Well, what do you know? The risk of finding out too late what actually happened on your project.

In construction, there is often a knowledge gap between decision-makers and folks on the ground. Bridging that knowledge gap is crucial for healthy projects, and to avoid surprises.

The full picture is not always reported

On-site teams are closest to the detail, but may not always give accurate reports to their managers about bad news. Those managers may then, in turn, massage information before reporting it further up the chain.

The reasons can vary:

• Limited perspective: People focused on particular parts of the project may not be able to perceive the wider picture, and the true cause of delays and cost overruns.
• The blame game: It is often human nature to blame others, particularly if someone’s own job or career advancement might be at risk.
• Strained interpersonal relationships: Relationships between engineers, owners, contractors, and subcontractors can get heated amidst the time and cost pressures on a project, which can compromise impartiality.
• Fading memories: The further back an event happened, the less accurately it may be remembered. Worse still, the people who were involved may have left entirely.

This concept of ‘distortion in negative upward communication’ is not a new or limited to construction. However, it poses risks to project owners, contractors, and subcontractors alike.

Rubbish in, rubbish out

If the underlying information is inaccurate or incomplete then this can skew the decision-makers’ resulting understanding of the problem and its causes.

When combined with a human tendency to hear what we want to hear, particularly if hearing that costs and delays are someone else’s fault and might be recoverable, this can be a recipe for bad decisions. Decision-makers may then action those decisions with misplaced confidence.

A contractor may bring inaccurate claims for variations or extensions of time, or a principal may vehemently deny legitimate claims, and each of the decision-makers may strongly believe that they are in the right based on what they ‘know’.

This can swiftly cause personal relationships on a project relationships to deteriorate: if you ‘know’ something is true, then the assumption will be that someone asserting the contrary must be dishonest. Such assumptions can further impede communications, and lead to yet further delay and cost.

When the facts come crawling out of the woodwork, it can be too late

Formal dispute resolution processes are designed to test whether allegations can be substantiated by evidence. It is not uncommon for that process to lead to unpleasant discoveries for a party: there may be no credible first-hand evidence to support an allegation, or records may be found that contradict what a party thought was true.

A lack of first-hand information can be fatal to credibility with counterparties, and with the courts. In Thomas Barnes & Sons PLC v Blackburn with Darwen Borough Council the Court gave a scathing assessment of the decision-makers’ witness evidence:

None of them had much, if any, direct involvement with the project at site level and, thus, much of the detail of their evidence was second hand commentary anyway.

Get the facts

To bridge the knowledge gap, and reduce the risk of reliance on skewed information, decision-makers must prioritise gathering impartial and objective evidence from the outset of a project:

• Impartial site records: Technologies such as site cameras, entry and exit records, drone footage, and digital time lapse systems can provide an unbiased record of progress.
• Daily logs: A standardised daily log, supported by photos, can answer the question: “what happened that day?”.
• Independent checks: Having an independent specialist, preferably someone respected by all parties, occasionally sense-check critical project documents like the programme can help parties identify potential problems before they become critical path delays.
• Regular discussions: Conversations may reveal issues far earlier than formal notices. Talking with folks on the ground, and regular discussions with counterparts, can keep you up-to-speed with project context, provide early warnings of potential issues, and may enable potential problems to be averted.

Maintaining such habits throughout the project (not just when a dispute arises), and connecting decision-makers with the realities of what is happening on site, reduces the risk of reliance on potentially incorrect or incomplete information.

This, in turn, helps identify the root causes of issues, and facilitates more effective dialogue and issue resolution. Ultimately, this helps keep folks honest and reduces the risk of disputes.

Check the facts

If cost overruns and delays arise and a dispute appears on the horizon, the challenge then lies in distinguishing between objective facts and subjective interpretations.

• Test your knowledge: What do you actually know and how do you know it? Consider known knowns, known unknowns, and unknown unknowns.
• Ask hard questions: Investigate with your team how your own team or consultants might have contributed to the issues. However, do this verbally or seek legal advice on how to ensure that potentially compromising answers are covered by privilege.
• Seek the other side’s perspective: It’s often best to know what the other side thinks sooner rather than later. Verbal answers are often more candid than written notices and letters. Ask for key documents that might help you to understand their position.
• Check the records: Strong opinions may not be backed up by the evidence. Seek copies of contemporaneous documents that might show what actually happened: e.g. minutes, photos, videos, emails, texts, even hand written notes.
• Seek independent assessments: Seek opinions from engineers, quantity surveyors, or programmers who were not responsible for the work itself. Again, consider legal advice on how to ensure that potentially compromising findings are covered by privilege.

Want to know more?

If you have any questions about project management, please contact our specialist Construction Team.

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