The Multi-Company Executive Team
An international construction company and a major oil company entered into a contract to build a huge refinery involving several hundred million dollars. Early in the construction process, differences of opinion between key executives of both companies arose concerning the architect’s renderings and the installation of specialized chemical processing equipment that was not included in the bid.
These differences caused disputed adjustments and major delays in the interim payment schedule which eventually shut down all construction completely. Both companies accused the other of deliberate and illegal misconduct. This resulted in preparations by both companies for litigation that could incur staggering financial awards and punitive terms.
My company was contracted to explore the possibility of negotiating an agreement that would transform the potential for litigation into a workable action plan and re-engage the construction of the refinery. I interviewed the key stakeholders of both companies and a representative of the architectural firm to obtain the technical and interpersonal data that would be essential to creating a meaningful interaction.
I conducted a negotiation workshop that included five high-level executives from each company and two representatives from the architectural firm. I obtained agreement from each of the participating companies to allow me to structure the negotiation method and to require the participants to adhere to the rules of engagement that I would establish throughout the process.
I orchestrated a venting session on the first day in which the spokespersons for each of the three entities were allowed to express their frustration with the situation and to articulate their perception of the behavior of the other companies. The representatives of the other companies were required to listen in silence as each venting group took its turn in rotation. The listeners agreed not to argue, defend, or retaliate. This consumed half of the first day.
Then I gave each company an assignment to prepare for a similar encounter the next day, except the focus would shift from venting frustration with their perceived adversaries to accepting responsibility for finding a mutually workable solution. The first step in this solution-seeking process was for each company to acknowledge the ways in which its employees and executives had contributed to the misunderstandings and the problems. Each group had the remainder of the first day and three hours that evening to prepare the acknowledgements that they would present on the second day of the workshop. These statements were only to be about acknowledging their own culpability. There would be no blame, accusations, and/or indictments of the opposing companies in this exchange. Meaningful acknowledgements from each company was an inextricable requirement for continuing the negotiation workshop. Separate breakout conference rooms were provided so each group could develop the acknowledgements in private.
I went from group to group throughout the rest of that day and into the evening, providing structure and facilitation to guide them through the process. By the end of the day each group had developed revealing disclosures regarding ways in which they had contributed to the problems. Each group came to the workshop firmly convinced their adversarial counterparts were the sole perpetrators of incompetent actions and/or devious intent. They were astounded as their own list of acknowledgements evolved, realizing that their perceptions and reactions had contributed significantly to the problems and then helped escalate those problems into a total breakdown. The process of developing acknowledgements was painful but it became the catalyst that turned the situation around.
Each group confessed their culpability to the collective assembly the next morning. As before, the listeners agreed not to comment or respond in any way. This restraint was strictly adhered to.
The disclosures and accepting of responsibility by each group dramatically changed the mood of the participants. Lunch that day was palpably more civil and communicative than it had been the day before.
Following the disclosures, and from that point on, we focused exclusively on creating solutions that would resolve the obstacles and resume construction. As before, I provided the structure and a methodology for collaboratively developing realistic and implementable action plans.
By the afternoon of the third day, the group had developed a comprehensive plan for neutralizing the roadblocks and completing the construction that was fully endorsed by all parties.
The participants formed a three-person steering committee with a member from each company. They charged the team with oversight responsibilities and the authority to co-facilitate the implementation of the new construction plan. They also empowered the team to maintain an unflinching adherence from all participants to collaboration and constructive communication until the construction was completed and the refinery was fully operational.
Each of the executives signed written commitments to accept responsibility for on-time achievement of specific steps in the overall action plan. Further, each executive agreed to make sure that their employees cooperated fully in their interactions with the other company employees and to expeditiously perform their roles in support of the revised construction plan.
The construction project resumed. Every employee involved in any level of decision-making and/or interaction with employees of the other participating companies was admonished to work the remainder of the project at a high level of cooperation. Some could not do so and were replaced.
Over the next few months, for the most part, collaboration replaced adversarialism. Compatibility replaced acrimony. Respect replaced distorted and inflamed misperceptions. Commitment to a mutually advantageous outcome replaced gouging and retaliation. The project regained the time that had been lost during the shutdown, finishing on time and within budget.
The oil company and the construction company became partners in many more huge projects in the following years.