Thursday, November 7, 2013

Governance Mechanisms that Work in the Built Environment

In preparing materials for the Smart Built Culture Series - keep an eye on the blog for big developments regarding the series soon - I delved deeply into the issue of public and private governance mechanisms that support and enable, or, as is too often the case, tear down and destroy, the working relationships required to successfully deliver a complex construction project.  As built industry professionals realize BIM and IPD require more hard work than Pixie Dust the question of how to develop quality trust based business relationships comes sharply into focus.  

So the question becomes, how do we build trust based relationships that enable us to effectively leverage these innovative new tools and processes?

Historically, open and honest communication builds trust faster and more effectively than any other process. So when, where and how do we engage in open and honest communication in the built industry?  We don't. And THAT is one of our biggest problems.  Why don't we engage in open and honest communication?  Because, by nature, we'd rather engage in dishonest and secretive negotiations.  As Hamilton famously said:  "Men are ambitious, vindictive and rapacious."  Federalist No. 6. Humanity is inherently flawed; not inherently good.  And people operating in the built industry are no different than the rest.

Thus, we must deploy governance mechanisms that take this reality into account.  Which brings us to the concept of integrated agreements.  Integrated agreements are not the product of Kumba Ya sessions. Integrated agreements are the product of hard nosed negotiations among peers, forced by economic reality to engage in open and honest communications.  In other words, effective integrated agreements are a powerful, balanced governance mechanism designed to keep the "ambitious, vindictive and rapacious" nature of the people who negotiate them in check.

Based on the  foregoing I've come to view effective collaborative workshops in the built industry as Constitutional framing parties.  The balance of power achieved in a good integrated agreement looks a lot like the balance of power achieved by the framers of the US Constitution.  The underlying motives are similar too.

Remember Machiavelli's famous statement about governing a Republic?  He said: “It is necessary to whoever arranges to found a Republic and establish laws in it, to presuppose that all men are bad and that they will use their malignity of mind every time they have the opportunity.”

I submit a similar view is warranted in negotiating any legal agreement; even a warm fuzzy integrated agreement among "friends".  Reagan's famous admonition that we should "Trust but verify" is another sound piece of advise.

I suggest we keep the foregoing thoughts close when we negotiate integrated agreements.  Readers interested in the topic may want to read the piece quoted and linked below.  From which, by the way, I lifted the quotes by Hamilton and Machiavelli!

Universal human depravity thus precluded any simple form of government whether democratic, monarchical, or aristocratic. The solution of the framers was the mixed government in which the democratic House of Representatives, the aristocratic Senate, (chosen by the state legislatures), and the monarchical president (chosen by the Electoral College) would along with the judiciary divide the powers and functions of government and thus check and balance the tendency of each branch to maximize its power at the expense of the people’s freedom. As James Madison explained in Federalist 51, the “separate and distinct exercise of the different powers of government” would allow each branch “to resist the encroachment of the others,” for “ambition must be made to counteract ambition.”

Equally important was the principle of federalism, the protection of the power of the states evident in giving state legislatures the responsibility for selecting Senators and the presidential electors. Given the variety of conflicting interests among the states, Madison wrote in Federalist 10, there will be a “greater security afforded by a greater variety of parties, against the event of any one party being able to outnumber and oppress the rest,” and “greater obstacles opposed to the concert and accomplishment of the secret wishes of an unjust and interested majority.” Any selfish interest or violent passion “will be unable to spread a general conflagration through the other states,” and “the variety of sects dispersed over the entire face of it [the nation] must secure the national Councils against any danger from that source.” Just as the variety of interests and passions among the people will check and balance each other, so too will the variety of state interests check and balance the power of the federal government.

James L. Salmon, Esq.
Collaborative Construction
300 Pike Street
Cincinnati, Ohio 45202
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Office 513-721-5672
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Cell 512-630-4446

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