Understanding Owner Motivations
Tags: General Contractors, Groundbreak 2020, Real Estate, Specialty Contractors, Construction

By Grant Cameron

General and specialty contractors can make themselves indispensable to construction project owners by being upfront and crystal clear about issues that could potentially threaten budgets and schedules. That was one of several key takeaways from “Understanding the Owner’s Motivations and Concerns on Construction Projects,” a session recently featured at Procore’s Groundbreak 2020 conference.

While a two-week delay might be unwelcome news to an owner, a contractor who provides the straight goods and thoughts on how that time might be recovered becomes an ally to solving the problem.

“Owners are sophisticated businesses and they’re used to dealing with risk, they can take bad news,” said Scott Nyborg, Procore’s Senior Trainer, Construction Education and one of the session’s speakers. “It’s way more valuable to the owner that you be straight about reality. If you really want to add value, pair that unflinching transparency with solution proposals.”

Add Value by Speaking Up

When you show up as the owner’s most valued resource for tackling issues, it will likely guarantee you future business.

“Ultimately you’ll be top of mind for the next project and word of that kind of performance will definitely get around to other owners as well,” said Zachary Reiss-Davis, Procore’s Senior Manager, Product Marketing and the session’s co-speaker.

Fostering close and more collaborative relationships with project owners is also key. The relationship building could begin as early as the lead-up to the bid opportunity.

Circle of Concern

Where project outcomes hinge on the successful collaboration of lots of different stakeholders, we must recognize everyone has a different circle of concern. There’s overlap, sure, between what a GC, a specialty contractor, an architect, or the owner cares about. Everyone wants the project to be a success, but how they define that success varies. Our goal is to better understand the owner circle of concern.

The owner’s circle of concern is not bound by the project. Why? Well, first of all, the owner’s motivation for the project came out of some business need. “The project fits into a larger context of what the owner is trying to accomplish,” explained Nyborg.

Understanding Who the Owner Is

Also important, experts say, is understanding that an owner of a construction project can be any entity that commissions, or puts a project into motion, and pays for it. It’s not unusual for owners to leverage external funds, or other people’s money, to pay for construction.

“We all care about staying on time and we all care about staying on budget, but at the end of the day, those are risks that accrue to the owner,” Reiss-Davis explained. “If the job shuts down for two weeks because of bad weather it sucks for all of us but the owner literally pays for it. When other stakeholders experience something as cumbersome, the owner often experiences it as expensive.”

There are four main kinds of construction owners; corporations, real estate, civic services, and government. The universe of owners is further divided into the private sector and the public sector.

Owners have three primary areas of responsibility: portfolio responsibilities such as capital planning and source planning, asset responsibilities like operations/maintenance and capital improvements, and finally project responsibilities such as managing risk and accepting work. While general and specialty contractors might have different areas of concern, project owners — whether private or public — must keep an eye on the big picture and the finished product.

“Owners come in many different flavors… when you realize how many different kinds of owners there are it might be hard to say that they all care about any one thing but actually, there’s a lot of really important common ground,” said Zach Reiss-Davis.

Aside from the complete project itself, the data left with an owner is probably the most valuable thing a contractor can give them. Procore can help by providing a mature and robust construction management toolset and by connecting everyone in the industry on a single platform.