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How do we build trust within construction?

April 2021

An Interview with Iain McIlwee, CEO at the Finishes & Interiors Sector (FIS)

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        We want to give you a deeper understanding of what goes on behind the scenes at Barbour ABI, as well as connecting with major figures within the industry to learn what makes them thrive.

        This month we spoke to Iain McIlwee, Chief Executive Officer of the Finishes and Interiors Sector (FIS), a partner organisation of Barbour ABI.

        Iain and the FIS are doing lots of work around creating frameworks that will build trust and support for businesses within the construction industry. We spoke to Iain about these support networks and how he envisions construction being able to move our “flotilla of tankers” towards positive change.

        Can you give us a quick overview of who you are and what the FIS do?

        I’m Chief Executive of the Finishes & Interiors Sector (FIS). We are the trade body for the finishes and interiors community; a sector that accounts for about 10% of construction.

        It is a people-intensive area of construction: there are around 250,000 people working in finishes and interiors. We finish buildings of all types across almost every major sector of construction: residential, commercial, warehouse, industrial and retail industries.

        The work we do is focused on helping our members become better and then projecting them into the marketplace. We’re built on a code of conduct and a vetting process that sets a clear standard of what we expect from our membership, which they then project onto their customers and the wider construction sector.

        We then work for a number of groups that look at individual parts of the supply chain to see how we can work together to make the supply chain better. That’s what is unique about the FIS, we’re not a construction products organisation or a contractor organisation – we’re a supply chain organisation. In our membership we have manufacturers, distributors, and contractors of all types: main contractors, specialist contractors and specialist subcontractors.

        Does having such a wide base of customers allow you to help move forward the conversation of trust within the industry?

        For us, the question of increasing trust with one another is about fixing problems and making things better, not just mitigating risk. I think risk and trust are two sides of the same conversation. How do we manage our risk as a supply chain and how does that engender trust in us to deliver something as close as possible to a risk-free project?

        Construction has tended to be very siloed in terms of operation. We’re so rooted in a system of managing risk through contracts. We all mitigate our own risk on a project, rather than managing project risk as an entire supply chain.

        The question is always: “who’s got design liability?”. Design liability is a really fluid thing and could be as simple as a problem occurring onsite that wasn’t pre-planned and something seemingly small getting changed in response. The person who would make that real time decision knows they’ve signed a contract that says if they are at fault for a delay then they are subject to incredibly punitive fines, which is going to affect their mindset and decision making in that moment.

        We then also have to factor in how this all plays out to the public. We know major tragedies are in the mind’s eye of the nation and politicians and customers, and it has further eroded trust in us as an industry. So now we have a perception issue and any other problem is magnified.

        Transparency is key. There’s never any one thing that causes unfortunate accidents. You’ve got to look at legislative structure, regulatory environment, how buildings are inspected, how products are specified, and how much time is needed for all of this. Chaos is a fair way to describe construction procurement.

        “90% of the work we do runs over by more than 10% of target. So if 90% is “wrong” then you need to re-align what you consider normal.”

        We run tender processes that involve multi-stage tendering that are ultimately around keeping people lean and appointing them late to ensure that you get the best possible price. We don’t simply design and build – we design a bit then build a bit, then design a bit then build a bit etc to keep everyone lean and hungry. Therefore, once you discover a problem there’s not a lot of time to fix it. And if you are deemed to be the problem, then we’re back to the contractual issue of earlier where you get punitively punished and you carry the weight of the issue. We need to put time back into the process.

        In a recent webinar with Barbour ABI, you used the phrase “incentivising better relationships” – how do we do this?

        I think it means that we need to measure how people value long-standing relationships and how they manage their supply chain, rather than a “relationship” simply being a box ticking exercise on a project.

        We’re one of the last industries to use retention in contracts – e.g. “hold back your money in case the job isn’t right”, so there’s clearly a level of mistrust in there. If you look at the cost and risk of waste, we create a risk of waste by not planning better. If we got it right first time there’d be no need to hold retentions in contracts.

        Every building has on average 30 fit outs in its lifetime. So there’s constant maintenance and re-working. If you invest in maintaining relationships throughout the building life then you can renovate and improve together. Strategic relationships are not that well rewarded in the moment, they take time to thrive.

        In our webinar you described the industry as a flotilla of tankers, not a single oil tanker when describing the issues of the industry needing change. Can you delve into that?

        It sounds strange for somebody in my position to say but I don’t really believe in one industry. Construction is an ​​​​​​​ecosystem that is constantly mutating.

        Where you run into issues trying to make changes is that it’s very difficult for one person or business to make a change on their own. A small contractor in Preston may want to be the most the most sustainable, digitally enabled contractor in the world, but ultimately their primary concern has to be to get through to next Thursday. If you’re constantly stuck in survival mode, then how do you also increase sustainability or think about apprenticeships, or anything else?

        You need to incentivise a new way of thinking. Some of that comes from legislation. Some comes from sensible procurement from government to get everybody moving in one direction. But if only one tier one contractor decides to be “perfect” and turn their tanker in a new direction then everybody else is going to crash into them! There needs to be many turning in the same direction and understanding the drivers of others for change to succeed.

        “If the trust equation isn’t working somewhere, there’s always two sides to it: Are we doing enough to earn trust and are others doing enough to recognise the steps that are being taken to increase trust?”

        We need to think about how to solve a problem, not to prove how the problem isn’t my fault. Everyone is afraid of litigation and footing the bill for a problem. It incentivises people not looking too hard at a problem because they don’t want to discover something that may be their fault.

        It’s really hard to be different. For instance, we’re setting up an apprentice employers’ group, because we need a group of companies to improve apprenticeships. We want more apprentices to make the sector thrive, but we need to understand that providing apprenticeships isn’t feasible for all companies. So instead the FIS are asking the question: “who is prepared to take on apprentices so that in two years times we’ve got a system that works?”. It’s not going to be perfect overnight, we’re going to get it wrong a few times, but we can’t allow failure to stop us trying.

        All construction companies do jobs that are relatively huge compared to their own size. Therefore, the concept of failure is terrifying. One failure could a be a third of your turnover, therefore we are naturally going to be afraid of change as a sector because the risk of change is enormous. Continuing what you’re doing is safer, therefore it takes a brave company to radically change how they operate. It takes energy, leadership and resilience.

        We need to get more used as an industry to checking our homework and showing our results to each other. The system can’t create opportunities to fail. We’ve got to trust that designers are setting us up to succeed.

        It’s never going to be perfect. Don’t focus on thinking about whether a new idea is perfect. The old system isn’t perfect. Don’t sit out thinking “paragraph 13 of a new pledge isn’t perfect”. Consider instead whether the other 300 paragraphs might be presenting something worthwhile that we build towards.

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