagreementsin an effective, healthy manner. By developing high-quality emotion managementskills, you will strengthen your relationships, foster greater trust and enhancemutual understanding. On the other hand, individuals who lack emotional control, those without insight or the ability to rein in their emotions before theycommunicate, are less likely to resolve differences, calmly and respectfully. For theleadership team at Salandar Construction Company, everyone needs a good, hardlesson in emotion management. Imagine how much more effective this teamcould be if David, Robert and Brett were more aware of their own emotions andbetter able to control these feelings before speaking to each other about difficultissues. Too often we get in our own way by letting our emotions run the conversation. One final approach that would benefit this senior leadership team is training on conflict management.

DEVELOP CONFLICT MANAGEMENT SKILLSIf you search “conflict resolution training” on the Internet, you come up with

more than million hits. “Conflict management training” yields almost millionhits. These numbers clearly highlight the value that many place on learning and


developing skills on managing conflict. According to a CPP Global HumanCapital Report, “Training is the biggest driver for high-quality outcomes fromconflict.”5 A survey of more than , full-time employees across nine countriesrevealed that more than % of those who received some kind of conflict resolutiontraining at work believed it to be helpful. More specifically, of those who hadreceived training, % believed that training helped them gain confidence in their abilities to manage disagreements and tension, and % said they now payattention to the “win-win” benefits that can emerge from a conflict situation.With such a long history of unresolvedtension and ongoing arguments, thesenior leadership team at SalandarConstruction Company would likelybenefit immensely from taking acourse on conflict management orconflict resolution.

CONCLUSIONDavid and his colleagues have

many available options to help manageconflict and tension in the workplace.These leaders would be more effectiveif they focused on the issues ratherthan the people involved, practicedactive listening, reframed the currentsituation, identified the root cause ofworker disagreements, clarified sharedgoals, better managed their emotionsand/or developed conflict resolution skills through training. Each of these strategiesequips individuals with the proper tools to engage with others who may have different views and opinions. When handled effectively, conflict can lead to positive outcomes, such as enhanced self-awareness, better teamwork, a more openand tolerant environment, and greater personal growth.

Conflict is a reality in today’s workplace that unfortunately comes with a heftyprice tag. To find out what conflict might be costing you and your organization,take the quiz in Exhibit .

If you are ready to be a more successful leader, what is one thing you can do today to minimize the risks and enhance the benefits of conflict in your organization? �

Tim Tokarczyk is a consultant with FMI Corporation. He can be reached at 303.398.7222 or via email at

[email protected].

1 Washington Business Journal. May .2 CPP.com survey. .3 CPP.com survey. .4 Dale Carnegie’s “How to Win Friends and Influence People.” , , .5 CPP.com survey. .

Exhibit 1

Cost of Conflict Quiz

What Conflict Might be Costing You

To find out the financial costs of conflict, here is a simple exercise:

1. How much time/week, on average, do you spend dealing with workplace conflict (interpersonal, your own, organizational, etc.)? ________ hours/week

2. What is your hourly rate of pay? $_________

3. Multiply #1 _______ by #2_________ = $_________/week

4. Multiply #3_______ x the number of weeks you work each year (_____) = $________ total dollars spent by you, alone, in conflict management.

Source: Niagara Street Consulting, February 2012.

by Wallace Marshall

T he value of teamwork has been emphasized for so

long that it is hardly necessary to make a case for its

importance. The basic essentials of a positively functioning

team are a well-worn theme in books on management and leadership.

What is less well-known is a growing, but highly important, body of

research revealing the dangerous “groupthink” phenomenon that

results from overfocusing on teams to the exclusion or diminishing

of individual activity.

This article reviews and reinforces four essentials of good teamwork, explainsthe dangers of groupthink and offers some suggestions for achieving an optimalbalance between team and individual activity.

FOUR ESSENTIALS OF GOOD TEAMWORKWhatever the dangers of teamwork, teams are a fact of life. Many of the

tasks we prosecute, in our families and much more so in our businesses, requiremultiple people to accomplish. It behooves us to make the most of these situations.With that in mind, let’s review four essential characteristics of a smoothly functioning team.

Teamwork Without Groupthink

If groupthink and e-communica-tions present dangers to be avoided, they also present a tremendous opportunity tounlock, harness and develop yourfirm’s intellectual capital.

70 � teamwork without groupthink

LeadershipMost of us have heard the old joke about a camel being a horse designed by

a committee. The No. factor behind this problem is inadequate leadership.Without good leadership, it is nearly impossible to harness the activities of thegroup and point it in a common direction. A large project may require a teamwith multiple leaders, but even then, it is essential for those subleaders to report toa single person who assumes final responsibility to direct the group’s individualcapabilities to achieve its goals.

The best leader for a team is often not the most senior or charismatic memberof the team. Seniority and charisma may be factors in choosing a leader, but theprimary criteria should be:

• Ability to communicate clearly • Clear understanding of the goals to be achieved • General familiarity with the variety of activities the team will engage in • Available and dedicated time to carry out the duties involved in leading

the project

Task AllocationA team functions best when tasks are allocated to the people who are most

qualified and have the available time to execute them. Note that qualification isnot the only factor. A -person team may have two members who are most qualified to prosecute all of the team’s tasks; but rarely will those two people haveavailable time to accept that much responsibility. Therefore, qualification has tooccupy a subsidiary position relative to the time commitments each member iswilling to accept.

Even on the assumption of equal available time, it is sometimes appropriate to assign tasks to a less-qualified person. This commonly occurs when there is adesire to train an employee to acquire new skills. Nothing is wrong with this, and itillustrates that team goals cannot be carried out in isolation from broader corporateobjectives. But much frustration can be avoided if this broader goal is specificallyacknowledged at the outset so that the rest of the team acknowledges that the individual in training faces alearning curve and will thus requiremore time and support to execute hisor her responsibilities.

Do not overlook the fact that this support function is itself a teamtask that needs to be assigned andacknowledged by the person or peoplewho will be providing it. Otherwise, a negative pattern may ensue whereassistance is grudgingly offered, resulting in the trainee not reachingout for assistance often enough and a subpar work product.


CommunicationThis characteristic is obvious enough but can scarcely be overemphasized.

Nothing hinders the proper functioning of a team more than a failure to communicate frequently and clearly. One of the key responsibilities of the teamleader is to ensure that lines of communication are established and remain open.

Communicating ElectronicallyAs helpful as electronic communication is, it should never take the place of

oral communication via phone and face to face. Many people are not good writers,and they often are not good readers either. Written communication needs to besupplemented and reinforced by oral communication. Team membersshould also be encouraged to considerwhether oral or email communicationis more effective for a given purpose.Think about an hour-long string ofback-and-forth emails that could havebeen avoided if someone had simplypicked up the phone and engaged in a five-minute conversation.

People should also use cautionand avoid unnecessary copying inemail communication. Since one of theprimary causes behind this redundancyis a “CYA” mentality, it is essential forteams to develop and retain an openand trusting environment. Encourageteam members to use the “CC” and“Reply-to-All” functions judiciously. Failure to do so results in needless energybeing consumed by team members and especially team leaders. It also develops apropensity to ignore or glide over messages, which can be highly damaging when a message comes along that really is important to the recipient.

Conflict ResolutionEven the best of teams cannot completely avoid conflict. Team projects involve

numerous decisions on which members often will not see eye to eye. Resolvingthese conflicts is one of the most important responsibilities of a team leader,though the responsibility does not rest solely on the leader. Here are some tips forminimizing and resolving conflicts.

First, stress to the team at the outset of the project that it is going to have someconflicts and that this is O.K. This will make the conflicts less personal when theydo occur, and it will ensure that conflicts are properly aired and resolved. Fewthings render a team more dysfunctional than conflicts that remain under thetable instead of being put on it. Since most of us are averse to conflict, our naturaltendency is to mute our disagreement or, worse, engage in tacit resistance.

Second, establish a method for resolving and (where necessary) escalating conflicts. Encourage members to resolve conflicts among themselves before

As helpful as electroniccommunication is, it should never take the place of oral communication viaphone and face to face.


escalating them. Third, encourage the airing of differences of perspective in team meetings. Fourth and finally, it is essential for leaders to resolve conflictsimpartially, based on what most contributes to the accomplishment of groupgoals. Members will reconcile themselves more easily to resolutions that go againsttheir opinion if they feel that their opinion has at least been given a fair hearingand that the leader is doing his or her best to resolve conflicts with the goals of thegroup rather than personal prejudices in mind.

To better grasp how some of these four guidelines work, consider the followingexample of an internal meeting a contractor is having about how to chase a bigproject that will be hitting the street a year from now (italics indicate what theperson is really thinking):

Team Leader, Bill: “Jack used to work for this owner, so I think it makes sensefor him to lead the chase for this project. And then, Tom, you can come behindJack and bring in others as needed.”

Regional Controller, Jack: “Sure.” [I just hope Ricky or Sue is not on the decision committee. I didn’t get along with Ricky, and Sue wasn’t happy when I left.]

Business Developer, Tom: “Yeah, be glad to help.” [But I know Jack was notuniversally liked by people at this client. That was one of the reasons he left. And wedon’t even know who’s going to be on the committee yet!]

Project Executive, Joanna: “Sounds like a good start.” [I really like Tom, buthe is not the best person to come behind Jack. He has the “gift of gab” but doesn’tknow how to ask questions. He spends too much time talking about himself instead of asking questions and listening.]

Lead Superintendent, Jerry: “Just let me know when the target is ready todive into the details of this project.” [If they were smart, they’d get me in there rightfrom the start. I will bet you anything Lisa is going to have the strongest voice on thedecision committee, and she and I had a fantastic experience together on that project I did for her at Jamestown when I was with my previous employer.]

Here is a progressive and proactive contractor that rightly understands howimportant it is to build a relationship with the prospective client. However, keyissues likely to derail the chase are being swept under the rug. No one is aware ofthe influential role Lisa is likely to play, nor of the prior positive experience Jerryhad with her when he worked for another contractor. Jerry thinks to himself, “Ifthey don’t care enough to ask, there’s no reason for me to tell.” Tom and Jack bothrecognize that Jack’s prior relationship with the prospect might hinder the pursuitinstead of helping it, but Jack does not want to make himself look bad and Tomdoes not want to hurt Jack’s feelings. Joanna usually speaks her mind but does notwant to damage her friendship with Tom.

There are broader organizational issues here, of course. The contractor clearly lacks a culture of constructive criticism. It also has not taken the initiativeto compile a database of relationships its key personnel had with prior employers(frankly, it has difficulty keeping up with current relationships.) There is a “make-it-up-as-we-go” mentality — crafting and enacting a plan on insufficientmarket intelligence. Jerry’s thoughts indicate that the company probably suffersfrom the typical conflict between sales and operations.


Those are large hurdles to overcome, but Bill might be able to surmount themwith better team leadership skills. Potential roadblocks are not being identifiedbecause he has not previously conditioned the team to air conflicts. Since the teamdoes not see the healthy side of conflict, personal relationships are getting in theway of honest feedback. Jerry’s communication policy, which is quite commonamong field personnel, is “Don’t ask, don’t tell.” Nor is Bill making the necessaryeffort to solicit and probe for feedback. He simply assumes that if no one objects,he or she must be on board. The result is a misallocation of tasks, a temporaryburial of conflict and probably an unspoken cynicism that is already seeping into

the team. At a bare minimum, hecould conclude the above discussionby asking, “So does anyone see anypotential problems with this approachor have some suggestions about howto improve it?”

THE DANGERS OF “GROUPTHINK”Can there be such a thing as too

much teamwork? Aren’t well-oiledteams that adhere to good rules ofteamwork all that is necessary forachieving success?

The answers are “Yes” to the first question and “No” to the second.Sociologists and organizational

psychologists have increasingly become aware that too much focus on teamworkcan dramatically reduce workplace productivity. Their most obvious finding —and one most of us can probably relate to in our personal experience — is thatmental focus has a marked tendency to dissipate in group settings. Althoughgroup conversations can certainly stimulate thought (more about this later), ourmore common reaction is to park our brains in neutral or semi neutral and let the group do the thinking for us.

Problem-solving skills also are diminished. The most ingenious solutions areoften the product of sustained concentration. Even if members of a group are not downshifting their mental apparatus during a meeting, the fact that multiple people are speaking means that trains of thought are not likely to persist for longbefore being interrupted, especially if the group is marked by the (otherwise positive) characteristic of sympathetic listening.

Group settings also tend to hinder creativity. This is particularly true for themost creative personality types, who are generally introverts and thus tend to workfar better in private than they do around others. This rule seems to hold for otherpersonality types as well. As Susan Cain observes in a fascinating New York Timesarticle published last year, when it comes to generating ideas, “decades of researchshow that individuals almost always perform better than groups in both qualityand quantity, and group performance gets worse as group size increases.”1

One of the biggest reasons for this phenomenon is the social conformity biasthat comes into play in group settings. In her book, “Quiet,” Cain summarizes

Aren’t well-oiled teamsthat adhere to goodrules of teamwork allthat is necessary forachieving success?

a study led by Gregory Burns, a neuroscientist at Emory University. Burnswas well aware of the classic studies conducted during the s by psychologistSolomon Asch, which showed that conformity bias could dramatically reduce thepercentage of correct answers given by group members to relatively simple questions.Burns wanted to conduct a similar experiment using brain imaging in order to findout the extent to which group members affected by conformity bias committed

their errors wittingly or unwittingly. The subjects in Burns’ experiment

demonstrated the same conformitybias participants in Asch’s study hadexhibited, and fMRI (functional magnetic resonance imaging) revealedthat when they made their errors underthe influence of this bias, heightenedbrain activity occurred not in the prefrontal cortex associated with decision-making, but rather in regionsassociated with spatial and visual perception. This indicated that error-

prone subjects were not simply selecting an answer they knew to be wrong inorder to fit in with the group, but actually had their cognitive perception reshapedby group factors.2

Group settings, then, are hardly a panacea. They have a demonstrated tendencyto dissipate mental energy, interrupt concentration, diminish creativity and cloudobjective thinking. The larger the group, the stronger these tendencies will be.

TEAMWORK WITHOUT GROUPTHINKOne clear conclusion that emerges from these studies is that teamwork comes

at a price or, at the very least, with dangers that need to be taken into account ifteams are to function at their highest level. Here are four rules for doing that.

Create Space and Time for Your People to Work AloneThis is the most important lesson to learn from studies on groupthink.

Anyone who has spent much time visiting businesses will have seen the tremendousshift toward the use of cubicles in office-space design during the last decade. Theshift is partly attributable to cost-cutting measures, but the bigger driver by far hasbeen a desire to encourage more interaction among employees. Cubicle walls havegrown lower or made transparent. An increasing number of companies are doingaway with partitions altogether and moving to open floor plans.

Great recipe for teamwork, right? Wrong. A forthcoming study in the Journalof Experimental Psychology by Erik Altmann, et. al., lays out the tremendousdownside to these open environments: constant interruptions and distractions that hinder concentration, reduce productivity, promote mental exhaustion anddramatically increase the likelihood of employee errors.3 One of the most strikingfindings of the study is that after an interruption, it takes employees an average of minutes to resume their tasks and additional minutes to return to their previouslevel of concentration. As one might expect, this phenomenon is heightened



when employees are working on a task they regard as tedious or unpleasant. If the average employee needs time alone, this is all the more true for leaders

and other figures within a company who shoulder a larger share of responsibilityfor innovation and strategic direction. A recent Wall Street Journal article bore theheadline, “Logging How CEOs Spend the Day; Little Time to Think.” Thearticle summarized the results of a joint study by the London School of Economicsand Harvard Business School that delved into the day-to-day activities of CEOs.The researchers found that during an average -hour week, CEOs spent a measlysix hours working alone. Three times that amount was consumed by meetings.4

The lesson to be learned from this organizational research is that it is essentialto create space and time for both yourself and your employees to engage in sustained focus on daily tasks and on strategic issues facing your company.

Interruptions Gone WildCoworkers are not the only threat to organizational creativity and productivity.

Even a perfectly designed office plan cannot guard against the intrusion of emailand cell phones. “The frequency of interruptions is higher than it’s ever been,”says Altmann in an interview withFMI. “And with the ones that comeelectronically, there’s no sensitivity to the state of the person being interrupted. No one’s looking at youand making a decision about whetherthe importance of the communicationoutweighs the consequences of theinterruption.”

Indeed, for all the benefits of these modern communication tools,numerous studies have shown that if they are not intelligently managed,they have a tremendous potential tofragment our concentration, reshapeour brain patterns and even creategenuine addiction.

Research has confirmed that thefamiliar buzzes and bells alerting us to a new message actually trigger asmall release of dopamine in ourbrains because we associate these alerts with the pleasure of finding out somethingnew and interesting. As Matt Richtel, technology reporter for the New YorkTimes explains:

When you check your information, when you get a buzz in yourpocket, when you get a ring — you get what they call a dopamine squirt.You get a little rush of adrenaline. Well, guess what happens in itsabsence? You feel bored. You’re conditioned by a neurological response:‘Check me, check me, check me, check me.’5

It is essential to createspace and time for both yourself and youremployees to engage in sustained focus ondaily tasks and on strategic issues facingyour company.


Once this addiction is in place, it reduces our capacity for sustained concentration because our brains have become wired to anticipate, and even crave,an interruption.

Most of us are all too familiar with the way this phenomenon constantlyinvades the workplace, to say nothing of our personal lives. It is rare to attend ameeting in which all the attendees are “really there” all the time. Combine thisphenomenon with an undisciplined embrace of group culture, and the result is anorganization whose collective capacity for serious strategic thinking and innovationwill be significantly diminished.

Create a Culture of Preparing for Meetings by ThinkingThe concern here is not the ordinary, functional preparation for meetings we

are all familiar with, but rather, the preparation of thinking. This is a particularlyimportant point for team leaders. When you lay out the agenda for the meeting,write a few bullets, or one bullet, summarizing the key questions that will be onthe table and specifically encourage the team to spend time to reflect on thoseissues in advance.

Create a culture where people who attend meetings will be expected to sharewith the group the results of their prior thinking. Once that expectation is firmlyin place, it will fundamentally change the way people prepare and will vastlyimprove both the liveliness and quality of the meeting. It will also counteract the

conformity bias. People who havethought out and articulated their ideasin private will be much less likely toadopt the ideas of the dominant personalities in the group.

Optimize BrainstormingThe best kind of brainstorming

results from individual brainstormingfollowed by group brainstorming. As discussed above, the value of individual brainstorming is that ittends to produce more and betterideas than would be the case if a person does his or her brainstormingwhile in the company of a group.

The value of the group, of course, is that it provides a forum for individual ideas to be compared, critiqued and refined.

This may even require a reconfiguration of your office space. As Erik Altmann, the lead author of theaforementioned study in the Journal of Experimental Psychology advises, “You haveto make it easy for people to have privacy, and you have to make it equally easy forpeople to have informal conversations. They are both really important. Probablythe best thing you can do is give people offices that are soundproof when the door

The value of individualbrainstorming is that ittends to produce moreand better ideas thanwould be the case if a person does his or herbrainstorming while inthe company of a group.


is closed so they can block out interruptions and distractions, but also have theoffices arranged in such a way that when the doors are open, coworkers can seeeach other and stop in.”

Educate Your TeamsAs the old adage goes, identifying the problem is half the solution. A first and

simple step management can take to avoiding the dangers of groupthink, emailand cell phones is teaching its employees about those dangers. People who areaware of the common pitfalls of group interaction will be less likely to fall intothem. Employees who are educated about cell-phone addiction will be less likelyto be victimized by it.

Do not overlook practical matters, such as tips provided by your IT groupabout how to alter cell phone settings. The default setting on many iPhones is abuzz or a bell whenever a new text message or email arrives. Some employees do notknow how to change these settings unless they have specific instructions to do so.

CONCLUSIONIf groupthink and e-communications present dangers to be avoided, they

also present a tremendous opportunity to unlock, harness and develop your firm’sintellectual capital. Because so many companies are unaware of these dangers, and fewer still are addressing them, the potential gains are far from incremental.Transforming your organizational culture in this way will not occur overnight andwill require strong leadership that practices what it preaches. However, onceaccomplished, it will fundamentally differentiate your company and create anadvantage competitors will not be able to replicate easily. �

Wallace Marshall is a consultant with FMI Corporation. He can be reached at 919.785.9279 or via email


1 Susan Cain, “The Rise of the New Groupthink.” New York Times, January , page SR.2 Susan Cain, Quiet: The Power of Introverts in a World That Can’t Stop Talking (New York: Crown Publishing ), -.

Numerous studies have shown that women are more susceptible to this bias than men are, though the causes for this divergence are

a matter of some debate. See Steven Breckler, James Olson and Elizabeth Wiggins, Social Psychology Alive (Belmont, Calif.:

Thomson Wadsworth, ), -.3 Altmann, E. M., Trafton, J. G., & Hambrick, D. Z. (in press). “Momentary interruptions can derail the train of thought.” Journal

of Experimental Psychology: General. doi:./a.4 Rachel Emma Silverman, “Where’s the Boss? Trapped in a Meeting: Logging How CEOs Spend the Day; Little Time to

Think.” Wall Street Journal, February .

http://online.wsj.com/article/SB.html.5 “Digital Overload: Your Brain on Gadgets.” Matt Richtel, Interview with Terry Gross on NPR’s Fresh Air, August .

http://www.npr.org/templates/story/story.php?storyId=.

Z urich, a leading property and casualty insurance

provider globally and in North America, and FMI

Quarterly’s publishing partner, recently introduced a

new benchmarking and loss assessment tool for its construction

customers. The Construction Value Proposition (CVP) identifies

savings and loss mitigation solutions.

These solutions are based on the following comparisons:

• Benchmark Loss Comparison — Evaluates a company's loss experienceagainst contractors with similar industry classifications, payroll sizes andexposure states.

• Benchmark Frequency Rate — Compares a company's loss rate to similar contractors.

• Benchmark Loss Comparison by Coverage — Determines the exposuresmost dramatically affecting losses through a detailed analysis of a company’sloss history by coverage.

Using the benchmark tools, loss leaders are analyzed on an exposure basis,showing key loss leaders, including the associated claim costs. Based on these findings, Zurich works collaboratively with contractors to help identify, prioritize

By Kelley Chisholm

Building RelationshipsThrough Zurich’sStewardship Program

Our relationships are built on trust.

80 � building relationships through zurich’s stewardship program

and implement loss reduction strategies as described in its online Tool Crib. The Tool Crib features risk engineering and claims services in combination withinsurance products to supplement a company's risk management program. The Tool Crib can be accessed at http://www.zurichna.com/construction.

FMI Quarterly recently spoke with Nancy Simonson and Kim Guentzel tolearn more about how Zurich uses CVP in its stewardship process.

Chisholm: Let’s start off by letting our readers know about your roles atZurich, since they focus specifically on customer relationships.

Simonson: I'm a vice president in our construction group and focus on building and maintaining relationships through forums such as executive summitsand risk manager councils that provide thought leadership topics and facilitate discussions around construction industry issues. Additionally, I work across theZurich organization to develop and promote new insurance concepts that affect the industry, such as public-private partnerships, enterprise risk management and supply chains. I alsowork with our field teams to assure we are identifying and developing theappropriate resources to support theircustomer relationship activities.

In Zurich’s construction segment,we have approximately offices with dedicated underwriting, riskengineering and claims teams thatbuild customer relationships, thereby helping to fulfill our vision of being the recognized leader in providing creative risk solutions for the construction industry.We have underwriters who are dedicated to analyzing and pricing risks that contractors face every day and provide the most robust array of coverages availablein today’s market. We hire risk engineers from the construction industry whounderstand the issues contractors face and focus on working collaboratively withcontractors to solve their issues. That's why our risk engineers have developed specialized programs, like QA/QC, to address construction defect issues and others,like Drive to Zero, to manage worker safety. We have claims personnel who areknowledgeable in construction operations and focus on providing expertise inclaims management and construction defect. Both our claims and risk engineeringpersonnel receive excellent ratings from our construction customers.

Chisholm: Tell us about your role at Zurich, Kim.Guentzel: I'm the director of the Customer Insights Team (CIT). Our role

includes enhancing the customer experience through stewardship, executing valuepropositions (competitive advantage statements) that highlight our knowledge andexpertise in the construction industry and supporting Zurich’s “thought leadership”position, which helps enhance our brand recognition. I think one of the mostimportant aspects of the CIT is that we help pull the field teams together to talkthrough customer issues, concerns, etc. We help facilitate those conversations anddevelop professional programs and materials that our field teams share with their


customers. These materials include loss, claims management and risk engineeringreports designed to help address the leading causes of loss for our customers.

By helping develop a customized strategy — whether it's insurance productsor loss mitigation programs, we assist the field in preparing a presentation thatconveys Zurich’s construction value proposition. We take work off the accountteams so they can focus on their relationship with the customer, because we recognize that is their most important function.

The CIT also is responsible for facilitating development of thought leadershipmaterials. For example, we provide quarterly construction and design webinars,distribute specialized construction materials like the FMI Quarterly and publishour own HelpPoint Delivered newsletters, which are construction-specific and talkabout issues happening in the industry. We work with Nancy and others on eventslike the Contractor’s Summit, the Zurich Construction Risk Manager Council,the National Construction Roundtable as well as other customer-facing activities.

Our field teams also conduct stewardship meetings with our brokers. I wantto mention that because we work with independent agents, and a big part of ourclient interface is with the broker, not just one-on-one with our customers.

Chisholm: Tell us about Zurich’s stewardship process.Simonson: About two years ago, Scott Rasor, head of Construction, had an

“aha” moment. In discussions with a key construction broker, Scott received thefollowing feedback: “Zurich Construction provides the best coverages and servicesavailable, but your people never tell anyone about it. Your underwriters don’t talkabout it; your service teams don’t mention it.” So we made a strategic decision to build a repeatable stewardship process to help our field teams build strongercustomer relationships and better articulate our value proposition.

Our stewardship process consists of benchmarking loss experience, providingrelationship highlights and developing action plans aimed at achieving mutuallyagreed-upon goals.

We also have developed a number of value propositions that help define whatwe do to makes us a leader in the construction insurance industry.

Chisholm: You have two tools that you use for stewardship, ConstructionValue Proposition (CVP) Light and CVP Heavy. Tell us about those.

Simonson: For the CVP Heavy, we have assembled an extensive database ofloss experience based on construction standard industry classifications (SIC). Thisenables us to benchmark our larger contractors, those with credible loss experience,against their industry peers with similar size, scope and geographic regions. For our midsize customers, we use the CVP Light, which demonstrates Zurich’s loss experience and associated loss mitigation techniques for contractors of similar scope.

After displaying the benchmarks/loss experience, both CVPs make recommendations on how to mitigate the contractor’s loss leaders. This representsthe two or three risk mitigation programs that the contractor, broker and Zurichagree to focus on over the next months.

We have several industry service offerings designed around specifically mitigating construction risks. One tool we might recommend is the HighwayWorker Safety Program we developed with AGC to address exposures associated

82 � building relationships through zurich’s stewardship program

with five primary construction industry hazards. We also may recommendFightReady™, where we work with an outside vendor to ensure the specific drugand alcohol testing policies are current and compliant for our contractors, becausemany of them work over state lines. For our midsized customers, we have a varietyof Web-based and on-demand tools and training opportunities. Regardless of the stewardship tool being used, we customize each presentation to match thecontractor’s unique insurance needs.

The flow of the meeting is important. After the welcome and introductions,we have an agenda geared to making sure our team is asking the customer what

ZURICH’S CONSTRUCTION VALUE PROPOSITION

Zurich’s Construction Value Proposition (CVP) tools identify savings and loss mitigation solutions through benchmarking and loss assessments.

CVP Light Stewardship ToolsThere is a standardized template for each of the middle-market targeted SIC codes that includes:

• Prefilled charts that highlight the typical causes of loss and Zurich’s loss experience by SIC• e-tool capabilities that are the cornerstone of Zurich’s middle market service strategy

The template typically is developed and delivered to the broker, concurrently with the insuranceproposal. It is ideally suited for presenting to prospects, regardless of size.

The account team develops these materials to assess an organization’s overall loss performance and identify proactive steps needed to promote a culture of continuous improvement. For example, the team will identify the primary hazards associated with street and road construction, and may include:

• Workers’ compensation • Property: Installation/rigging• General liability • Property: Builder’s Risk• Environmental/pollution • Automobile liability• Property: Contractor’s equipment • Special exposures specific to street

and road contractorsSICs available for CVP Light:

• 1542: General Building • 1743: Tile and Marble• 1611: Street and Road • 1751: Carpentry• 1623: Utility • 1761: Roofing• 1711: Plumbing and HVAC • 1771: Concrete• 1721: Painting and Paper Hanging • 1793: Glass and Glazing• 1731: Electrical • 1794: Excavation• 1741: Masonry

Other CVP Light options include:

• Construction overall (All SICs combined) • Consolidated Insurance programs• Builders Risk

CVP Heavy Stewardship ToolsThe tools are used for larger accounts with revenue in excess of $50 million.The CVP Heavy template includes:

• Customer relationship highlights• Charts that benchmark the customer against the industry and best-in-class firms• Customer leading causes of loss charts• Actual savings to the customer• Next steps, designed to mitigate causes of loss

CVP heavy is used at midterm stewardship or kickoff rather than at renewal to help drive theservice strategy — it is also good for new business prospects.


its business outlook is and thanking it for its business. Next, we have the team communicate what its value is to the customer and why our relationship is beneficial. This is the area where Kim and I spend a lot of time coaching our fieldpeople to help them articulate what their real relationship is with this customer.

Kim can describe the way we demonstrate our thought leadership in the construction industry and how we deliver “next steps.”

Guentzel: We identify topics that are really affecting the construction industry— issues our contractors are struggling with. We address those topics throughforums like our HelpPoint Delivered newsletter, Construction and Design RiskWebinars and FMI Quarterly interviews. Another item we highlight is upcomingindustry events — in particular things where we have people from Zurich speakingor participating. We're also letting people know about other local and regionalindustry associations that we belong to and actively participate in.

Under the “next steps,” we document the deliverables agreed upon, which helpsto engage all participants in the relationship and the solutions. Our field teams tellus this is a positive step and helps to assure that agreed upon actions are completed.

Both versions of the CVP have also been successful in helping us demonstrateour knowledge of the construction industry and our capabilities to new customers.

There is an enormous amount of value in the amount of training and mentoring that happens as part of this process. We often have Nancy, or anothermember of the executive team, involved in the conversation. It's a great opportunityfor her to talk about some concerns that she may have with the customer oraddress some issues she think the customer may be having with us or with ourservice. It just helps our underwritersand the team be even more credibleout in front of the customer.

Chisholm: What is the most important thing that Zurich does tomaintain long-term relationships?

Simonson: I would say that themost important thing is that our relationships are built on trust. Trustin our financial stability, our expertisein construction, our knowledge inconstruction worker compensation, general liability, construction defect claimhandling and the risk mitigation programs designed to reduce the cost of loss to thecontractor. Our CVP platforms and the stewardship meetings that take place allowus to articulate the value our teams perform every day in servicing their customers.

FMI Quarterly thanks Nancy and Kim for their time and insights on Zurich’sstewardship process. �

Kelley Chisholm is the editor of FMI Quarterly. She can be reached at 919.785.9215 or via email at

[email protected].

FMI Corporation, in collaboration with The Ironworker

Management Progressive Action Cooperative Trust

(IMPACT), developed the Job Profits Program (JPP),

an internal training program for the ironworking industry that helps

field supervisors understand how their efforts affect company profits

and why those earnings are so important.

In today’s tight-bid and low-margin market, project managers, superintendentsand foremen must be able to meet or beat estimates. This skill is crucial to theprofitability of a firm, and it can make or break a company’s success. This articlepresents a case study of Bennett Steel, Inc., a structural steel service provider in northeastern Oklahoma, and highlights how the Job Profits Program has had far-reaching implications for the organization.

BENNETT STEEL: PLAYING TO WINAs for many contractors in the nation, navigating the murky waters of the

Great Recession has not been easy for Bennett Steel, Inc., of Sapulpa, Okla.“There were very few projects that came back with positive cash flow at the end,”says Harvey C. Swift, field operations manager for the firm. Founded in , thecompany has grown from a -employee, two-crane company to a successful

By Sabine Hoover

Boosting Your BottomLine by Empowering Front-Line Supervisors

A builder can reduce some costs,such as training budgets, with nonegative impact on the bottomline, right? Wrong.

86 � boosting your bottom line by empowering front line supervisors

enterprise employing to

workers, depending on the local market dynamics and the company’scurrent workload.

During the last few years, balancing those employee numberswith corporate profits has been a challenge for the steel fabricator/erector,headed up by Dave R. Bennett, company president. For help, herecently turned to the Job ProfitsProgram for contractors, erectors andfabricators. Run by FMI Corporationin collaboration with IMPACT, the

program is customized to fit a company’s specific needs and delivered in-house forfield supervisors. In short, the Job Profits Program teaches field managers whyprofits are important, how lean profits are in the construction industry, and whatspecific steps field managers can take to improve profits.

Bennett and Swift both see Bennett Steel’s program participation as an integral piece of their company’s recovery and anticipated return to profitability.Within a few months of participating in the program, Swift says the firm’s steelerection division improved profits again. “Some of that is a direct result of the Job Profits Program,” Swift says.

BACK TO BASICSThe one-day Job Profits Program mixed both lectures and discussions with

practical application through hands-on activities and exercises. Prior to attending,participants were asked to complete a productivity survey, the result of whichdrove content development to meet specific organizational needs and to identifyopportunities for improvement for the company.

The agenda for this customized session included the following five distinctcontent sections:

• Field Management: Opportunities and Obstacles• Impact of Productivity Changes on Financial Performance• The Productivity Toolbox — Habits of Effective Field Managers• Workshop: Utilizing the Productivity Toolbox to Improve Job Profits• Making the Personal Commitment: Your Action Plan

Each content section provided value to the participants as an entire group and for specific individuals within the larger group. Participants learned about the role of a foreman and superintendent in managing job profits, becoming alow-cost producer by working smarter, identifying weaknesses in a company’s current field management practices, and keeping score and measuring profits,among many other things.

Swift says both he and Bennett also benefited from a -minute, post-programconversation with the instructors who led the effort. In addition, as the pair was


exiting the training site that day, Swift says he and Bennett concurred on at leastone key point: For the target audience, the experience was worth times the actual cost of the program. “Dave said that this program — as opposed to anyother training session that we knew of — stood the chance of having the greatestimpact on our bottom line,” recalls Swift. “He was very impressed with the whole experience.” Another programparticipant confirmed this reactionand said, “This is something we haveneeded for years.”

MEASURING THE BENEFITSAs one of the most sought-after

steel erection service providers innortheastern Oklahoma, Bennett Steelis focused on providing clients with the highest-quality construction services,delivered safely and on time. According to Bennett, these missions are accomplishedthrough several avenues, including the firm’s core values and beliefs, which arehonesty and integrity, safety and quality, experience and education, and trainingand leadership. By achieving these goals, Bennett Steel, Inc. also improves its surrounding community by bettering its employees’ standard of living.

Bennett Steel’s employee base is highly skilled, trained and drug-free. Eachjourneyman ironworker is a qualified rigger and signalman. Every ironworker hascompleted an OSHA -hour course within the past five years. “Our clients andtheir customers directly benefit from our trained and skilled drug-free workforce,”says Swift.

In assessing the positive effects that The Job Profits Program has had onBennett Steel’s workforce and on company growth over the last few months, Swift says much of the improvement can be traced back to its field supervisors’

mentalities and attitudes. “They lookat things from a different perspectivenow,” he explains. “They put moreintrospective thought into tasks anddecisions, and they also seem to have a better grasp of how their activitiesaffect job margins.”

Perhaps even more importantly,Bennett Steel’s field supervisors cameaway from the program understandingthe effect that their individual activitieshave on the company as a whole andon its bottom line. As one programparticipant put it, “The class was veryinteresting. It was a real eye-opener.”

“That awareness is going to windup paying us huge dividends,” saysSwift, who adds that the company hasyet to determine the solid, quantitative

Bennett Steel’s fieldsupervisors came away from the programunderstanding the effectthat their individualactivities have on thecompany as a whole andon its bottom line.

“I got so much out of the class that Iwould like to attend another one.”

Bennett Steel employee and Job Profits Program participant


results of the program participation. “As we get the data to support these assumptions, I have no doubt in my mind that we will see those types of results.”

What Swift has seen since the training event is an increase in collaborationand interactivity among field supervisors and their employees as well as betweenthe field supervisors themselves. Whereas in the past, small groups would “huddleup” for meetings and attempt to tackle their tasks at hand, these days BennettSteel’s workers talk more openly about their agendas, bounce ideas off one anotherand elicit valuable feedback in a team-based environment.

“Instead of using the daily huddle exclusively to manage the activities of the day,” Swift explains, “supervisors are out there asking for feedback and talking to employees about issues (both positive and negative) that may have been overlooked. Our field supervisors are also asking workers about what they need to be able to achieve their individual goals while also contributing to the greatergood of the company as a whole.”

For example, Swift says preconstruction or pre-job planning meetings nowinclude in-depth, interactive discussions around the “bell curve” of peak manpowerrates, the need to ramp up human resources and how these two elements relate tothe number of man-hours budgeted for a specific project, or an activity within acertain project. “I’m hearing thingsnow that I wasn’t hearing just a fewmonths ago,” says Swift, “like, ‘I needmore planning time to be able to giveyou an accurate answer,’ or ‘I need toknow what my budgeted hours areand how they’re broken down.’”

Swift says supervisors are alsomaking more suggestions and offeringfeedback that in the past they may havekept to themselves. These days, thosecomments are out in the open and factored into the larger decision-makingprocess. If a field supervisor says heneeds a specific piece of equipment toget the job done, and if Bennett Steel would be better off renting that equipmentrather than using its own resources, the issue now is discussed openly to determinethe best plan of attack.

Finally, Swift says the Job Profits Program experience has also made BennettSteel’s supervisors more cost-conscious. This is a particularly big gain for a firmthat, for the last ⁄ years, has been struggling with tight profit margins. “Ourfield supervisors are more sensitive to the minimal profit margins on our projects,”says Swift. “That’s something that really didn’t click until someone from outside ofthe company explained it to them using quantitative data and examples.”

POSITIVE PROGRAM FEEDBACKAfter sending its project managers, crane supervisor, field supervisors, shop

supervisors, foremen, safety director and controller to the Job Profits Program,Bennett Steel’s leadership team started to listen for feedback on the experience.


Swift says he was pleased to learn that the input was largely positive and that participants admitted that they came away with newfound knowledge that they werenot previously aware of. Comments such as, “The program was very entertainingand informative; I would like to put a twist on some of this for my crane program,”confirmed participants’ enthusiasm to apply new concepts and makechanges. After reviewing the feedback,Swift says he and Bennett zeroed in onseveral common threads. For starters,they learned that their employees didnot realize just how small (less than %percent in most cases) a constructioncompany’s profit margins were.

“Most of our supervisors aretradesmen who don’t necessarilyunderstand how that small profit percentage translates into dollars andcents, particularly when it comes togross profits versus net profits,” saysSwift. “That point was driven homefor our supervisors, and now they have a greater respect for what theprofit margins really are.” From theprogram, supervisors also learned the value of using a score card or other trackingmechanism as they work their way through a project. This level of accountabilityhelps employees understand what their limitations, budget levels and targetedtime frames are on specific projects.

Bennett Steel is developing a formal score-carding process that supervisors use on every project. “Using the score card, supervisors can retrace their steps back through the entire project to see how they’re doing, where they can changetheir strategies, or where they can organize the activities concurrently instead ofconsecutively,” says Swift. “This allows them to take different steps to positivelyimpact project outcomes.”

Swift compares the score-carding initiative to a similar process used in professional sports like baseball, football and soccer — all of which use carefultracking, scoring and reviewing to win games. “You can’t expect the team or thecoaches to perform and win the game if they don’t know where they stand on thescore card,” Swift points out. “And while a basketball team can change the strategyin the game to affect the final score — like playing a strong defense against a slower offense — ultimately, if you don’t have a score card, you’re not going toknow how to change your strategy to play more effectively or win.”

INVESTING IN YOUR HUMAN CAPITALVirtually everyone agrees that investing in employees is an effective growth

strategy and paramount to assuring long-term organizational success. However,when economic times toughen and revenues slow, reducing discretionary expensesto help bolster profit margins (because direct job costs cannot be reduced as easily)

Virtually everyoneagrees that investing in employees is an effective growth strategy and paramountto assuring long-termorganizational success.


becomes common practice. After all, a contractor cannot just decide to erect threewalls instead of four to cut wall-material costs by %. But the builder can reducesome costs, such as training budgets, with no negative impact on the bottom line,right? Wrong.

Contractors cannot reduce costs, such as training, without affecting production,because it lessens the job site manager’s ability to convert raw building materialsand labor into finished products. Using training to increase productivity and addvalue on the job site is vital during tough economic periods. New skills and

knowledge can be acquired throughmultiple avenues, and significant organizational growth occurs whentraining is strategically aligned withbusiness needs. “I have always believedthat training was one of the most valuable ingredients to the recipe forsuccess, and this program (JPP) broughtreal value to my firm in the trainingcategory,” says Bennett.

The Job Profits Program was created to help contractors becomemore competitive and efficient in anenvironment where every dollar andman-minute counts. Ethan Cowles,senior FMI consultant and JPP

instructor, adds, “The Job Profits Program is the first step in bringing awarenessaround productivity and highlights best practices on how to make people in thefield successful and more efficient. The program is not intended to change behaviorovernight, but instead presents an important step towards transforming a corporateculture that integrates both field and office staff in a more collaborative way.”

Kevin J. Hilton, CEO of IMPACT, concludes, “In this hypercompetitivebusiness environment, we have to arm our contractors with every competitiveadvantage that they can get. And that’s why we’re pursuing the Job ProfitsProgram and other programs with FMI, which will help our contractors becomemore competitive and in turn, employ more ironworkers.” �

Sabine Hoover is a senior research consultant with FMI Corporation. She may be reached at 303.398.7238

or via email at [email protected].

Using training toincrease productivityand add value on the jobsite is vital during tougheconomic periods.


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