20. 2 Camps
Finding the New Normal
or
Hoping for the Old Normal
Thursday, April 29, 2010
21. Common Phrases
80 Websites Industry Leader
Strive for Excellence
A Bunch of Marquis Clients
• 6 Mention Sustainability World Leading
• 3 Use Social Networking Highest Quality
Leading Provider
• 2 Made me Smarter We have Values
• 1 Provided a Blog We started in a garage in 19...
• 1 Mentioned the iPad PS: Get Rid of Flash!
Thursday, April 29, 2010
22. AV Trends
• Scope Blur
• Commoditization
• Prefabrication
• Telepresence and
new competitors
• Margin Erosion
Thursday, April 29, 2010
25. The Bid Game vs. Project Success Factors
• The bid ≠ the business case
• Negative correlation between low bid
and final cost
• Dilution of commitment
• Winner’s curse
• Bidding is not apples-to-apples
• Cost of bidding gets recouped
• Fallacy of value engineering
• What does the bidder actually win?
• Campaign vs. Govern
• Romance vs. Marriage
Thursday, April 29, 2010
26. How Do We Force Projects to Behave?
•Fragmented
•Silo’d
•Linear/Sequential
•Hierarchical Owner
•Adversarial
•Scope Based
•Anticipates Litigation
•Low Price / Bid
Thursday, April 29, 2010
31. How do Real Project Behave?
•Complex
•Relational
•Require trust
•Need tight coordination
•Fluid
•Interactive
•A system
•A discovery process
Thursday, April 29, 2010
32. Results of a Broken System
• $300-$500 billion annual WASTE
(buildingSmartAlliance)
• 50%+ Waste in the System
(buildingSmartAlliance and Lean Construction Institute)
• 70% Over Budget and Late
(Egan report)
• 48% of Green House Gases
(Energy Info Admin Statistics and Pew Climate report)
Thursday, April 29, 2010
33. Uncovering the Hidden Waste
• Labor = 50% @ 30% efficiency = 35% waste
• Materials = 40% @ 70% efficiency = 12% waste
• QTO = up to10% of the cost
• Bidding = 5%+ of the cost of a project
• Change orders between 2-10% of the cost
• Contingencies up to 7%
• Team Learning Curve = 5%
• 3-7% is lost in project cost reduction by not
maximizing Construction Tax Planning
Thursday, April 29, 2010
34. New Operating Principles (imperatives)
Thought Leadership
By-Products to Products
Integrated Teams
Trust
No Waste
Owner Value Language
Brand Promise
Thursday, April 29, 2010
42. The ROI of Trust
• Warren Buffet: Handshake deal for McLean
• LogicaCMG study of 1200 contracts: 20% to
40% difference on service, quality & cost
• Profitable Partnering for Lean Construction:
strategic partnering delivers up to 30% in
cost savings of construction
• Speed of Trust: distrust creates a 50% tax
on work
• Edelman Trust Barometer: 20% higher ROI
over a 10 year period
Thursday, April 29, 2010
43. Trust: Deficit to Dividend
Trust Balance -40% -20% Neutral 20% 40%
Environment Stressful Worry No worries Positive Uplifting
Focus Pre-emption Process Scope Outcome Mutual success
Relationships Disrespect Indifferent Cordial Cooperative Collaborative
Process Hidden Chain of Task at hand Keeping Making it easier
agendas command promises for others
Behavior CYA Do my job Respect Partnering Transparency
Outcomes Politics Slow Efficient Learn from Improve
mistakes
Systems Distracting Hassle Does not get in Supportive Adaptive
the way
Ethics Self-interest Compliance What is What is right What is good
expected
Thursday, April 29, 2010
44. NO Waste - Sutter Health & DPR
10% under budget
$1 million a bed
6 months early
$1000 per square foot
6 RFIs MEP
Thursday, April 29, 2010
45. The Value of
a Promise
Guaranteed Price
Guaranteed Move-in Date
No Change Orders
2-Year Warranty
1 Page Contract
Thursday, April 29, 2010
47. Call To Action
•Develop a Digital Mindset and Tools
•Design Resilient and Adaptable Organizations
•Make Way and Leverage This Next Generation
•Use Upstream Thinking to Get In Earlier and Higher
•What By-Products of Your Work Can Become Products?
•Don’t Miss the IPD, BIM and Reliable Results Wave
•Begin Building Teams that Integrate the Supply Chain
•Learn to Speak to Owners in Terms They Care About
•There is an ROI for Trust. Can you Measure Yours?
•Is Your Brand Promise Clear, Reliable and Truly Valuable?
•Begin to Develop Strategic Foresight to Navigate Change
Thursday, April 29, 2010
48. rmiller@tagconsulting.org
214-498-3055
•Speaking
•Strengths Based Leadership and Coaching
•Building Resilient and Adaptable Organizations
•IPD Strategies and Implementation
•Market Repositioning
•Creating Integrated Alliances
•Business Development
•Change Management
Thursday, April 29, 2010
