Five additional, most common home-grown hurdles in Contractor Management
Rather than dealing with the challenges in Contractor Management effectively, companies often exacerbate the situation by bringing additional challenges upon themselves.
Transactional focus rather than long-term value
On any major site, there will be a frequent or constant need for pieces of work and small projects to be executed. The most effective performance is possible where the contractor and their workers are familiar with the site and with both the client’s organisation and their needs and where they feel confident enough in the future flow of work to invest in building and securing these capabilities.
Where short-term decisions based on price prevail, rather than ensuring the best possible result, this can undermine contractors’ confidence in sustainable business volume. This in turn means the customer’s site is competing with that contractor’s other opportunities and priorities. In times of skills shortage, this can mean the work is jeopardised from the outset.
Pushing to win concessions rather than getting the best solution
Where contractors need the workload, they will be inclined to make concessions to the client, such as agreeing to a price at a less than healthy level, committing to unworkable deadlines or taking on scope they are not fully comfortable with. This ultimately puts them in a position from which they can only recover by looking for ways to exploit weaknesses on the client’s side to their advantage, such as by applying extensive or aggressive claims management, or by trying to get out of the contract altogether when more attractive opportunities emerge.
Focusing on paperwork rather than verifying genuine capability
Contractors often perceive clients’ qualification procedures as increasingly onerous tick-box exercises, geared towards those responsible not being to blame for problems later on, rather than being about having the fullest mutual confidence in both companies’ joint ability to perform.
Pre-qualification questionnaires can have well over 100 questions to respond to, without really delivering a verdict on a company’s true ability, suitability and willingness to perform – or their compatibility to the client organisation.
Focusing on getting it right rather than just not being to blame when it goes wrong pushes the customer to address what really matters. Likewise, recent history is littered with examples of contractors failing on contracts or even going into bankruptcy although everything appeared to be in order – on paper.
Losing experienced staff without securing their insights for the company
Many organisations have had to streamline their overhead and with that their staffing levels. Multiple contractors have observed that their clients’ staff are now less familiar with complex issues than might have previously been the case, with newer staff taking on multiple roles and responsibilities from others who have left the organization, such as by taking early retirement.
Aside from building the “the next generation” while more experienced staff are still on board, management could provide continuity by shaping roles and career paths in a way that supports this, for example by systematically exposing staff to multiple disciplines and functions through a trainee programme, building cross-functional teams and taking on accountability for contractors’ on-site performance.
Management not engaging or turning a blind eye
Management expectations are critical to shaping the behaviours and methods pursued further down the chain. We have observed quite different levels and styles of management engagement, some more effective than others. Management drives whether contractor evaluation and selection are a paper-exercise, ticking the boxes so as not to be to blamed when it goes wrong, or whether it is a genuine effort to find a solution that will work.
Clarity of specifications, discipline of sticking to one’s own deadlines and deliverables, ability to raise a flag, decision-making authority on the ground and even the way contractors and their staff are treated are just a small selection of critical drivers for how effectively and reliably a contractor can perform and will be committed to their client’s success – and they are all strongly influenced by what management conveys into the organisation.