A Roomful of Elephants
In the last couple of weeks our industry has seen examples of the good, the bad, and the ugly.
1.) Good: The St. Louis Council of Construction Consumers held a workshop on “Partnering: Best Practice from the Construction Industry Institute and Practical Industry Applications.” It included successful partnering applications here, a partnering expert from Norway communicating by Skype regarding his experience in the North Sea oil industry, and a consultant to DuPont telling of how owners and contractors from around the globe have collaborated for over 20 years.
2.) Bad: A union bannered the jobsites of a $755-million-dollar contractor over a couple hundred thousand dollars worth of fringes. The contractor responded by firing all the subcontractors who employed members of that union.
3.) Ugly: A minority inclusion activist fired off an email that urged a boycott of a GC in colorful terms, the most printable of which is “Uncle Tom.”
During that same two-week period I was involved in a series of meetings with a number of industry leaders to discuss the concept for a St. Louis Construction Leadership Forum – an idea I proposed late last year after almost a year of legwork. While there has been broad support for the idea, there has also been the concern that this concept would duplicate the efforts of some our industry’s existing efforts, such as PRIDE’s in the labor area, or SLCCC’s in education.
One of the leaders that I met with recently suggested that I needed to revisit the column that I wrote proposing the forum: ( http://www.stlouiscnr.com/columns/article/we_need_a_construction_leadership_forum/ ).
I thought about what the purposes of the forum would be, and I realized that I could boil it down to a single phrase: “To point out the elephants in the room.”
Here is what I would see as being the deliverables of the forum:
Deliverable: A candid assessment of the competitive effect of labor issues that can be used in resolving conflicts and/or moving contractors and owners in a direction that will allow St. Louis to develop more work.
• Mirror: Cut through the politics and rhetoric and compare St. Louis with other union areas and merit shop areas of similar size and composition. Qualify this assessment by including all of the various impacts – job creation, economic, political, etc. – in making these comparisons.
• Data Collection: Assemble and compare information from industry analysts, unions, associations, and real estate analysts regarding labor issues and labor costs, locally, regionally, and nationally. This data collection could involve the university construction programs in conducting primary research on construction users, contractors, and owners.
• Taking the Broad View: Develop a far-reaching, no-holds-barred consensus, on the order of the Construction Users Round Table’s groundbreaking 1983 industry report “More Construction for the Money.”
Project Award Environment
Deliverable: A clear picture of the current bid environment, a prediction of the short- and long-term effects of current practices and a yardstick for owners to use in determining their procurement practices.
• Mirror: Look at the project procurement methods in St. Louis now and prior to the recession. Compare to other areas of the country. Compare to other models for procurement.
• Data Collection: Gather primary research on bid margins, number of bidders on lists, numbers of change orders. Build a model of how construction is being bought – select lists, large lists, open bid, reverse blind auction. Collect information on contractor failures and changes in market focus due to recession. Engage large buyers of construction who are using strategic sourcing models for information about how they arrived at their current systems and how those systems are evolving.
• Taking the Broad View: Combining research on IPD, LEAN construction, case studies, etc. with the primary research and present the case for the “best” ways to procure construction in this market.
Deliverable: A balanced look at what non-intersecting and overlapping governmental agencies add to the cost of construction here. A look at how the government picture affects what gets built here. Suggestions for streamlining the interface of the construction process with government.
• Mirror: Look at other metro areas of similar size and composition – both with similar political infrastructures and streamlined structures.
• Data Collection: Gather primary research on costs to construction and development in terms of fees, delays, and conflicts. Gather primary and secondary research on how the political environment affects what gets built here.
• Taking the Broad View: Develop some short- and long-term suggestions that improve the interaction between contractors, developers, owners and governmental agencies. Produce tools that might be used in communicating to the general public the cost in terms of business development and job loss of the current political environment.
Deliverable: A realistic statement of what is possible now, what could be possible, and what it will take to get there .
• Mirror: Compare this metro area with other metro areas of similar size and composition in terms of what has been accomplished in terms of construction inclusion. Talk with national buyers of construction about how much the diversity issue affects the decision to build here.
• Data Collection: Use the AGC diversity study as a jumping-off place. Conduct primary research with owners about what their commitment to diversity is. Conduct research with contractors about the state of their diversity efforts. Collect secondary data about the impact of an area’s diversity on facility location decisions.
• Taking the Broad View: Strip diversity of the “it’s the right thing,” or “it’s a farce” rhetoric and present some steps that might improve the situation short- and long-term.
Individuals who I consider to be true leaders representing St. Louis owner, contractor, labor, design, supply, and higher education organizations have expressed strong interest in this concept. This Leadership Forum is not about forming an organization, or an association, or holding one more meeting for already-busy people. It’s about holding up a mirror that let’s each of us see ourselves clearly. And if we look in that mirror impartially, over our shoulder we’ll also see all the elephants in the room.