Acknowledgements
Project Management – From Collaborative
Approach to Project Success
Tony Ma – University of South Australia
Organising Committee
Professional Services Development Assistance Scheme Project on
‘Improving the Competency of Local Project Managers in
Managing Mega Infrastructure and Construction Projects in
Mainland’
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Theme - Novel Project Management
Approaches
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Novel Project – example 2
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Novel Project – example 3
China Central Television (CCTV) Headquarter Building
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Novel Project – example 1
Olympic Stadium - Beijing 2008
What are novel Project Management?
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Dining in the sky
5
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Novel Project – example 4
Novel Project – dining in the sky
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Temptations for Great project
Outcomes
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Project management

Project Management is not a new concept

Project Management emanated from the construction and
military sectors in 1950s but is now an emerging global
‘profession’within government and industries

Individual and corporate organizations around the world
are demanding improved business performance and
consistency in commercial products and services through
the adoption of international best practice in project
management (成效及競爭優勢)
Look for PM skills and aim for Project Success
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Project Life cycle
PM hard skills – PMBOK Guide 2004
Principles of PM:
Integration
Scope
Time
Cost
Quality
Human Resources
Communications
Risk
Procurement
www.mpmm.com/project-management-methodology.php
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Triple Constraints
Project Management
Perspectives
Time/Cost/Quality
目標導向
Project
Management
Target
Scope
Risk
Control
Planning
Organise
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Triple Constraints
Rod Hutchings
Project
Triple Constraints Project Management
Management

The triple constraint involves making tradeoffs
between scope, time and cost for a project.

It is inevitable in a project life cycle that there will be
changes to the scope, time or cost of the project.

However where most projects fail is that when one of
the areas changes and appropriate adjustments are
not made to the other areas.
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
For example, if a deadline is moved up, what
actions are needed with regards to cost or
scope to ensure the deadline is met without
compromising the quality of the product.

Similarly, if there is a change in scope,
corresponding adjustment will be made to
cost and time elements…
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Top Five Characteristics of a Great
Project Manager
Attributes of project Manager
 are strongly committed to a clear mission
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have a long term and big picture perspective
are both systematic and innovative thinkers
find and empower the best people for their teams
are selective in their involvement in project
focus on external stakeholders
thrive on relationship and influence
proactively gather information and insist on results
Project manager success criteria By
Robert Youker
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Interpersonal skills
Organizational skills
Communication skills
Problem-solving skills
Professional training
Soft skills count a lot!
What did general managers do?
Agenda setting – network building
Getting networks to implement agenda
www.synthelinc.com
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Emergence of soft skills
Why this project failed?
The Babel Tower

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the Tower of Babel was
not built because of
confusion of tongues
That is in today’s sense –
no communications!
It equally applies in
today’s Projects.
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

Relationship management skills are vital for
achieving project outcomes that fully address
stakeholder expectations throughout the project
lifecycle (including multicultural environments).
Relationship skills are required to aid the
effective application of hard skills – it is people,
using
knowledge, creativity (and often technology)
that realise projects not techniques or hardware.
Advancing PM in learning organisations,
by Lynda Bourne & Derek Walker 2004
There is more to being a good mega project
manager than technical skills:
 A common failing is that a lot of people
owners will select project managers who have
a very good technical facet for that particular
project… but on large projects the key
attributes are the relationship-building skills
 You have to focus externally and to manage
stakeholders.

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Making IT BIG - The Project
Manager, October/November 2007
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Advocate for collaborative
approach… as the basis
But… my arguments are…
Are we lacking these types of project
managers?
 What are the basis of relationship building?


Unjust enrichment of one party?
Unfair risk allocation?
 Hard money tendering leaving no rooms for
partnering?
 Why recently there is a shift of culture towards
partnering – relationship contracting – alliancing?


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PM for Mega projects – managing
people…
PM – relationship building

With all the focus on project management
techniques, such as planning, scheduling,
cost management, etc., it's easy to forget
that communication is 90% of a project
manager's job. And that includes conflict
management, resolving ethical dilemmas,
team building - all the soft skills that can
make or break projects.
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
“Today there are many different approaches that are applied
to project structures and organisations; from the traditional
lump sum to “partnering” arrangements between the
constructor and client. No matter which structure is adopted,
fundamental issues such as project scope and deliverables
must be agreed. However for a project to be truly successful,
the quality of the people and strength of the relationship is
the key to success. Developing mutual respect and trust, that
enables transparency and information sharing is the
foundation for a successful outcome”.
H M Morgan
Managing Director
WMC Resources Ltd
Relationship Contracting, Australian
Constructors Association, 1999
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Relationship Contracting
RELATIONSHIP
CONTRACTING

What is Relationship
Contracting?

From collaborative approach to project success
A process to establish
and manage the
relationships between
the parties that aims to:
remove barriers;
encourage maximum
contribution; and allow
all parties to achieve
success.
1
Australian Constructors Association
1999
Types of Contracting

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Why Relationship Contracting
Traditional
Project Partnering

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Not Contractual
Working in good faith (shake hand approach)
With common & performance goal, team building

50% Less disputes
50% Lower contract cost growth
1-2% return on investment
Alliance (Strategic, Project)

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Contractual
Work at costs rates
Pain Share / Gain Share (Profit @ risk)
No Blame
National Museum in ACT is an example of alliance
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4
Fundamentals to
Relationship Contracting
1.
2.
3.
4.
5.
6.
2
Form of Contract
Form of Contract
Risk Allocation
Facilitator
Alignment of Goals
Integrated Project Team
Open & Honest Communication

Traditional Contracts
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GC21 (NSW Gov) – lump sum
Tailor traditional contract to overlay elements of
alliance contracting

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5
AS 2124 - 1992
AS 4000 – 1997
Pre Payment
Incentives
No Liquidated Damages
Legal advice
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Risk Allocation

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Facilitator
Establish the project risk
Establish responsibility for managing these risks
(most appropriate party-risk embrace)
Traditionally as much risk is transferred to others by
the client
Traditional approach often fails, creating:
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Relationship Contracting requires a substantial
change in behaviour
Facilitator has no ties with any company
Facilitator assists to


an adversarial climate
a high level of commercial disputation
time and cost overruns and
overall poor performance

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Liaise with key sub contractors
Provide the team with a common set of skills

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Build best practice behaviours
Develop an environment of trust, co-operation and open
communication
Develop the goal of achieving excellent results and
Maintain a focus on common project goals and the team
Problem solving
Negotiation and conflict management
Communication
Alignment of Goals
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Integrated Project Team
Startup workshop
 Aligning all individual goals to establish
common goals for the project
 Review goals periodically
 Alignment will take place if all parties share
risk including client
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Established at the start of project
Comprises senior members from each of the parties
including client
IPT has responsibility of decision making
Training by facilitator is essential

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Members must put best interests of project ahead of self
centered gains
KPI’s
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Open & Honest
Communication
Benefits of Relationship
Contracting
Need a change in habits
Need to make all member feel that they are a
part of the project (project celebration
milestones)
 Provide a facilitator for members to talk
discuss issues with
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Time
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Cost
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Optimum life cycle costs
Reduced capital expenditure
Improved operating performance
Ability to influence costs early without penalty
Risks
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Certainty of project time
Reduced project delivery time
Better management of inherent risks
Clearly defined risk allocation/sharing at outset
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Benefits of Relationship
Contracting

Relationships
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Enhanced relationships
establishment & achievement of common goals
Improved behaviour of the parties to the Contract (No
Blame)
Flexibility

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The need for radical changes
Increased flexibility to match changing project
requirements
Cost of change curve will be flatter
Technology/Innovation

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Greater incentive to be innovative
Greater incentive to apply latest technology
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The need for radical change
The National Museum of Australia
Alliancing Contract August 1998 – March 2001
http://www.nma.gov.au
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Conclusion
Convention Centre - Adelaide
Relationship Contracting focuses on
finding solutions to problems, rather
than adversity and litigation
 Investing time and energy at the
beginning of the project will significantly
reduce the likelihood of difficult and
problematic situations

Alliance Contracting - May 1999 – August 2001
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Lyell McEwin Hospital
Redevelopment Stage A
Relationship approach – case
study

A $91.2M redevelopment involving
35,000 sqm of new hospital facilities on
an existing hospital campus. This project
incorporated replacement of all core
hospital functions including operating
theatres, emergency department, medical
imaging and hospital infrastructure.
Lyell McEwin Hospital Redevelopment Stage A
by Cheesman Architects + Silver Thomas Hanley Perth in Association
South Australia
1
Lyell McEwin Hospital
Redevelopment Stage A

2
Redevelopment
This project has been recognised locally
and nationally for its design, construction
and procurement excellence and has set
new standards in low energy and
sustainable design principles for health
buildings in South Australia.

Prior to the redevelopment, the hospital facility
comprises a range of buildings with almost 50% of
existing floor space greater than 40 years old.
These areas of LMHS were not functional as they
no longer met health service requirements which
are the main reasons for this redevelopment.

LMHS Stage A redevelopment divided into two
sub-stages compromising construction of two
wards, Coronary Care Unit, the new Women’s
Health Centre and Intensive Care Unit, High
Dependency Unit and operating theatres.
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Redevelopment

4
Project Team
The redevelopment replaced
approximately 80% of the existing
hospitals facilities. For this reason, key
issues such as vibration, noise and
environmental as well as industrial
relations have been considered in order
to maintain full operational capacity
during the construction process.
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NWAHS, end user
SAHC (SA Health Commission), principal
DAIS, risk manager
Planning Specialists, health planner
Cheesman Architects, architect
Silver Thomas Hanley, hospital consultant
Hansen Yuncken, managing contractor
Rider Hunt, cost manager
Landscape Architects, landscape consultant
Wallbridge & Gilbert, structural engineer
Bassett, acoustic engineer
Bestec, services engineer
Redback Procurement, FFE procurement consultant
JMJ Associates, alliance consultant
6
Government Initiation


Alliance Consultant
DAIS, the project Superintendent and the
risk manager, has advised the clients to use
Managing Contractor approach in this
project along with New South Wales C21
form of Contract (amended) in which they
believed that NSW C21 Contract has a
strong emphasis on cooperative contracting
and delivery of broad project objectives and
outcomes.
http://www.construction.nsw.gov.au/GC21/i
ndex.html
JMJ Associates was appointed by the
Principal as Alliance Consultant in which
JMJ was responsible for advising the
Principal and the Managing Contractor in
selecting the team members and the
subcontractors.
 Formation of ELT (Executive Leadership
Team) and IMT (Integrated Management
Team)

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Formation of ELT & IMT
Setting of Project objectives
The members of ELT were the senior
executive from the Project Team
 The members of IMT were the managers
for the project.
 Alliance Consultant provided training to
ELT and IMT level as well as explained
the relationship process at a
subcontractor and site work level.

Achievement of Budget
Environmentally Sustainable Development
(ESD)
 Training
 Community Relations
 Program of Work


… and by means of series of relationship
building workshops
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10
Dispute free mechanism
Principal’
Principal’s contingency

Partnering workshops
No liquidated damages for delay in late
completion by the Managing Contractor
and the subcontractors
 Principal’s contingency
 Project contingency
 Incentive fund

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
Additional scope of work
Under-budget
 Principal causing delay
 Resolving construction problems created
by unforeseen circumstances
 Additional design fees
 Additional FFE
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Project contingency
Incentive Fund
Errors and omissions
 variations
 Latent conditions
 Acceleration

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The two contingency funds can be
negotiated for specific use, in case of need.
if upon Completion there was an amount
in the Incentive Fund and the Contract
Price is no more than the sum of the
Target Construction Sum and the
Contingency and when there is no Defect
Notice outstanding, then the Incentive
Fund is to be distributed by the
Principal...
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Incentive Fund

60% is payable as recognition of the achievement
of outstanding value

40% is payable if the Principal determines in
accordance with the agreed performance
measurement that thr ee out of the following
four results are achieved:
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Incentive fund

Any amount that is payable under this
clause must be paid to the following
recipients in the following proportions:
Hansen Yuncken
Cheesman
 Rider Hunt
 Bestec
 Wallbridge & Gilbert



◦ An outstanding ESD result
◦ An outstanding Community Relations result
◦ An outstanding Training result
◦ An outstanding Program result
xx%
xx%
x%
x%
x%
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Progress

In February 2003, the Project Team has
successfully implemented construction
savings from sub-stage Part 1 whilst still
achieving excellent outcomes for ESD,
community relations, training and progress.

The incentive fund members were proud of
their achievements for this project, thus,
they have used their incentive fund as a
donation to support the unmet FFE
requirements.
16
Collaborative incentives

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The efforts made by both Principal and
incentive fund members team have
developed a set of core values such as
commitment, trust, respect, fairness and
honest between themselves where the
Project Team can maximise the
opportunities for continuance of the
process into future stages of LMHS
redevelopment.
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Support tools


Project outcomes
Meetings were organised to identify the risks and
strategies were developed so that the issues can be
solved as soon as possible. Any issues that cannot
be resolved by IMT will be directed to ELT
immediately in order to prevent any delays due to
that cause.

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To enhance communications, Aconex, a web
based documentation and communication tool, has
been adopted in the early stages of the project for
all consultants, builders and subcontractors to
manage all documents, mail and some tenders.
Commencement date: 8th of October 2001
Original completion date: 26th August 2004
Due to delays for latent conditions,
inclement weather, industrial action and
client related issues, target completion of
the building works for LMHS project was
adjusted and to be completed on 26th of
August 2005, while the final approved
date for Completion is on 9th of June
2005.
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Points to consider…
consider…
Possible barriers
Relationship approach requires a cultural
change in project environment.
 Senior bureaucrats & members of the
government were cynical about the ‘no
blame’approach.
 JMJ, a specialist consultant was appointed
to offer a relationship training.
 Defects free completion – achievable?
 Next generation project management… ?

Based on a recent survey (22 respondents) , the
following are identified:
1. Inconsistent staff performance & morale
2. Uncommitted funding
3. Performance measurement - KPI
4. Organisational culture towards ‘no blame’
concept
5. Government constraints & bureaucracy

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