Tim East, Director of Risk Management at The Walt Disney Company, closed the 2017 IRMI Construction Risk Conference with a discussion on relationships between risk managers and contractors, and managing project risks.
East’s presentation, “Aligning Owner and Contractor Interests” elaborated on a central idea about how the best outcome of a construction project occurs when there is a shared vision between these two groups of owners and contractors.
In this session, East shared his perspective on how to overcome differences so owners and contractors can align their interests on quality, schedule, price, safety, risk allocation, and other goals to ensure the best project outcome.
As the construction industry faces mounting pressure to complete projects “ahead of schedule and under budget,” East said in order to meet those demands while ensuring safety for their workers, creating a shared vision is more important than ever.
“One of the greatest challenges is this increasing pace of construction in the U.S.,” he said. “The compression of the project development schedule means we have to be talking earlier and more clearly to one another.”
Creating a shared vision
To make this partnership possible, East told the audience there are three important steps to take on the part of the risk manager to create a shared vision with contractors before beginning any construction project.
The first is to establish clear expectations and objectives. Anticipate and define the key risks before beginning a project, and be engaged during pre-construction planning.
The second step is to establish structure; define the insurance risk management and safety programs before construction begins.
Lastly, communication is the most critical component in successfully creating a shared vision. “If you communicate clearly your demands and expectations in advance,” East said, “then contractors are able to rationally incorporate that into their plans.”
Elaborating on these points, East discussed obstacles (not risks) that risk managers may face when creating a risk management plan on a job site of any size and in any location.
First, East said it’s important to recognize any local and regional differences that could affect your project and your relationships. The risk manager elaborated his point by citing personal experiences working on construction projects at Disneyland in Tokyo. It was there, he said, that he learned the importance of building relationships face to face, and how being inattentive to cultural differences could have damaging effects on work relationships.
Additionally, East said to know the regulatory requirements and economic constraints, and establish clear safety rules and procedures before beginning any construction project.
(Photo: Danielle Ling)
Align project interests
Elaborating more on the main mission of his presentation, East detailed six key principles of owner and contractor alignment.
First: establish trust and build relationships early in the project. “Be visible on the construction site. You only build relationships, I believe, face to face,” said East.
Second: set expectations clearly from the start of the project.
Third: define safety requirements. Integrate the insurance safety programs.
Fourth: measure what counts: upstream and outcomes.
Fifth: stop demanding, and start asking for commitments. Seek and make more reliable promises.
Sixth: solve problems and create a resolution environment.
East wrapped up his remarks with a review of the sessions key lessons. “Problems are solved person-to-person,” he said. “Build stronger relationships between risk managers and contractors earlier on in the project.”
Adding to this point, East encouraged the audience to make more phone calls and prioritize face-to-face interaction over emails and text messages.
As he concluded the session and the end of the 2017 IRMI Construction Risk Conference, East ended with a story about his company’s founder and namesake, Walt Disney.
Long before the original Imagineer created the world of Disney, East related, Walt Disney dedicated every Sunday to time spent with his daughters. In allotting this sacred time with his family each week, Disney had a vision that there ought to be a special place where parents can go with their children and create lifelong memories.
Building the Disney empire left an extraordinary imprint on the world, and East said each project contractors build has the potential to have a similar effect.
“What we build tells a story about who we are,” East explained, “and sends a message about the kind of world we want to create.
"I’d like to encourage all of you as you are building the future of our society, that you, in the same way, is telling a story," he added. "You are building cathedrals, not just laying bricks.”