Spreading proven practices for managing building projects

Abstract

How much more and better will building-project managers get done faster with less? Continuous advances involve expectations and pitfalls. Momentum is growing for industry agreement and guidance about lead roles, realistic project and business objectives, and alternative management practices – especially for owners – right from the concept stage of “whole projects”. The crucial role of the (Project) Owner obviously covers the responsibilities to initiate, define, organize and fund the project. However, the difficulties to be faced are not so obvious. These lead activities have to be carried out as a composite undertaking, done in a timely manner, and verified as complete.. Project managers, and managers of design and construction, whether as employees or contractors of Owners, can serve the industry, and therefore the public, by advocating sound practices to Owners. The practices are needed for the full span of time from when a project is first conceived until it is in use. The advocacy is more effective if it has the authority of a proven and explicit methodology, and a consistent message from industry associations.

Exhibit 1: Project Success

Introduction

Management practices, proven and documented in the building industry, feature two main management objectives for the initial formative stages of projects:

• an effective, capable, well led and broad-based Lead Team, with appropriate Owner involvement,
• a comprehensive, realistic, timely plan for the whole project and for the subsequent building life.

With the first of these in place before project development, and the second before final design and construction, the problems typically faced during construction will be greatly reduced. This paper reflects a clear consensus among those in the British Columbia (“BC”) building industry involved in preparing a provincial guideline, Management of Building Projects. The guideline's emphasis on the initial project stages and their effects on final design and construction also responds to a lack of published guidance for starting building projects. The objectives of building functionality, durability, safety and aesthetics are complex. Frequently, they have to be achieved under pressures of cost limitations and demanding construction completion dates. However, the groundwork is laid, or not, in the project development stage.

There is a challenge for the many associations whose members are involved in project management to collaborate in publishing industry guidelines to integrate roles, stages and management practices for projects in their jurisdiction.

Exhibit 2: The Origin, Process and Result of a Building-Project

Disconnects and Fragmentation

Fundamental disconnects – that have little visibility during construction – often exist between:

• the Owner's aspirations when initiating a project and its objectives,
• the Owner's cost limits, whether or not well-defined,
• the actual preparations that develop the scope and management of the project.

The reasons for the disconnects can be understood by reference to Exhibit 2. Of course, every prospective Project Owner expects to have overall control. Yet many Owners have direct experiences of few building-projects and do not realize the importance and difficulty the translating a business or public service goal into a project methodology. Planning, design and construction responsibilities and risks are not always assigned at the right times to people capable of managing them! An effective translation is essential for project planning to have a good start and develop the foundation for design and construction to be managed successfully, culminating in a building that fits its purpose and lasts. If the importance of a comprehensive beginning is under-rated, fragmentation may be entrenched, resulting in disconnects among project roles, disciplines and stages.

Few Owners without specifically experienced staff would undertake management of design or construction, but it is not intuitively obvious that equivalent experience is needed to manage the project as a whole. It may seem sufficient for the project manager to have extensive experience of managing the Owner's business.

Frequent roots and symptoms of disconnects between planning and long term value lie in an emphasis on making plans and decisions only with the help of the specialties that are immediately and obviously essential. This minimizes costs until the project is approved, but is likely to cause a continuing ad hoc approach to decision-making. Other roots and symptom lie in the entrenching of a “least-first-cost” approach, by which a building is designed to minimum standards, contracts are awarded with low price as the dominant criterion., and services are minimized that are needed to assure the required quality during planning, design and construction.

There may be nobody effectively assigned to be in charge of the project as a whole – nobody to integrate the project planning and the optimizing of the longer term results from project design, for construction and operation. The disconnect is not always obvious, because many consequences do not come into view until construction or operation are under way, by which time root causes can no longer be observed directly. For example, when tender drawings are incomplete the design professionals are apparently responsible, but the root cause may lie in pressures from the Owner to produce the design for a minimum of cost and in a minimum of time.

Fragmentation vs Teamwork

Exhibit 3: Elements of Teamwork

Globally, building-projects and the industry are often described as “fragmented”, by organizations including the PMI Design-Procurement-Construction Specific Interest Group⁵. This reflects a lack of coordination during construction, among the many trades and the many designers. There is often reliance on coordination among those supervising or doing the work, without any individual being in overall charge of the project or being assigned to make sure that coordination is comprehensive and effective.

Coordination is especially difficult when the project is “fast-tracked”. Done well, this process provides orderly sequential tendering and award of trade contracts; supported by equitable assignment of the risks involved. However, many projects are described as fast-tracked when merely done in a hurry, with many changes having to be made after contract award, because planning and design were poorly coordinated. Problems result during design and construction, with a low probability of a fully successful project.

The second element of the Exhibit 3 ties to the art of managing human resources. This is only one of the teamwork elements because project implementation relies not only on cooperation, but also on a responsibility hierarchy under which designs and instructions, once issued, are obeyed to the letter.

Team-players are called for on projects, yet the whole building process relies on command-and-control for scope definition, design instructions, schedule and completion requirements, and project control. There is often a disconnect between the co-operation needed to reach optimal multi-disciplinary decisions and predetermined unrealistic constraints on budget and schedule allowed for pre-determined requirements. When the scope of work, the budget and allowances, the funding, the schedule, and the organization are not all compatible, then project cohesion is threatened. The mix of consensus decisions and command-and-control instructions, and knowing how to combine the two, are essential to effective management of building-projects.

Teamwork is a major asset on a project and is part of the solution to fragmentation. It is a delusion to expect a high performance team among people who do not respect each other, or in a situation where assignments are confusing, or the organization is convoluted or the decision process unreliable,. Also, even if everything else is apparently “right”, if the motivations of the team members do not mutually fit, performance will be compromised. Any of these shortcomings may result in people blaming each other instead of constructively and co-operatively attacking problems. However, unlike quality, not everything has to be fully correct for there to be an effective team. There is much but limited truth to the saying that a good group of people will make any organization work, especially if they have successful experiences of working together on previous projects.

Each of the three negative factors – a fragmented organization, disconnects and a lack of teamwork – may be a root cause of poor coordination, or may be an intermediate result of the other two factors. Prevention of each of these three is best started at the outset of project planning.

Roles of the Project Owner

”The Owner has much responsibility and self-interest in hiring experienced Lead Team members to play critical roles, and greatly benefits by enabling them to work effectively towards the Project Objectives. The Owner sets the stage and provides the funding to:

• bring the right people onto the project when needed;
• enable the direction and involvement they need from the Owner;
• foster good working relationships among participants, resulting in effective decisions being made at the right times.”(BC Building Projects Committee, 2004, p vii).

The Owner should assign two initial roles:

• the Client, and
• the Project Director – the project manager who is assigned to be in charge of the whole project, so as to:
  • direct the project;
  • take the lead role on the Project Lead Team; (the other primary members are the Managers of Design and Construction, and the Client);
  • be accountable to the Client for the whole project.

The Client role can often be satisfactorily assigned to an experienced manager on the Owner's staff. An exception is when the Owner is an investor, such as a pension fund, when a development manager should be retained. However, the Project Director role is not so easily assigned, and should often be contracted out. This introduces a serious problem. The responsibilities and capabilities required to direct a project of any complexity are not well recognized in the industry. An inexperienced Owner will not find it easy to identify companies and individuals with the necessary competence. It is a “Catch 22” situation, Project Director appointments are needed to generate sufficient number of recognized Project Directors, and Project Directors have to be available before an Owner will make the role a lynchpin of a project organization.

Nevertheless, the required capabilities are more available than may seem obvious, with major obstacles being the expression of the competence required and the realization of the value of the role. The Project Director responsibilities and the corresponding capabilities, which are unlikely to be all with one individual, may be substantially delegated.

The Complexity and Scale of the Project

A building-project may deliver anything from a bare-shell warehouse to a hospital. Although the building process is universal, its complexity and scale are highly variable among projects. An apparently straightforward building involves more complexity than meets the eye to plan, design and construct it. The investment in planning and organizing the project, in terms of money and expertise, is highly variable. Management of the complexities is easier for a project that has many similarities with past projects and if many of the same people are involved.

It is in the Owner's interests to make an optimal investment in project organizing. Part of this is to set an organizational strategy that can be consistently followed throughout. The more complex and difficult the project, the greater is the justification for investment in teamwork and highly experienced people. The plans for implementing the project should select a methodology that reflects the challenge at hand. Key elements of the strategy and methodology are the assignment of the Project Director as a separate role or one combined with the Client role, the extent of direct Owner involvement, and the emphasis to be placed on project coordination.

The Project Director Role

“The main aspects of the Project Director role are to:

• appoint the Design Manager and Manager of Construction, and approve their contracts and invoices on behalf of the Owner;
• organize the project to reflect:
  • the Project Objectives and the Owner's internal organization;
  • effects from regulatory requirements including public safety and environmental protection;
  • specific uncertainties, problems and challenges in implementing the project and providing for a successful occupancy period;
  • the economic climate and the availability of resources;
  • decision and approval processes to enable control of the project;
• lead the planning and decision process and encourage teamwork throughout the project, to facilitate progress and reduce the number and extent of disputes;
• verify the Project Objectives – that they are mutually compatible and recognize risks, and that performance matches the resulting cost, schedule, and delivery plans;
• perform project direction responsibilities, or assign them to other members of the Project Lead Team, to:
  • direct the development of requirements and priorities;
  • manage project development;
  • periodically obtain a re-estimate of funding needs, hence avoiding a funding shortfall compared to the cash needs of the project;
  • oversee all management elements;
  • determine approvals required on behalf of the Owner, for design deliverables, contract awards, changes and payments, and accepting handover of the completed work;
• make sure that all responsibilities are fully assigned in a timely and cohesive manner to individuals/ companies with the qualifications, knowledge and competence to plan and carry out their work – including the ability to assess, manage and bear the financial consequences of the risks assigned;
• oversee assignments so that organizations and individuals are given the information, understanding and incentives to: determine, detail, coordinate and achieve requirements; and to coordinate with each other, throughout the project;
• obtain advice from the Design Manager as to the construction Quality Assurance needed, and make assignments accordingly; (Quality Assurance criteria for the design should be established as part of the Design Manager's assignment);
• determine the need for services: legal, cost planning, value management, or other specialists, and make assignments accordingly;
• confirm each stage of the project to be sufficiently progressed and to include sufficient planning for the remainder of the project, before the following stage is commenced; also, confirm that completion of deferred and deficient items is expedited;
• set conditions for re-assignment of responsibilities, including subcontracting, to assure that assignment criteria are met;
• coordinate with regulators through all project stages, for timely permits, approvals, and municipal requirements and charges for development.” (BC Building Projects Committee, 2004, p 118).

The above quote has similarities with the scope of services and fees for management of development, design and construction published by the Canadian Construction Association, as Document CCA 25². The above itemization of the Project Director role is intended to demonstrate its range role. I it is divided into separate pieces that are poorly coordinated, or some items are not specifically assigned, a major cause of fragmentation is activated.

A Project Failure and Agreement on Good Practice

The collapse of the “Station Square” supermarket parking-roof in Greater Vancouver, BC, Canada on its opening day in 1988 has had a major effect on engineering practice in the Province, and indirectly elsewhere. One of the concerns of the resulting Public Inquiry was bidding for professional service, especially the pricing pressure placed on the structural engineer. Another was fragmentation of the project, described by the structural engineer who sat on the Commission as “the convoluted lines of responsibility among owner, developer, prime consultant, architect, design engineer, contractors, and even the tenant (Jones, 1990, p. 14). This quote from the Inquiry Report is discussed on page 14 of the cover article in PMI's February 1990 PMnetwork magazine. The Commission attributed both of these concerns to the responsibilities of the Owner.

Recognizing that the collapse had management as well as technical causes, the Commission recommended a provincial manual of construction practice, as a guide to the management and performance of roles and responsibilities.

Authoritative Guidance

Eventually, in 2004, the recommendation for a manual was met when the specially formed BC Building Projects Committee published Management of Building Projects on behalf of the provincial building industry. This Practice Manual recommends proven practices, right from the start of each project. In keeping with the Commission's recommendation, the Manual was developed from a consensus process involving associations representing the roles listed in the above PMnetwork quote. It presents a sequential methodology for managing a project from start to finish, as well as providing comprehensive explanations of the ways in which projects and their parts are procured, and of the management and regulatory processes involved.

Long before construction begins, prudent and timely investments in planning and design expertise have to be made to justify and approve realistic performance objectives. This can only be achieved on complex projects by building an effective team of owner, consultants and construction advisors, and assuring that financing and organization steps support, not obstruct, this early investment. Major gains in the success of construction projects can be made by getting ready for construction starting with the Project Owner at the concept stage.

Pressures in the building industry to do more, better with less are certainly increasing, but a high order of results is nevertheless possible through good practice by people with solid, but not necessarily exceptional, capabilities – provided that the Project Owner sets the whole system in motion properly. There also needs to be resistance to setting unrealistic expectations, which predispose a project to failure in comparison to the expectations imposed.

Unfortunately, although the fundamentals of good practice have remained much the same over the years, the difficulties of recognizing and applying them in high pressure situations require substantive project leadership and management, by or on behalf of the Project Owner. Such leadership is not always brought into play, although it is a pre-requisite to project success, according to the Construction Extension to the PMBOK^® Guide (PMI, 2003).

A Methodology for Management of Building Projects

To be comprehensive and directly applicable, a methodology has to explain and tie together:

• proven practices specific to building-projects, using accepted industry terminology;
• roles and responsibilities for Owner, Design Professionals, Builders, Cost Planners and others;
• sequential practices for planning, design and construction, project direction and decision-making, the chain of authority and instructions, and teamwork among roles and disciplines;
• alternative methods for procurement of the whole project, and of its design and construction and the conditions that are suited to each method;
• project management processes – that are universal and scalable within the industry;
• methods for addressing regulatory requirements.

Exhibit 4: Three Management Perspectives

To enable advocacy of good practice by and for the industry, a methodology should preferably be published in the form of consensus guideline and issued or supported by the recognized industry associations.

Cost planners are included in the second point above because costs estimates for the Owner during project planning can become disconnected from the scope and quality requirements and the risks on which they should be based. Cost planners may be subjected to special pressures and constraints, either to predict costs at a low level to meet a preconceived budget, or at a high level to avoid overruns. There may be a constrained budget for the cost planning itself. Inappropriate or inadequate cost planning is often at the root of surprises that occur when bids are opened or costs overrun budget due to changes during construction.

A methodology has to cover the three elements of Exhibit 4 and explain practices for avoiding fragmentation and disconnects, and for securing teamwork instead.

Advocating Good Management Practice

The Strategic Plan of the PMI Design-Procurement-Construction Specific Interest Group includes the objective of “linking a fragmented industry by encouraging collaboration among industry organizations and promoting solid project management principles and practices for the entire team required to initiate, develop, design, and build capital projects.” – (PMI2005 p3). It is significant that it is the industry that is described as fragmented, not just projects within it.

Although the Construction Extension to the Project Management Body of Knowledge(PMI, 2003), developed by the Specific Interest Group, has “knowledge” in its title, it recommends a wide range of good practice:

• “scope planning should involve all the key players at all levels, the owner, the consultant the general contractor, sub-contractor and suppliers.” (PMI, 2003 p 27).
• “certain types of contracts require a high level of definition … for example Lump Sum Contracts. … If the necessary level of detail is not available … then [that] type should be eliminated [from the contract selection process].” (PMI, 2003 p 90).
• “for claim prevention … the contract scope and specifications should be written in clear unambiguous terms.” (PMI, 2003 p 129).

These quotations are typical of the document's recommendations and are also significant because they demonstrate agreement with other industry guidelines. For example, there is close alignment with the independently written BC (Building Projects Committee, 2004).

Each industry association represents a specific area of interest. There are many associations, at national and state/provincial levels, with a wide range of areas of interest. These are not easily aligned, especially where profit is a main ingredient. For example, associations representing owners who pay for services can have a conflicting interest with associations representing firms that are paid for the services, primarily architects, engineers and builders. It can be difficult to achieve substantial co-operation among associations on more than a specific-issue basis, for the reasons that follow.

• Activity in its area of specialization is typically a higher priority than inter-association co-operation in an association's strategic plan.
• For many associations, such as those representing owners, lawyers, accountants and insurers, interests are broader based than project issues, which may therefore be of low priority.
• There is a long history of conflict on construction projects between owners, consultants and builders, over quality, cost and progress, and this lessens confidence that substantive agreement on good management practice is achievable.

Nevertheless, co-operation among associations is increasing, aided by recognition that adversarial relations benefit none of the project participants in the long run. A prominent warning from the high costs and damaged relationships faced in project litigation is among the reasons for the development of more co-operative methods and contracts for project delivery. Various associations and multi-association construction documents committees are involved with these developments.

Advocacy for overall good practice across the industry requires the ingredients below.

• Recognized industry associations must have sufficient interest in co-operation for the benefit of the industry and therefore for themselves, in parallel with meeting their internal objectives for their members and the association's viability.
• Conviction as to the importance and possibility of influencing practice for the better must be shared by key associations, companies and individuals, and there must be sufficient consensus that is available or can be generated for an authoritative industry guideline.
• Comprehensive guidelines of recommended management practices must be published, including or referencing the requisite knowledge base, and the guidelines must be mutually consistent.
• The recommended practices must be published in a compact and compelling form.

The advocacy that is in progress in BC, and in Canada as a whole, corresponds to the above points as follows:

• Provincial associations in BC have continuous relations sufficient for a joint guideline to be contemplated.
• A widely held conviction that practices need to be improved and agreed was given impetus and focus by the Station Square collapse, and by the recommendations of the subsequent public inquiry.
• There was no prior multi-association manual of management practice. However, it was evident among the highly experienced practitioners who developed the BC Manual, that there is a high degree of consensus about how to manage building projects to meet appropriately defined objectives and to last. The consensus was apparent among Architects, Engineers, Project Managers and specialists, and, crucially, among several Owners that have a continuity of projects.
• It thus became possible to cover a full range of good practice in one industry-accepted manual (BC Building Projects Committee, 2004).
• However, the requirement for full context and for compact and compelling presentation conflicted, especially for advocating good practice to Owners. A solution in progress is to prepare a 25-page.Canadian Guideline “Starting Building Projects”, to cover the early formative project stages and the Owner's role in setting the whole building process in motion properly. The aspiration is for 2007 publication or support by national counterparts of the associations that published or supported the BC Manual.

The Station Square collapse enabled the advocacy process in BC. Without this lesson, the coordination amongst multiple parties by a volunteer task force would not have been achieved. For another jurisdiction, a project failure should not be a pre-requisite to multi-association advocacy! The precedent experience of the Canadian publications and other multi-association ventures can lessen difficulties for similar undertakings elsewhere.

Building-project managers:

• bring diverse people together on projects,
• build effective teams, and
• meet challenging objectives under difficult constraints.

Equivalent objectives should be among those of associations that have project managers as members.