Tuesday, August 25, 2015


Trust based cultures breed success while contempt and failure flourish among the mistrustful. Elite fighting forces, championship sports teams and successful project teams operate in trust based cultures where individuals often sacrifice themselves to protect others. Trust based teams overcome challenges more easily and deliver better results than mistrustful teams. Accordingly, trust is a precious commodity in commerce as it drives success where other resources fail. So what happens when trust is broken?

The Scorpion Requests a Ride

The fable of the scorpion and the frog tells the story of trust broken. For those unfamiliar with the fable the scorpion approaches the frog and says, "Frog, can I hitch a ride across the lake? 

 The frog, relaxing along the shore line says, "Not no, but hell no!  Why would I carry a scorpion across the lake?  You'd sting me and I'd die."

The scorpion responds, "Frog, why would I do that?  You are right. If I sting you you'd die. But I cannot swim so I would drowned and die too.  So why would I sting you if that means I'll die with you?"

 The frog, after thinking it over, says "Ok, load up.  I'll carry you across the lake."
The scorpion climbs on the frog's back saying, "Thanks frog, I really appreciate your help. You won't regret it!" The frog slides into the lake and starts the long swim to the far shore. 

Halfway across the scorpion's stinger begins to quiver, .... and, suddenly, he strikes, driving the stinger deep into the frog's back.


The scorpion gazes across the broad calm waters of the lake.  Winking at the frog, the scorpion says, "It's in my nature." Then the scorpion and the frog sink beneath the water.

Mistrust in Construction

Burdened with fragmented, adversarial and mistrustful culture the construction industry reaps what it sows, as did the scorpion. In fact, scorpions abound in the industry, fostering mistrust and other ills. That broken culture manifests itself in many ways.

For example, the industry wastes 57% of the labor it consumes and as a result the productivity rate in construction has been flat or declining for 50+ years.[i] The bottom arrow on the graph - red - reflects labor productivity in construction from 1960 through 2012 while the top arrow - blue - reflects labor productivity in all other non-farm sectors of the economy.

While flat to declining labor productivity is one measure of failure in construction there are others.

In 2004 the US construction industry wasted $15.8 billion due to a lack of interoperability among digital platforms used in capital facilities[ii].  The value “added” by the construction sector in 2007 was $1.2 trillion, and close to 50% of that “value” was waste.[iii]  In other words, the industry wasted almost $600 billion dollars in 2007!

Waste manifests itself as labor inefficiencies at a rate of 30%, as material waste at 30%, and re-work at 10% while 5% arises from poor planning and management. Together the foregoing account for $450 billion of the $600 billion wasted in 2007.[iv]  Further, 72% of construction projects run over schedule, and 70% run over budget.[v] 

Not fully reflected above, additional failure manifests itself as injuries to workers, broken equipment, design defects, energy loss, inefficient operations and undue maintenance costs.  These factors contribute billions more in red ink. The industry embraces business models that extract profits from waste while shunning those that earn profits by adding value. 

In a sane world replacing this broken culture would be the overarching goal of the industry.  But the construction industry isn’t sane because it does the same thing over and over while expecting different results.  Let’s stop the insanity and build a trust based culture that supports value add business models.

Converting an Abundant Resource into a Precious Commodity

Everyone experiences the pain of the frog from time to time. We desperately want to trust one another. It’s human nature. Conversely, it is also human nature to whip out our stingers when threatened. The Golden Rule Alliance converts an abundant resource, belief in the Golden Rule, aka business on a handshake, into a precious commodity, Trust. A new legal framework enables participants in the Alliance to confiscate the scorpions’ stingers while working together on the golden pond.

Root Cause Analysis

Defective legal agreements reinforce the mistrust that lies at the root of failure in construction. Existing contracts fragment teams, mandate adversarial relationships and foster mistrust.
A legal framework reaps what it sows.  If it sows fragmentation, adversarial relationships and mistrust then it reaps fragment teams, adversarial relationships and mistrust.  Let’s deploy a legal framework that supports a smart built culture.

If you and your organization are interested in creating and deploying a smart built culture in your AEC Community please reach out to us. You might also consider joining the Golden Rule Alliance. You can learn more and join the Golden Rule Alliance by clicking the link below. 

The Golden Rule Alliance

[i] http://www.aecbytes.com/viewpoint/2013/issue_67.html AECbytes Viewpoint #67 (March 14, 2013) Labor-Productivity Declines in the Construction Industry: Causes and Remedies, Paul Teicholz, Professor Emeritus, Dept. of Civil and Env. Eng. Stanford University
[ii] http://fire.nist.gov/bfrlpubs/build04/art022.html  and http://fire.nist.gov/bfrlpubs/build04/PDF/b04022.pdf  Cost Analysis of Inadequate Interoperability in the U.S. Capital Facilities Industry, Gallaher, M. P.; O'Connor, A. C.; Dettbarn, J. L., Jr.; Gilday, L. T.  NIST GCR 04-867; 194 p. August 2004.
[iii] http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470523700.html Rex Miller, Dean Strombom, Mark Iammarino, and Bill Black, “The Commercial Real Estate Revolution,” John Wiley & Sons, Inc. 2009 at pg. 3.
[iv] Id.
[v] Id. 

Welcome to the Golden Rule Alliance

James L. Salmon, Esq.
Collaborative Construction
300 Pike Street
Cincinnati, Ohio 45202

Summary of Services and James L. Salmon's CV

Office 513-721-5672
Fax 513-562-4388
Cell 512-630-4446

1 comment:

Jordan said...

Some great points here. Trust is such an important issue in this industry. Thanks for sharing this crucial post!