New report encourages collaboration in the construction industry

A new report by Dodge Data & Analytics suggests risk mitigation can be achieved if proper collaboration strategies are implemented within the industry.
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Improved collaboration is the key to more effective risk management, according to a new Dodge Data & Analytics report, “Managing Risk in the Construction Industry.” Compiling responses from building owners, general contractors (GCs), and trade contractors, the report discusses the popularity and perceived effectiveness of various collaborative risk-mitigation strategies.

“The concept of collaboration and integration is not new and has been around for decades. The difference today is with the preponderance of large-scale mega-projects, this becomes a new reality with much higher stakes for all sides,” says Karen Walsh, senior vice president and regional director of Alliant Insurance Services. “Regardless of the disposition, each party’s risk concentration is exacerbated. Couple this with the emerging and still unknown complications of technological, political, and workplace violence risks, and you have a situation that forces the concept for change for all parties.”

Despite the generally competitive nature of the construction industry—even within project teams—nine in 10 building owners and contractors said they thought collaboration can alleviate future risk, while three-quarters experienced a dispute or claim in the last three years. Of the three types of industry members surveyed, GCs report the highest level of disputes and claims over the past five years.

The report discusses three primary risk mitigation strategies:

  • regular meetings with the full project team;
  • formal brainstorming; and
  • risk-management planning.

These are framed in terms of three tangible benefits:

  • reduced cost;
  • improved scheduling; and
  • improved safety.

A total of 81 percent of all respondents stated they believe labor scarcity will increase project risk, although the areas considered high-risk varied by group. GCs believe labor procurement and subcontract management pose great risk, while owners were most affected by construction defect claims, and trade contractors by warranty issues.

Formal brainstorming emerged as the report’s ‘best’ evaluation strategy, but again, each group offered a different perspective on what the strategy’s most significant attribute was. GCs most appreciated brainstorming’s capacity to heighten project safety and aid scheduling, while trade contractors appreciated its cost reduction effects, and owners found it enhanced the reliability of project performance. Regular meetings with the full project team can also aid in all these areas.

“This study contributes to the growing body of knowledge about the positive impacts of project collaboration, and early collaboration by team members can lead directly to less project risk and crisis—a significant incentive to start working together better, more often,” says Steve Jones, Dodge’s senior director of industry insights.

The full report is now available for download.

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