Research Report

We used the Grounded Theory Method to collect and analyse information on error in the UK construction industry, the causes of error and the methods used for avoiding error. The analysis of the data collected identified the areas of work in which error is financially most significant, the financially most significant causes of error and the most effective methods for avoiding error and minimising the consequences of error.

We used the Delphi Method to rank the results of the Grounded Theory Method analysis and to assess the relative financial impact of:

– The direct costs of error,

– The indirect costs of error,

– Latent defects and

– Unrecorded process waste.

The Delphi Method was also used to identify the most effective methods of reducing the financial impact of error in the construction industry. An anonymous online survey of construction industry professionals was used to assess the results of the ranking analyses completed using the Delphi Method. If there were large divergences between the rankings arising from the Delphi Method analysis and the online survey this might indicate that the Delphi Method results are not representative of the view of the wider industry.

A Literature Review was completed and the results are compared with the findings of the Grounded Theory and the Delphi Method analyses. The Literature Review also provided an approximate value of the direct costs of error as a percentage of the total cost of construction. This figure was used in combination with the results of the Delphi Method analysis to estimate the total financial cost of error in the UK construction industry. The results of the above were used to inform development of a strategy to reduce error in the UK construction industry and to address deficiencies in skills within the UK construction industry. The Steering Group provided guidance throughout this phase of the Get It Right Initiative.

4.1. The steering group

The steering group met five times. Its key role was to act as a sounding board to the results of the research at each stage and to inform the next stage of research. The steering group members were the participants in the Delphi Method analyses.

The steering group discussions were conducted on the basis no information would be published that would allow any opinion, error, defect, error incidence rate or defect incidence rate to be linked to a particular company or individual.

The members of the Steering Group are listed in Section 1 of this report.

4.2. Collection and Analysis of Information using the Grounded Theory Method

We have adopted a version of the “Grounded Theory” research method for this project. Rather than a classical research approach where you postulate a hypothesis and then attempt to prove or disprove it, the Grounded Theory Method sets questions and then attempts through investigation to identify the most plausible answers.

Our research questions were:
• What are the principal systemic errors in the UK construction industry?
• What are the causes of error in the UK construction industry?
• What are methods used to capture information about the financial cost of error in the UK construction industry?
• What are the most effective methods for avoiding error and minimising the consequences of error?

We used three methods to collect data:

• A workshop with the steering group,
• Structured interviews with the members of the steering group and a number of other companies in the sector;
• Collection of quantitative data relating to individual error occurrences. This included:

• A descriptions of each of the errors,
  A description of the causes of each of the error occurrences,
  An assessment of the financial cost of each of the error occurrences.
  This information was collected from the participants in the structured interviews.

The data was analysed by the Get It Right Initiative team as it was collected. The emerging findings were discussed in steering group meetings to draw on the expertise of the Steering Group members for the identification of theories. The structured interviews were completed, and the quantitative data was collected on the basis that no information would be published that would allow any opinion, error, defect, error incidence rate or defect incidence rate to be linked to a particular company or individual.

The structured interviews were conducted with the following nineteen companies:
Alinea Consulting (Cost Consultant)
Anglian Water (Client)
BAM Nuttall (Main Contractor)
Berkeley Group (Main Contractor)
Byrne Group (Trade Contractor)
Carillion (Main Contractor)
Costain (Main Contractor)
GRAHAM Construction (Main Contractor)
Keltbray (Trade Contractor)
Prater Limited – Lindner UK Group (Trade Contractor)
Scotch Partners (Designer)
Sir Robert McAlpine (Main Contractor)
Southern Water (Client)
Stanhope (Client)
Taylor Woodrow (Main Contractor)
Wates (Main Contractor)

4.3. Analysis of the Grounded Theory results using the Delphi Method

The Delphi Method is a system for achieving well considered consensus among experts. In the Delphi Method a group of experts anonymously reply to questionnaires and subsequently receive feedback of the ‘group response’. After the feedback the experts again anonymously reply to questionnaires. The process is repeated until a predefined stop criterion is achieved. Thus, experts are encouraged to revise their earlier answers in the light of the replies of other members of their panel. It is intended that during this process the range of the answers will decrease, and the group will converge towards the “correct” answer. We used the Delphi Method to rank the results of the Grounded Theory Method analysis and to assess the relative financial impact of:

– The direct costs of error,

– The indirect costs of error,

– Latent defects and

– Unrecorded process waste.

The Delphi Method was also used to identify the most effective methods of reducing the financial impact of error in the construction industry.

The panel of experts was made up of the following members of the Steering Group:

David Anderson, Head of Business Process & Quality, BAM Nuttall
Damian Leydon, Operations Director, Berkeley Group
Howard Tinkler, Quality & Compliance Director, Carillion
Paul Cannon, Commercial Manager, Carillion
Clive Loosemore, Project Director, Costain
David Ansell, Associate Director, Prater
Ian Kirkaldy, Chief Engineer, Southern Water
Barrie Nightingale, Director, T. Clarke
Emma McNab, Business Excellence Manager, Taylor Woodrow
John Shannon, Programme Director, Wates

Members of the Research Team acted as the facilitators.

The experts anonymously answered four questions:

The first question entailed ranking the areas of work which had been identified by the Grounded Theory Method as being the areas where error has a significant financial impact. The experts were asked to rank the areas of work according to their assessment of the financial impact of error in each of the areas of work.

The second question required the experts to rank the root causes of error which had been identified by the Grounded Theory Method as having a significant financial impact. The experts were asked to rank the root causes of error according to their assessment of the financial impact of each of the root causes of error.

The third question asked the experts to assess the relative financial impact of: the direct costs of error, the indirect costs of error, latent defects and unrecorded process waste. In the fourth question the experts were asked first to assess how spend should be distributed across the areas of work to achieve the maximum reduction in the cost of error, and second to assess how spend should be allocated within each of the areas of work.

Each of the questions also asked the expert to identify:

• Whether the organisation that the expert works for is primarily a trade contractor, a main contractor, a designer or a client.

• Whether the work of the organisation that the expert works for relates primarily to Civil Engineering or Buildings.

On completion of the first round of answers to the four questions the group response was fed back to the experts. After a facilitated discussion of the group response the experts anonymously answered the same four questions.

Two rounds of answers to the questions was the predetermined stop criterion.

4.4. Assessment of the results of the ranking analysis completed using the Delphi Method

We used an anonymous online survey of construction industry professionals to assess the results of the ranking analyses completed using the Delphi Method. If there were large divergences between the rankings arising from the Delphi Method analysis and the online survey this might indicate that the Delphi Method results are not representative of the view of the wider industry.

A link to the questionnaire was circulated by members of the Steering Group to the contractors in their supply chain. A link to the questionnaire was also circulated by the Civil Engineering Contractors Association (CECA) to their members.

All questions were answered anonymously.

The survey first asked respondents to identify:

Whether the organisation that the respondent works for is primarily a trade contractor, a main contractor, a designer or a client.
Whether the work of the organisation that the respondent works for relates primarily to Civil Engineering or Buildings.

The respondents were then asked two questions

Q1. The first question entailed ranking the areas of work which had been identified by the Grounded Theory Method as being the areas where error has a significant financial impact.

The respondents were asked to rank the areas of work according to their assessment of the financial impact of error in each of the areas of work.

Q2. The second question required the respondents to rank the root causes of error which had been identified by the Grounded Theory Method as having a significant financial impact. The respondents were asked to rank the root causes of error according to their assessment of the financial impact of each of the root causes of error.

After completing the first and second questions respondents were invited to add discursive comment. The principal purpose of this section of the survey was to enable respondents to make comment if they felt that the items identified by the Grounded Theory Method failed to include financially significant factors.

The pages from the online questionnaire are included in Appendix A.

4.5. Literature Review

A literature review was completed in two phases. The purpose of the first phase of the literature review was to provide an awareness of the work which has been completed by others and ensure that the research team did not repeat work completed by others. The first phase of the literature review informed the initial discussions of the Steering Group in which the strategy for this phase of the Get It Right Initiative was agreed.

The second phase of the literature review was more detailed. The second phase of the literature review was used:

1. As a comparator for the results of the Delphi Method analysis. If there were large discrepancies between the rankings arising from the Delphi Method analysis and the results of previous studies this might indicate that the Delphi Method results are not representative of the view of the wider industry.

2. To inform the development of a strategy to reduce error in the UK construction industry and to address deficiencies in skills within the UK construction industry.

3. The Literature Review also provided an approximate value of the direct costs of error as a
percentage of the total cost of construction. This figure was used in combination with the results of the Delphi Method analysis to estimate the total financial cost of error in the UK construction industry.

The second phase of the literature review was not available until after the experts had answered the Delphi Method questions thus avoiding introducing concepts from the literature into the experts’ answers. The literature review is included in Appendix B.