Cost and Trust are highly correlated on construction projects! Learn more about a recent study by Construction Industry Institute.

The Cost-Trust Relationship

How do you lead your teams?

Do you and your employees have a highly collaborative and trusting environment?

Take the Trusted Leader Quiz to find out!

Steven Covey wrote that "the first job of any leader is to inspire trust". Organizations worldwide struggle from a lack of trust and lose billions of dollars annually as a result of the hidden "tax" that occurs as a result of low trust environments.

Research by the Construction Industry Institute confirmed this "tax" shows up on our projects. In "Cost-Trust Relationship" (Study RS 24-1), CII surveyed 262 projects and found a correlation between mutual trust and project cost. What they found is that teams with high levels of trust tended to have much lower project cost than project teams with low levels of trust.
In other words, as your level of trust goes down, your cost goes up--and as your level of trust goes up, your costs come down!

Cost-Trust Relationship

Covey described trust in terms of two key dimensions: Character (integrity, motives, etc.) and Competence (one's capabilities, skills, and track record).   In order to grow trust, we need to provide opportunities for our colleagues to confirm that we have good character and a solid foundation of competence. On our projects, this translates to important behaviors we consistently stress in partnering: open and honest communication, transparent accountability, and opportunities for feedback.

How does Partnering help your project team garner trust?

The system is embedded in the key Elements of your Partnering Charter! At the outset of a project, we gather the team together in a Kick-off session to co-create our goals in terms of schedule, cost, quality, and safety, and often establish ground rules for how we will behave. We then set up a Survey Tool that will allow us to reflect on those goals and rate whether the team is living up to expectations or not. With our Follow-up partnering sessions, we can return to our previous Charter and determine whether our goals should be updated based on what is happening in the field and come up with solutions for where we are getting stuck.

The process helps teams establish goals, generate momentum and develop mutual trust - which we know translates to better outcomes in terms of our project's costs! It's a self-fulfilling prophecy.

Steve Covey said that strong leaders develop "smart trust", which is defined by clear expectations and accountability built in to the process. We have found over time that strong leaders are not the "Command and control" type, who ensure that everyone on the project knows how they will be punished if they disobey orders. Instead, they are "Trusted Leaders" with followers who voluntarily choose to listen to the orders they receive and follow through.

Partnering marries these concepts of "Trusted Leadership" with "smart trust" based on accountability and follow through. We hope you take a moment and take the Trusted Leader quiz to see where you fall on the spectrum. Share your thoughts by emailing us comments here!

-Rob

Sources:
Cost-Trust Relationship (RS 24-1) - Abstract
Steven M. R. Covey - "How the Best Leaders Build Trust"
Trusted Leader Quiz - Sue Dyer 2008

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