Contracts Are Part of the Production System

A project can run collaborative planning workshops every week and still be structurally adversarial.

Why?

Because operating behaviour does not exist independently of the commercial environment.

If the contract rewards parties for protecting local positions, transferring risk and maximising individual outcomes, the project cannot simply workshop its way into system optimisation.

The commercial model is part of the production system.

That does not mean every project needs an alliance or an integrated project delivery contract. Different risk profiles require different delivery strategies.

It does mean that the project should consciously examine whether the contractual architecture supports or obstructs the production behaviour it wants.

Consider a simple example.

A production system may benefit from early supplier involvement so that fabrication, logistics, installation sequence and design can be developed together.

But if the procurement model delays supplier engagement until design is substantially complete, the system has already removed much of that opportunity.

Likewise, the project may want teams to expose constraints early.

But if the culture and commercial environment punish the first organisation that identifies a problem, the rational behaviour is to protect information.

The formal contract and the informal behavioural contract both matter.

This is one reason we believe any future Project Production Operating System must extend beyond planning and site execution.

Production performance is affected by strategy, governance, decision rights, risk allocation, procurement, incentives and culture.

The contract does not sit outside the production system.

It programs part of its behaviour.

The challenge is therefore not to prescribe one 'perfect' contract.

It is to establish a design test:

Does the commercial system make the desired production behaviour easier—or harder?

That question belongs at the beginning of a project, not after relationships have broken down.

If you’re rethinking how your commercial model supports—or undermines—collaborative delivery, we’d welcome a confidential conversation about the PPOS founding-project group.