March 22, 2021 Dispute Resolver

Avoiding Construction Disputes: The Two Golden Rules of Leadership

Chase Callaway

The mediation session was about to begin, though neither side had much hope for a settlement to be reached. Communication between the parties had been heavily filtered and nearly non-existent for months now – each side was holding its cards close the vest. The level of trust between the parties had been completely eroded, if it had ever existed in the first place. It seemed clear to everyone involved that this dispute was going to go all the way through a costly litigation process. The project team leaders – Directors, PM’s, and Field Supervisors - reflected on the past few months of the project. How had things gone so poorly? The team recalled the feeling of optimism at the beginning of the project - it seemed like this was going to be a hole-in-one. A great owner, reliable subcontractors, and the type of project that was their bread-and-butter. The same question wormed its way into each of their minds - a question many leaders in this exact situation find themselves considering – Is there anything I could have done differently to prevent this dispute from happening?

Can Leadership Impact the Likelihood of Dispute?

Certainly, in a given construction dispute there are numerous technical and execution related problems which contribute to the overall cost or schedule impact experienced on the project. Construction disputes are complex by nature as evidenced by the myriad of both specialized attorneys and expert consultants employed to help resolve these disagreements. Therefore, the impact that leadership can have in avoiding these complex and costly disputes can be difficult if not impossible to quantify. Nevertheless, the critical role of leadership in successfully delivering the world’s largest construction projects was the primary subject of a 2017 study by McKinsey & Company: 

We believe a critical element for successful large project delivery has so far been neglected: specifically, the “soft” issues of project delivery such as leadership, organizational culture, mind-sets, attitudes, and behaviors of project owners, leaders, and teams….A better understanding of how to get this art right will materially improve delivery of large capital projects – this is especially true in the context of the largest and most complex capital projects. [Emphasis added]

The term “leadership” often conjures images of fearless generals leading troops deep into enemy territory, passionate activists inspiring millions during the American Civil Rights movement of the 1950’s and 1960’s, or any number of other inspiring individuals from the pages of human history. In truth though, the most common forms of leadership, and indeed the most relevant for this application to the construction industry are much more subtle. In fact, I would suggest that there are only two golden rules of leadership that need to be carefully followed in order to effectively reduce the likelihood of disputes on your construction projects – and the good news is that you don’t have to be Napoleon or MLK to pull it off.

The First Golden Rule: It’s not all about you.

As an effective leader you must remember that far more important than your own personal communication style or management preferences – is to understand and embrace the type of leadership that will be most effective given the needs of the team. In order to effectively lead the diverse and interconnected teams that make up a construction project, it is critical for leaders to focus on understanding not only who their team members are, but on how to best communicate with each of them in order to empower the team and greatly increase the likelihood that the team becomes high performing - thus reducing the likelihood of dispute on the project. Balancing this execution of flexible leadership that best suits the needs of the team while maintaining your own authentic voice as a leader is a challenge which requires high levels of both empathy and self-awareness which can only be gained through focused reflection.

One of the great challenges of leadership is to meet people where they are - not where you, as the leader are. While there are a dizzying array of dimensions upon which individuals can be categorized and attempted to be understood - there are two key questions which can help us effectively determine where a person is such that we, as leaders, can effectively communicate with them:

  1. Who are they as a person?
  2. What is their level of maturity as a leader?

To answer this first question, we must consider the team member’s strengths, weaknesses, stressors, motivators, ambitions, etc. It is critical for leaders to understand that the proverbial Golden Rule, namely to treat others as you want to be treated - is completely misleading. A more accurate statement is that you must treat others as they want to be treated.

Each of us have our own unique preferences for both how we communicate with the world around us and how we want the world to communicate back to us. To add a layer of complexity to this, there is often a disconnect between these two preferences even within the same person. While one team member tends to be very logical and fact driven in communicating with others, that same team member may actually prefer that other people treat them in a way that combines logic and objectivity with a reasonable amount of empathy and understanding.  Otherwise, that team member may not  remain fully engaged and or open to the incoming feedback without experiencing a stress response, such as becoming overly defensive. These stress responses greatly reduce the ability for communication to occur as the brain jumps into its primal fight or flight mode of operation. As leaders we must strive to ensure this level of communication as it is paramount to the cultivation of high performing teams.

Maturity as a leader, or vertical development, is the other key component to guide you in determining where someone on your team is. The concept of vertical development can best be understood by contrasting it with lateral development, which represents tangible skills or knowledge that can be gained by reading a book. Vertical development involves more than learning – it represents gaining a deeper understanding or a new, more complete view of a given topic.

This spectrum of leadership maturity ranges from an outside-in view of the world in which individuals see themselves as the center of the universe or allow themselves to become a mirror – simply reflecting back what they believe others want to see or hear; to an inside-out perspective in which a leader is able to define and understand their own system of values and project those outward into the team. Naturally this second type of leader is more vertically developed and is thus able to understand, influence and lead teams in a measurably more effective way.

Understanding each team member’s level of vertical development is crucial in recognizing how he/she views the world and his/her place in it.  This information includes what common miscommunication issues may arise with him/her, how to effectively motivate and influence his/her behaviors within the team dynamic, and perhaps most importantly – how to help him/her grow and develop as a leader in order to improve the overall risk profile of the project. Better leaders achieve better results – meaning less opportunities for disputes to arise.

The Second Golden Rule: It is all about you.

When a team is not high-performing, the knee-jerk response is to begin pushing blame onto members of the team. You didn’t notify me of this issue before it became critical! He didn’t meet the deadline that he agreed to last week! It is imperative that we, as leaders, take a few moments to reflect on the kind of environment we are creating for the team to operate within. Has a baseline of trust been established such that members of the team feel safe enough to have unfiltered conversations about their concerns? As a leader, do I have an aversion to conflict that has inhibited healthy and necessary disagreements - ultimately undermining and preventing true buy-in and accountability within the team structure?

If team members avert their eyes in meetings, hesitate to deliver bad news, or agree to deadlines and requests without actively discussing whether or not the demands are achievable – as leaders it is our responsibility to take a long look at what adjustments we can personally make to change the culture of the project in a way which addresses the underlying issues which are manifesting in the above symptoms.

Listen and Reflect

When deadlines are not being met, communication is strained or non-existent, meetings are avoided, fingers are pointing and emotions are high – this is when the threat of a dispute looms ominously over a project team. As social creatures, it is human nature to recoil from conflict and the desire to bury our heads in the sand can become overwhelming. In times like this, it is imperative that, as leaders, we step up and lean into the discomfort. In order to give our teams the greatest chance of becoming high-performing, and thus minimizing the risk that a formalized dispute resolution process becomes necessary, we must understand that only through truly listening to our teams and actively reflecting upon our own influences on them do we have a chance as leaders to help steer our teams clear of disputes before they can even occur.

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Chase Callaway

David Pattillo & Associates Johns Creek, GA, Division 1 (Litigation & Dispute Resolution)