Tuesday, September 25, 2012

How much does your building cost, Mr. Designer?

I recently watched the remarkable documentary: How much does your building weigh, Mr. Foster?

Led by a singular vision and determined rigor, for the last 30 years Norman Foster's practice has been at the nexus of innovation and aesthetics in architecture. Not only has he grasped with unusual clarity the multi-dimensional problems raised by modern urban development, but he has also consistently delivered design that is aligned with his client's goals.

In the movie, as we marvel at his mastery of the design process and his use of new light-weight materials at the Sainsbury Centre for Visual Arts, we are caught in a wonderful twist when Buckminster Fuller, the Yoda of the built environment, asks the Architect one of his incisive questions: "So, how much does your building weigh, Mr. Foster?".

The Architect did not have the answer, but once he found it, this insight was incorporated into his process and became another critical variable of design: an additional element of value to clients that seek his firm's expertise.

As I watched this, I thought of another critical question which so often turns designers and building consultants into masters of evasion:  "So, how much does your project cost, Mr. Designer?"

I do believe that it is the role of the design professional to challenge the Client's assumption, all of them, without exception. Clients, whether they are owners, developers or investors allocate a portion of their budget to hire talented and experienced consultants with the expectation that they will contribute to achieve or exceed the project return on investment. The perception of value will be ever greater the more the client feels that the consultants are sitting on his side of the table, looking at the problem with the same set of eyes, although with a different set of tools.  

It is a reality that increasingly fragmented technical disciplines dilate costs estimates to wide intervals that leave too much uncertainty in the project, and result in extensions of the decision-making timeline. This in turn increases the project costs for the consultants and initiates a spiral of negative value sometimes as early as the schematic phase of the project.

Integrated Project Delivery (IPD), a collaborative process between all consultants to optimize project results, is beginning to address this problem, but it is taking time to reach the base of the design services pyramid. Even in robustly managed projects, I have seen design solutions advance well beyond design development before cost assessments become an objective element of project management. Why do I think this happens?

  • Maybe the client feels that it might constrain the creative impulses of consultants while they are focused on the conceptual aspects of the project?
  • Or maybe project managers believe that strong concepts can always be budgeted down, but that budget-conscious designs can't be upgraded successfully?
  • Or maybe designers are all too aware of the fact that when design documents are sent out to bid they will be inevitably simplified, and they pursue high-level concepts regardless as long as someone else is paying for their time?
  • Or maybe the coordination of work between disciplines during the schematic phase is always seen as too time-consuming and ineffective?

These are all issues that PMs commonly address as part of project risk management, but in reality they are also the result of each consultant's very narrow view of their own scope and financial performance on the project. 

Until IPD becomes more commonly used, I believe that managing projects with a higher degree of effectiveness can begin with an improvement of communication and the implementation of a simplified set of tools. None of these notions are new for seasoned professionals, but I find that they often elude decision makers and less discerning consultants. An increased effort to communicate them can vastly improve project efficiency, especially in property renovations where the sequencing of activities presents more complex challenges than in new construction.

These are a few initiatives that I believe can improve project cost management:

  • As many consultants as possible should be simultaneously involved at a very early stage, instead of staggering the appointments based on when the information will be  needed. This will reduce scope gaps, and eliminate empty layers of accountability. It requires some front-loading of soft-costs, but the impact in ROI is more likely positive than not. 
  • Designers particularly must develop an ability to communicate the value in pursuing alternative solutions and in exploring innovative ways of approaching the building problem. This can result in constructive discussions with the client in regards to the deployment of project funds, and replace the often inaccurate use of benchmark percentages in budget allocation with more rigorous scope-specific budgeting.
  • Explore collaborative platforms to manage communication and documentation. The cash-flow limitations that prevent many firms from investing in robust technologies, as well as the numerous international projects that integrate first world consultants collaborating in emerging economies with local partners mean that the use of full-blown BIM to achieve documentation consistency is still some time away. There are numerous cost-effective cloud-based technologies available to increase the intensity, timeliness and depth of communication between consultants. Setting-up project-specific media rich networking tools based on existing social media platforms, coupled with equally inexpensive video-conferencing tools is not complicated. But it does require a disciplined process and the implementation of strict quality control and quality assurance guidelines. I also find that this is an area where the millenial generation can become extremely valuable, and where their intuitive understanding of these tools can be leveraged to increase their sense of accountability and commitment to projects and to professional services firms.
  • Transparency in project cost analysis. The complaint from Clients about consultant's inability to stay on budget is as common as the complaint from consultants that they don't have access to the project's evolving budget. In an age where business intelligence is so pervasive to most organizations even with the most basic accounting applications, it surprises me that so few projects have real-time budget dashboards. Regular updates of budget allocation by discipline with high-level values and reviews via web-conferencing could easily allow consultants to adjust their designs and documentation in real-time, before too many hours are spent proceeding in abortive directions, which consume both the client's and the consultants resources unnecessarily.

By implementing a few of these principles, and mostly if appropriate time is applied to communicating their importance to the project team, I think consultants will be in a better place to answer the dreaded question, and probably their projects will be more profitable.