Successful Alliance Contracting: The Behaviours At The Heart Of This Collaborative Approach to Project Delivery

Alliance contracting is an increasingly utilised collaborative project delivery method that brings together the owner, contractor, and other key stakeholders to work together as a team to achieve common goals. It is particularly useful in large, complex projects with higher risk and some unknowns remaining. Good alliance contracting enables reduced costs, higher quality, increased efficiency and better stakeholder engagement and has been used successfully on several Australian infrastructure and transport projects, including the Sydney Metro Northwest, the Melbourne Metro Tunnel, and the Brisbane Cross River Rail.

Could it be this simple to deliver complex projects on time, on budget, and to a high-quality standard? Well, yes and no.

The written contract is, of course, important, but the most challenging element of Alliance Contracting is people, and any approach dependent on how people choose to behave is never simple.

The good news is that Alliance Contracting can deliver better outcomes than more traditional Fixed Price, Cost-Plus or Time & Materials contracts, provided the combined team commits to developing the required positive behaviour attributes.

• Trust:?Parties to an alliance must be able to trust each other to act in good faith and put the project's interests first. Establishing trust requires a willingness to share information and be transparent about decision-making.
• Communication:?Effective communication is essential for the smooth running of any project, but it is even more critical in an alliance setting. Parties must be able to communicate openly and honestly with each other well ahead of problems arising and be willing to listen to each other's concerns.
• Collaboration: Parties must be willing to collaborate and work together towards common goals. This means sharing ideas and resources and compromising when necessary.
• Agility:?Alliances are complex and dynamic environments, so parties must be agile and adapt to changing circumstances. This requires a willingness to think creatively and remain open to new ideas.

Decades of research into teams shows that simply bringing people together and describing how they need to behave to succeed will not enable them to develop an effective team culture characterised by high-trust, effective communication, collaboration, and agility.

Tuckman's Five Stages of Group Development approach is a great way to help alliance teams understand what they will go through and how to achieve high performance.??

According to this well-tested model, after forming, all teams enter a storming phase where issues of real consequence are debated, and ideas are contested. Teams can easily get stuck in this phase, eroding their ability to deliver against targets and outcomes. The difference between a team that moves on and one that does not is often the effort and attention paid to forming in the first place. If forming is done well, the chances of moving through the low-performance storming stage, into the higher-performance norming stage and on to a high-performing team will be significantly increased.

So, what do alliance teams need to do to form effectively? These four key focus areas can help.

Understanding the individual and the team dynamic.?We all have unique thinking, problem-solving, and communication styles. Having a range of these styles brings great strength to a team, but without a solid understanding of people's different perspectives, there will be friction. Appropriate diagnostic tools and associated activities will ensure that the team can appreciate each other's styles and work with each other more effectively.

Building a high level of trust and psychological safety.?Exposing a team to the building blocks of a high-trust environment (the presence of credibility, reliability and intimacy, and the absence of self-orientation), the characteristics of a psychologically safe environment, and how to self-audit against them is the first stage in delivering such a culture. Teams need to know what good trust looks and feels like before they can strive to achieve it.

Agreeing on the right behaviours. Once a team knows what good looks like, it is vital to have an executable agreement on how this will manifest daily. This agreement can take the form of a team charter, but it is essential to remember that producing a document, poster, or mouse mat with clever words is not the same as changing behaviour. The way leaders walk the talk, along with acknowledgement and celebration of enabling behaviours, matters. If agreed behavioural norms are only used as a whipping stick when someone steps out of line, their ability to appropriately guide the alliance team will diminish. Also, the team needs to regularly revisit and assess how it is tracking against agreed behavioural norms to ensure members don't slip back into bad habits - particularly when delivery pressure is most acute.

Continued focus.?Team-forming activities can bring energy and positivity to a team, and then members walk out of the room to get on with perceived?real life. Too often, teams assume setup activities will be enough to deliver change. This assumption is incorrect, and teams must regularly come together to review how they are actually behaving, investigate blockers, celebrate successes and decide the next steps if they are really to maintain a robust enabling alliance culture.

Leadership, leadership and leadership.?How leaders choose to behave can make or break alliance contract team effectiveness. No matter how positively the wider team leans into an alliance, key leaders must demonstrate best practices to maintain the chances of success. Leaders must be comfortable adapting to an environment where they share control and are open with information.

Alliance Contracting can be a highly effective approach that can deliver significant benefits in large, complex contracting situations. However, it is not a silver bullet. Unless bid and delivery teams are supported through appropriate development and coached to create authentic, collaborative, agile contract cultures, the alliance contract experience can be a rough ride.

nXus People has considerable experience enabling teams to become highly effective and maintain great cultures. We also have a deep knowledge of bid-team and contracting environments. If this article interests you and you want to know more, please get in touch.