This chapter is the outcome of conversations with current and former senior personnel within the industry, and psychologists specialising in ‘team dynamics’ and behavioural observation.
In discussions about team dynamics psychologists talk about the need to find a balance of individuals with different colour personalities – ‘red’ being assertive, even dominating; ‘blue’ the detailed perfectionist; ‘green’ the calming mediator; and ‘yellow’ more of a laid‐back enthusiast. Effective teams will normally comprise an appropriate balance of personality colours – except, as one psychologist remarked very pointedly, ‘in your industry (construction), where such a balance is not apparent, and nearly everyone in senior management is most definitely “red”’!
This observation is one that has been commented upon many times over the years by all sorts of people connected with the industry. Certainly, the broad construction industry management style has clearly been characterised as ‘be “red” or dead’. Nevertheless, some progress has been made, particularly with the development and successful implementation of more collaborative forms of contract and working agreements. However, when you consider dispassionately the way in which the industry still creates and manages its senior leadership teams, it remains apparent that this process still often occurs ‘by default’, lacks proper objectivity, and too often fails to focus on developing a management structure that can optimise team and leadership performance.
Surely, for shareholders and for the business, such optimisation must be a key objective? In a sector that is all about managing high risks (for pretty minimal reward in comparison with many other industries), the quality and effectiveness of the senior management team are key in how a business manages and protects itself from inherent hazards. By ‘management’, we refer not only to the executive management, responsible for the day‐to‐day running of the business, but also to the formal Board of the company (including non‐executives) and its role in providing independent oversight and governance.
So what appear to be the most common areas of senior management failure in construction sector businesses, and why? These are discussed below, in no particular order. Indeed, all of the factors described are to some extent both interrelated and interdependent.
How often have we all witnessed a senior manager struggling to cope with the demands of their promoted role? Construction seems to have a fatalistic assumption that good project engineers will automatically make good project managers, who then make good business unit managers, who will then easily convert to make good senior managers or Board‐level directors? Such thinking has three direct and unfortunate consequences:
There is nothing wrong with specialism. However, as an individual's career progresses to senior management and Board‐level situations, then the contribution and effectiveness of that person can be greatly enhanced by the personal diversity of experience and skills that they can bring. Although the situation has improved in the past 20 years, we still observe that the training of our construction professionals is largely within quite narrowly defined pathways (and with quite a lot of ‘groupthink’ in the training methodology). There is also a tendency to ‘box’ people in the skills that they have (successfully) demonstrated in their work to date. So, employee A becomes the person to always lead the crisis management team for problem type X, and employee B will find themselves pigeon‐holed as the key person in seeking commercial resolution of claim type Y, etc. Whilst it is a natural response to focus individuals towards continuing to ‘do what they are good at’, this prioritises short term business demands over the need to develop individuals with skills diversity that would enhance their value in future senior leadership roles.
It is also often overlooked by senior management and Boards that they have direct accountability to develop future management and leadership teams as a key part of their ongoing responsibilities. This needs to be about more than sending high‐potential staff on the occasional (or even regular) construction industry training course(s) – it is about fostering and encouraging wider personal experiences that can provide future leadership with the skills to deliver innovative and competitive advantage. It is also about recognising the differences in style, process and oversight that are required by individuals as their seniority increases within the organisation.
So, what should we be seeking to develop towards, and what should we realistically expect of our key staff in senior management positions? Perhaps:
Reflecting back on their own experiences, some colleagues have considered their highest stress levels to have been encountered when working on projects in their 20s and early 30s, particularly on smaller projects. There were just so many day‐to‐day decisions to be made, and they survived very much on their own instincts and in building a strong core team around themselves. Many of these decisions had to be made quickly, and often alone. The consequences of making the wrong decision (which inevitably did happen now and again) may occasionally have been major for the immediate project, but at that level they rarely threatened catastrophe for the overall business. As careers develop there will inevitably be an increasingly wide support network, and much greater advisory or analysis resources will become accessible to help decision making. More and more time should also become available to consider, analyse, and make informed decisions. Generally this is a good thing, as the more senior you become in the decision‐making process, then the greater is the overall impact and materiality of the decisions being made (either individually, or increasingly as part of a senior management team or Board). In all parts of the construction industry, the consequences of adopting the wrong strategy or in pursuing ‘inappropriate’ projects can very rapidly become fatal to that company. So many ‘catastrophe’ strategies or projects can be traced directly back to poor decision making at the initiation or decision‐making stages. Not only can these examples (many of which are well described elsewhere in this book) be financially ruinous, but the amount of senior management time then required over an extended period in order to address the consequences will always distract leadership from its other key responsibilities and duties, including neglecting potential business opportunities through lack of available time and resource to pursue them.
Accordingly, one of the key personal transitions for anyone evolving into a senior management role is to develop refined and changed skills in their decision‐making techniques. There is no longer the need for frequent, intense and time‐pressured direction, and learning to listen, to question and to utilise the wider availability of resources will permit full and informed consideration of all knowledge to then provide timely direction.
Also important is the increasing need to consider a wider corporate picture, encompassing consequence, accountability and governance, which all form part of the collective responsibility discharged by a senior management group or a Board.
It was Professor Michael Porter who once declared that, ‘The essence of strategy is choosing what not to do’. Undoubtedly, the toughest business decision at senior level is always the one that requires you to say ‘no’ – to clients, to colleagues, to partners, or whomever. Because the consequences and outcomes of key senior management and Board decisions can be so critical, then it is necessary for the senior individuals within these bodies to develop an appropriate level of objectivity and dispassion in their deliberation. It is not always possible (or desirable) to fully explain to outsiders the basis behind a particular collective decision by a management team or Board. As a leader your emotional commitment to the business (including towards your staff, clients, etc.) should continue, but also needs to change in its nature, introducing a certain level of dispassion. The decisions made are increasingly for the wider business interest, and less to satisfy individual stakeholders within it. Many managers struggle to accept and implement this fact as they progress upwards in their careers. As General Colin Powell once put it, ‘Being responsible sometimes means pissing people off’.
In a senior management or Board role, ‘knowing all of the details’ is considerably less important than ‘knowing all of the important details’. Accordingly, as careers develop, a key management skill is characterised by increasing movement from the strong micro‐management control of successful project and business unit management, towards the ability to objectively (and often swiftly) assess a wide range of information, and to then efficiently determine which are the ‘important’ parts? Determining correctly ‘what exactly is it that I (or we) have to decide?’ is often no less important than making the actual decision. There is no real value in having a clear and precise answer to an imperfect question! Successful senior management and Boards focus on analysing, identifying, and concentrating primarily on those risks and/or decisions that have the greatest impact at a corporate or strategic level. It is an inability to transition from micro‐control into this different level and style of macro‐management that is very often a key failure factor where good mid‐level managers prove themselves unable to make the grade at senior corporate level.
A senior management or Board that fails to implement effective corporate oversight will fail in its responsibilities. That oversight has such a bad reputation is probably unsurprising. We can all recall experiences of working in middle or lower management and cursing the ‘interference’ of head office. ‘They don't understand the way the business works on the ground’ or ‘they're all a bunch of jumped‐up administrators’ are the cries too often heard around the time of a departmental visit from a centralised team. However, it need not and should not be so. Oversight and corporate governance are both necessary and, when appropriately implemented, are valuable components of effective management at senior level. They are a further area in which the individual manager needs to educate themselves as they rise through the company structure. This forms another important component of being able to develop a wider corporate perspective for senior level decision making. Key success factors in implementing strong corporate oversight include having senior managers and directors who,
US Presidential speechwriter James C. Humes once stated that, ‘the art of communication is the language of leadership’. This phrase is memorable for two reasons. First, because of his observation that leadership actually has a language, and by implication, that you cannot therefore be an effective leader unless you can speak the language. Second, because his description of communication as an ‘art’, and in the subsequent expansion of this theme that art takes on many different forms and that there is rarely any clear distinction in art between what is good and bad. (It is, however, always possible to understand very clearly which particular type of art (i.e. communication) – is most effective in attracting our attention and response).
As managers rise through the corporate hierarchy, there appears to be an associated assumption that an individual's communication skills will develop and increase in tandem. This is often not the case. Let's face it – some people are naturally poor communicators, and will always be so, no matter how much training is absorbed. In itself, this may be no disaster – particularly if the individual can recognise this weakness and take proactive measures to compensate as part of a senior management or Board team. This further emphasises the point made earlier about the importance of having a balanced team selection, with a blend of different skills, talents and experiences (strong communication being just one of these).
For the senior management or Board, there is little point in making all the right decisions if it is then unable to effectively inform, direct (and inspire) using these decisions with clear messaging.
Good communication is not just an outward art form – it is always good to remember that we were born with two ears and just one mouth! Strong managers and leaders will invariably also be good listeners, focused as much on the absorption and analysis of incoming data as they are in what they want to say.
An effective multi‐directional communication system is also the basis for effective delegation. Senior management and Boards cannot stop merely at making decisions. These are only effective when they can delegate implementation, and where they are then proactive in following‐up on the delivery of their key decisions in a rigorous manner.
Over the years, wider observations of senior management and Boards (across all industries, not just in construction) have been that the largest single factor in any disjointed or failing business has always revolved around poor or inappropriate communication and/or delegation skills in some form.
It is evident that risk management and human factors play a key role at many levels within an organisation. Nowhere is this more so than at the level of senior management and the Board. We consider that the following key attributes represent a core skill set for the effective control and management of an organisation at senior level.
Of course, the above list is by no means exhaustive. It is precisely because there is no simple management tool that always works (and which individuals will consistently implement) that we will always have the need for individual thought, analysis, creativity and collaboration – this being most effectively realised within a senior management or Board structure conforming to the above core principles.