Procurement

RELATIONSHIP MANAGEMENT - DRAWING ON INTERNATIONAL EXPERIENCES

Fiona Y.K. Cheung 1 and Steve Rowlinson 2

1 Faculty of Built Environment and Engineering, Queensland University of Technology, Brisbane, Australia, y.cheung@qut.edu.au

2Department of Real Estate and Construction, The University of Hong Kong, Hong Kong, steverowlinson@hku.hk

Accounts of the development of a successful construction project often stress the importance of team relationship, project environment and senior management commitment. Numbers of studies carried out in the past decades indicate there needs to be a change of culture and attitude in the construction industry. In order for a turn around in the industry, relationship management approaches have become more popular in recent years. However, not all relational projects were successful. This paper details the fundamental principles of relationship management. It further reports findings of a research currently taking place in Australia, how effective is relationship management in practice. The problem addressed in this research is the implementation of relationship management: (a) throughout a range of projects, (b) with a focus on client body staff. The context within which the research was undertaken is: (a) empowerment, regional development and promotion of a sustainable industry, (b) the participating organisations have experience of partnering and alliancing, (c) success has been proven on large projects but performance is variable, (d) need has been identified to examine skill sets needed for successful partnering/alliancing. The practical rationale behind this research is that: (i) partnering and alliancing require a change of mind set - a culture change, (ii) the Client side must change along with contracting side, (iii) a fit is required between organisation structure and organisation culture. The rationale behind this project has been to conduct research within participating organisations, analyse, rationalise and generalise results and then move on to produce generic deliverables and "participating organisation specific" deliverables. This paper sets out the work so far, the links between the various elements and a plan for turning the research output into industry deliverables.

INTRODUCTION

In today's world with increasing emphasis on value, performance and probity, old systems of procuring construction - which are adversarial and rooted in conflict - are no longer acceptable, and a new approach based upon relationship management is becoming increasing popular and successful. This research project is investigating how culture change can be managed in such a situation.

THE CALL FOR CHANGE

Successful implementation of relationship management requires strong commitment and continuous understanding at all levels. The trend towards consideration of non-price criteria and the advent of relationship management and alliance-type contracts has encouraged increased focus on the collaborative elements of project team management.

Industry accepts that a cultural shift is required to maximise the outcomes from such projects. However fostering the right culture is not a challenge for the project team alone. The client organisation must also develop an appropriate culture to be able to propose and manage relationship contracts. Both government and industry have identified needs for "revaluing construction" and engineering a better process and procedures in order to deliver value to all participants and stakeholders. Continuous, open and honest communication is the key to the success of this process, moving away from adversarial approaches towards a more cooperative and collaborative environment. Having identified the significance of the issue on a global scale, this CRC for Construction Innovation research project is investing Value in Project Delivery Systems: Facilitating a Change in Culture.

PARTNERING, ALLIANCING AND RELATIONSHIP MANAGEMENT - CULTURE CHANGE

Partnering, alliancing and relationship management require a change of mind set - a culture change - and the client side must change along with the contracting side. A fit is required between organisational structure and culture. Relationship contracting has the potential benefits of achieving stakeholder empowerment, facilitating regional development and delivering a sustainable industry. A change based on a sound understanding of underlying culture and attitudes is required for successful implementation of relationship management approaches. The change must be directed towards developing attitudes and a culture that are supportive of relationship management.

Figure 1: Change of "mind set"

RESEARCH OUTCOMES

To assist the move away from traditional adversarial approaches to contract administration, towards a more collaborative cooperative working environment, this research provides a solid foundation on better understanding of team and organisational culture. Based on the research findings, a process for selection of a collaborative team to fit with an appropriate contract strategy is currently under development. Having selected the right team members and established a relationship management process in the project team, to maintain relationship management throughout the project, this project also develops a set of roles, procedures and protocols is developed to assist the management. This project is aimed at triggering a change of "mind set", a change of culture in the built environment sector, with Australia as the starting point. Such change does not limit to the project delivery team only, but the client side must also change along with the contractor side. In order to apply relationship management effectively, there needs to be an industry-wide education and training initiative. A relationship management unit for continuous professional development is currently being developed; results generated from the research will also be used in university courses, establishing a strong collaboration between the three parties - industry, university/institutions and client organisation. The research is aiming to trigger a change of attitude; a change of culture.

Figure 2: Research outcomes

RESEARCH FINDINGS

Relationship management is multi-layered. In Australia there are four levels at which relationship management needs to operate in a project:

 At