Unlocking the potential of Sweden’s construction sector

Sweden’s work-life balance

On many fronts, Sweden is a desirable place to live and work: the country scores highly in global happiness surveys; its work-life balance is the envy of other nations, as is its high earning potential and strong social protections.

The country’s reputation as a pioneering innovation hub is also soaring. Consider this: in Stockholm, a city of less than one million people, there are more private start-ups valued at more than one billion dollars per person, than anywhere else on the planet.

Unsurprisingly, multinationals view Sweden as a highly attractive location for doing business. But, despite the country’s vibrant commercial culture, business is not always easy to do in Sweden, particularly when it comes to construction.

For outsiders embarking on building or infrastructure projects, the country’s processes, methodology and ways of thinking can be difficult to navigate. In our experience, this potential clash of cultures can hinder uptake of best practice: despite Sweden’s incredible business strengths, its construction sector has not fully unlocked the benefits of project control, oversight and transparency.

We can speculate on the cultural reasons for this. Swedish enterprises tend to be organised in a collaborative structure with flat hierarchies. Relationships are based on trust and built on long term foundations.

Complex project failures

There are many social benefits to fostering a trust-based culture: it tends to encourage a pleasant working environment that is low in conflict. But this can also lead to problems. You might think that such environments would make people feel comfortable in engaging in vibrant debate. In our experience, this is not always the case as people feel reluctant to do anything that risks disrupting the harmonious atmosphere.

As a result, advisors often take costs and variations at face value, leaving them unchallenged. This has profound implications for the long-term health of complex projects.

In recent years, Sweden has experienced several major project failures. Although the reasons for this are undoubtedly complex, a lack of contract administration, inadequate cost control and poor management of contractor performance have been contributing factors.

The Karolinska hospital was delayed by more than two years and suffered a budget increase of more than 400 percent. In infrastructure, the E4 Bypass and the Mälaren Canal projects have had contracts terminated and suffered budget overruns or delays respectively, in part due to strained collaboration between local clients and international contractors.

New approaches to project delivery

Redefining the notion of trust is critical, as is a shift to working within the framework of a robust contract and the development of a well-defined execution plan.

It is important to invest time inducting clients into new approaches and ways of thinking on Swedish projects. The contractor also needs to understand the importance of documenting changes in order to manage risks.

Project execution can be streamlined through rigid project controls and, if the project is set up correctly, the data generated in even the most complex situations can be analysed against the trusted framework and used to provide analytical outputs.

This alignment enables us to proactively manage the live project status to our clients, and drive decision making from them. By taking this educational approach, we see that the ‘fear of the unknown’ dissipates, and we deliver the project as a unified team.

This approach has successfully been used in the delivery of both real estate and infrastructure delivery. Clients that have benefited from this approach include Zurich Insurance and Mojang.

Market opportunities

With a number of major infrastructure projects in the pipeline, including road, rail and airport improvement works, the potential for those who want to venture into the Swedish market is huge. International collaboration is essential, as the local sector does not have enough capacity to deliver on its own.

Sweden produces some of the world’s most sought after technology – from healthcare innovation to the phenomenally successful Spotify app.

This kind of smooth end-user experience should be transferred to the construction sector. Instead of relying too much on trust, clients should strive for process, transparency and discipline.