Building Consensus is Building Success

Stakeholder Engagement in Construction

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Sustainability has become a new standard for construction projects and the best way to achieve sustainable project goals is to identify, evaluate, prioritize, and manage the interests of various stakeholders through a comprehensive stakeholder engagement process to achieve the desired project outcomes.
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True stakeholder engagement results in more effective and relevant building designs and functions; however, despite its proven application, the concept and practice of stakeholder engagement is still underutilized and highly misunderstood.

While shareholders have an ownership stake, stakeholders are interested in a project and its performance and functions for various other reasons. These reasons, regardless of how diverse, must be considered and reconciled into a project for it to be a resounding success. Project management no longer revolves solely around budgets, timelines and project scope; it must also include people.

Stakeholders can be individuals, groups or organizations, consultants, contractors, subcontractors, clients, engineers, architects, employees, developers, managers, government and regulators, conservationists and environmentalists, or suppliers, in addition to residents and communities as a whole. Stakeholders bring different levels of expertise, and offer unique insights and a broader perspective.

The core responsibilities that planners, designers, and builders have to stakeholders include the ability to communicate why a project is necessary in addition to how it will progress in terms of timeline and budget, as well as how it plans to satisfy resource requirements. Certainly, communication is a critical component of stakeholder engagement. Even before a project’s specs are drawn up, sites are selected, and the ground is broken, an engagement plan should be drafted and consultation with various stakeholders should take place. It is important to understand who these stakeholders are and what their needs and interests are.

As stakeholders have their own interests in the project, the engagement process is paramount to managing and reconciling the various interests at every stage including pre-design, design, siting, bidding, through building construction and completion. A project is more likely to be successful if stakeholders’ needs and interests are understood, evaluated and integrated into a project. When the concept for a new construction project is initiated, there are several questions to ask to engage stakeholders for the betterment of the project and its successful advancement.

Questions that should be asked are: who are the stakeholders, what are their interests, what opportunities/challenges can arise, what responsibilities are afforded to these stakeholders and what strategies should be used to engage, prioritize and manage them?

To begin, it is important to identify stakeholders, their positions and their needs. Stakeholders can be identified by interest, power and attitude and this can help prioritize their positions based on the degree of decision-making power they hold as well as the degree to which stakeholders contribute to the project on an economic, social or environmental level.

There are many methods and approaches by which stakeholders can be engaged to create long-term, positive relationships that support collaboration and project success. Besides specialized stakeholder programs, consultation can occur through one-on-one meetings, public hearings, information sessions, town halls, newsletters, leaflets, phone calls, and emails at the various stages of the project.

Stakeholder management is another key element to meeting expectations and addressing diverse interests. In managing stakeholder interests, it helps the project advance in accordance with a clear and concise plan, enabling the project to be flexible enough to address changes and resolve challenges when they arise while ensuring all desired project outcomes are met.

There are three management approaches that can be undertaken including a strategic management approach where the interests of shareholders take precedence over that of stakeholders; a multi-fiduciary approach where all parties have an equal stake; or a stakeholder synthesis model which is a moral, yet non-obligatory approach to stakeholder engagement. Regardless of which approach is selected, established performance targets should be prioritized and evaluated at every stage of development to support continuous improvement and ensure targets are being met. A feedback loop ensures action is taken in accordance with stakeholder interests and encourages and motivates engagement throughout the process.

Projects that have not included stakeholder engagement processes are more likely to lack in scope and can fall victim to regulatory and project changes, as well as negative public perceptions and attempts to block progress. This can have severe implications on budgets, timelines and overall success. This is exactly what happened in B.C. with the approval of Petronas’ proposed $36 billion Pacific Northwest LNG Project. After receiving government approval, a weak market paired with opposition to the project and a slow regulatory process led to the eventual cancellation of the project.

Stakeholder engagement is a bona fide way to reduce and mitigate risk on construction projects while simultaneously improving sustainability and project success. Sustainability is a new value measure that not only considers the outcome of the final project but also how that project progresses, performs and functions in accordance with the natural environment and society. A sustainable project is one that offers affordability, efficiency, quality and the desired aesthetic and functionality for the long-term. It is a new way to plan and build effective communities.

There are many great examples of construction projects where stakeholder engagement can have positive results, such as community and residential developments like retirement homes, schools, playgrounds and even mixed-use developments. A retirement home, for example, would be best served by taking into consideration the needs of the retirement community, in addition to other project stakeholders. A schoolyard or playground will be most effective if the needs and interests of children are identified, evaluated and met.

Efforts are being made to develop engagement plans and best practices to ensure effective communication and engagement with stakeholders. In some countries, stakeholder engagement isn’t only a best practice; it has been legislated. Legislators in the UK, for instance, have taken an active role in the development of projects such as the Joiners Arms in London, an office and luxury flat project. Planners have instructed developers that a LGBTQ+ friendly pub must be included on site for a minimum of 12 years.

As London has suffered a loss of 58 percent of its LGBTQ+ venues since 2006, conditions like these are meant to address the needs of the community in the planning stage to ensure projects are viable. This requires an understanding of the project as well as the community in which projects are built, and engagement with the broader community is a great way to access and collect data to support these kinds of decisions.

Another example closer to home is the activity surrounding the proposed Rail Deck Park in Toronto. The City of Toronto has planned a new urban park on the rail decks near City Place, a green space that is highly anticipated by residents. Recently, a developer has alternatively proposed using that space for condos and offices. Residents are coming together to sign petitions to support the park to help make it a reality. The cohort in favour of the park plans to attend public meetings to voice their concerns and ensure that development occurs in accordance with what is best for the community, the city, and its residents, many of whom feel that the city already has enough condos and offices.

Ultimately, stakeholder engagement and management is a manifestation of corporate responsibility in the construction world. From an environmental, social, economic, and even moral standpoint, engaging with stakeholders enables owners, engineers, contractors, subcontractors, managers, superintendents and others connected with the project to achieve their project goals responsibly. Failing to engage stakeholders and execute on their interests can have negative impacts that could have otherwise been avoided by simply identifying, prioritizing, managing, measuring, and evaluating stakeholder interests and needs to facilitate a collaborative construction process.

Infrastructure projects offer some of the best examples that demonstrate the importance of stakeholder engagement in successful project planning and execution. There are numerous cases where infrastructure projects have been challenged because of inadequate stakeholder engagement efforts.

One must look no further than the Dakota Access Pipeline in South Dakota. Protests were held in reaction to the pipeline’s approval as its construction can threaten the region’s clean water as well as the traditional lands of the Standing Rock Indian Reservation, who were not properly consulted about the project that impacts the community directly. While the U.S. Army Corps of Engineers conducted a review and found no real threat or impact, many other entities, including the Environmental Protection Agency, have advocated for a formal, more detailed assessment and report to be conducted.

While President Obama halted the project’s progress to address the interests of the protestors, President Trump signed an executive order to expedite the pipeline’s construction, regardless of the opposition to the project and the environmental and social risks associated with it.

While stakeholder engagement isn’t a new concept, it is only starting to be applied in the construction field in the interest of project completion and success. To better understand the implications of stakeholder engagement, greater research is being facilitated to better comprehend its role and function in construction. New tools, training, resources and processes have been created to better manage stakeholders and their various interests throughout the engagement process. It is in the best interests of construction professionals to understand how to better manage timelines, budgets, resources and now, people, to ensure project success.

Engaging stakeholders will result in higher quality output, improved safety practices, and better overall project outcomes, which means more efficient and effective buildings, communities, cities, provinces, states, and even nations. Stakeholder engagement supports projects that work and is increasingly becoming a measure of success in the construction field.

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December 18, 2018, 9:26 PM EST