Top 10 tips for creating a successful alliance

Richard Morwood, Industry Director - Integrated Project Delivery, AECOM and co-author of the book 'Alliancing -  A Participants Guide' gives his top 10 "thinks" for getting the best out of a project alliance

1. Get the governance structure right

Making sure the right parties are at the ‘top table’ is fundamental. Consider which parties are able to contribute intellectual property in managing towards excellent outcomes and constraining risk. For infrastructure projects this will typically involve the owners, designers and lead constructors, but might also include a key supplier or even a lead insurer depending on the nature of the complexity.

2. Ensure that leaders lead.

In an alliance, a board isn’t just there to ensure governance and compliance procedures are effective. The participants must lead. Not only must they set an example in putting the interests of the alliance ahead of their own organisations’, but they must use their own skill set to champion a particular key result area (KRA).  KRAs may include ‘safety’, ‘value for money”, ‘waste elimination’ or ‘systems integration’.

3. Make sure legal and commercial frameworks support the level of integration needed.

Clarity of outcome desired by the owner and aligning legal and commercial models with this is vital. In Australia, most alliances have a ‘no blame’ clause forcing integrated behaviours to resolve issues. This has been picked up in the USA, but is often the hurdle that lawyers struggle with. In the USA I saw an article proclaiming that ‘no blame’ clauses weren’t effective because they hadn’t been tested in the courts!

4. Role clarity and accountability are required to ensure efficiency of delivery

One of our major program collaborative contracts for a $1bn flood reconstruction program almost ground to a halt because everybody was trying too hard to do everything. Thankfully we realised there was an issue and rectified the situation. Once role clarity is provided in an integrated team, accountability for performance is much easier to manage, wasted effort and rework eliminated, and innovation can flourish.

5. Keep the drivers and messaging simple.

People can’t respond to too many messages and drivers at once. Three is usually optimal. Where a client introduces 12 KRAs a good question to ask is:  ‘What is particularly important for this project?’ After some serious contemplation often this can be whittled down. The real point of these is to drive behavioural change. There’s little benefit if KRAs overload or confuse people.

6. Drive innovation back into the participant organisations.

Often the fertile environment of the integrated team will develop new ways of doing things (for example,  better integration of BIM, or new understandings of subcontractors business models and skill sets). Look for opportunities for these to be taken back into other forms of contract within the participant organisations. Then careers get enhanced, competitive edges honed and others wonder at the innovation of the team.

7. Capture innovation and lessons learnt and demonstration of value

Alliancing/collaborative contracting is relatively new (again). There’s real benefit in capturing innovation and lessons learnt in order to demonstrate the value in the model. As alliances matured in Australia, demonstrating value became mandated as a progressive process throughout the life of the alliance. Reporting using a tool like an innovation register at board level is a vital part of this development.

8. Balance Risk and Insurance

Risks tend to end up in a bucket of managed and unknown risks with contingency allocated, or a bucket called insurable risk with potential deductibles and premiums to pay. All actually come at a cost and the best strategy is obviously to design out the risk whether insured or not. Consider them all in the same bucket and look at how the management processes can be matched to the type of insurance being used.

9. Monitor performance in terms of project outcomes and culture achieved

Don’t leave alliance culture to chance. When you think about it, you want to rapidly develop an integrated culture that feels like it’s been operating that way for years. We will often institute a High Performance Management (HPM) Plan that includes strategies, processes, tools and techniques aimed at building and accelerating positive team processes, behaviours and outcomes that will amplify the project’s results.

10. Have Fun.

Complete focus on the project outcome in a fully integrated team can sometimes lead to an intense work environment that leads to some people working to an unsustainable level. Be aware of this and use circuit breakers to relieve the load. The benefits get paid back many times over. In addition infrastructure projects and technical careers are seen to be desirable places to work

  • A more extensive article will appear in Infrastructure Intelligence magazine later this month.

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