Who Pays for Snow Clearance ?
Imagine this: Your company, Workerbee Inc, is the construction contractor on a major capital project, the White Hills mine. It is owned by a major mining company, Big Kahuna. Your project is in the Canadian North, where winters are long and cold. You are the project manager for Workerbee on the White Hills project.
You receive a phone call at 4 AM on a January morning. “We’ve had a major dump of snow at the site,” you’re told by your operations manager. “The problem is the snow removal company is a no-show this morning and we’ve got 30 centimeters of the white stuff preventing the crews from getting to the site and it’s still coming down. What should I do, boss?”
Your instinct is to say “Call the Project Director for White Hills at Big Kahuna and get him to do something about this. The snow removal contract is with them, not us.”
Your second thought, the one you go with, is “Get some equipment together and get to clearing the snow. Our crews need to get on site or we’ll be behind on the deliverables for the week and we can’t afford to wait.” Later in the day you clear the course of action with the project director from Big Kahuna. Production goes on and you’re making the progress you need to against plan.
But We Kept The Project Team Moving
A month later your project accountant comes to your door. “That snow clearing we did for the project a few weeks ago? Do you know how much it cost us? I’ll tell you – $9,000. We had a crew working on it for 10 hours because of the blizzard. We didn’t have enough equipment and we had to rent some. How do we bill the client for the work as it’s out of scope for us?”
The answer to this question depends on what sort of agreement you have set up with the client, Big Kahuna. If your project is like many, you may struggle to get payment – you may run into objections based on the fact that this was not your role to fulfil. There was a snow clearance contract with someone else and the client should have dealt with them (even if it meant a slow down at the site).
Alternatively, you may have run into few problems because this type of eventuality had been anticipated and a course of action determined long before the snow fell.
Probably your agreement is based on the spirit of understanding and cooperation and anticipates this kind of eventuality. Perhaps you and your client have already determined a course of action for these kinds of issues.
Our research at Big Tree Strategies, shows that stand out projects are set up using interest based agreements. Once in place these agreements allow for greater success in settling disputes of the type outlined above.
Interest-based Agreements
Getting to Yes, the best seller book based on the Harvard Negotiation Project, lays out the two paths that are possible in setting up (and managing) agreements:
| Positional Bargaining | Interest-based Bargaining |
| We are adversaries | We are joint problem-solvers |
| We seek victory (over you) | We seek agreement (together) |
| We want concessions | We want to work together to agree who gets what |
| We dig in to our position | We dig out to find shared interests |
| We mislead | We are open and use principles |
| We insist on our position | We insist on objective criteria |
| We use pressure | We use reason and yield to principle, not pressure |
| We want to win | We want win-win |
If your White Hills project was set up using an interests-based approach, you and the project director from Big Kahuna would already have the principles in place that would guide an out-of-scope activity; the conversation would be about how to accommodate the snow clearing activity which was undertaken to keep the project on time.
In the absence of these principles and agreements, the conversation could quickly disintegrate into a finger pointing, recriminations and a lack of payment for the doing the right thing for the project.
So, how are you and your team doing in managing to principles and not positions?
- Do you have agreements set up that are principles-based?
- Does everyone always keep their eye on the long game (i.e. accomplishing the business goals)?
- Do positional behaviours get dealt with immediately so that all parties can find a win?
Find ways to reset the conversation. Seek principles you can agree on and insist on using them in solving problems and disputes.
Big Tree Strategies is a consulting firm for senior executives in charge of teams managing large projects that are critical to their organization’s success. We provide a consistent, coachable and repeatable program that teams learn and apply as they do their work.
Drop us a line or give us a call if there may be an area on your large capital project team that needs some help. In the meantime, sign up for our newsletter, you’ll find monthly tips applicable to the challenges faced on large project teams.
