Partnering Magazine JulyAugust 2015

Issue 4 July/August 2015

The IPI awards issue The best of the best when it comes to collaboration

INSIDE: page 6

page 16

The End of Project Syndrome

The Productivity Gap In Construction

Delivering dynamic projects through trust, collaboration and partnership.

Wor ld-Cl as s Inno v ator s.

L andmark Buil dings.

Inspiring Per formance . www.henselphelps.com

CONTENTS INTERNATIONAL PARTNERING INSTITUTE IPI is a non-profit 501(c) 3 charitable organization that is funded by our members and supporters who wish to change the culture of construction from combative to collaborative.

Phone: (925) 447-9100

BOARD OF ADVISORS Larry Anderson, Anderson Partnering Pierre Bigras, PG&E Roddy Boggus, Parsons Brinckerhoff Pat Crosby, The Crosby Group Pete Davos, DeSilva Gates Construction Larry Eisenberg, Ovus Partners 360 Steve Francis, C.C. Myers, Inc. Michael Ghilotti, Ghilotti Bros, Inc. Richard Grabinski, Flatiron West, Inc. Randy Iwasaki, Contra Costa Trans. Authority Jeanne Kuttel, CA Dept. of Water Resources Mark Leja, Caltrans (Retired) John Martin, San Francisco International Airport Pete Matheson, Granite Construction Geoff Neumayr, San Francisco International Airport Jim Pappas, Hensel Phelps Construction Co. Zigmund Rubel, Aditazz Ivar Satero, San Francisco International Airport Stuart Seiden, County of Fresno Thomas Taylor, Webcor Builders David Thorman, CA Div. of the State Architect, Ret. John Thorsson, NCC Construction Sverige AB Len Vetrone, Skanska USA Building

Features July/August 2015 The IPI Awards Issue

6

Facilitator’s Corner

As your project comes to a close, be aware of items that have the potential to dismantle your Partnering efforts.

8

Partnering Awards IPI recognizes the best of the best when it comes to collaboration

Rob Reaugh, MDR

in construction—congratulations

Dana Paz

Winners!

20

Best Practices

Sue Dyer, MBA, MIPI, MDRF

International Partnering Institute 291 McLeod Street Livermore, CA 94559 Phone: (925) 447-9100 Email: ed@partneringinstitute.org www.partneringinstitute.org

Focus on rewarding behavioral change as a way to achieve your objectives.

to our 2015 Partnering Award

FOUNDER & CEO

EDITORIAL OFFICE: SUBSCRIPTIONS/ INFORMATION

4

Executive Director’s Report

EXECUTIVE DIRECTOR

ASSISTANT DIRECTOR

IN THIS ISSUE

16

Research Roundup The construction industry has

IPI Meta-Analysis Part III: The significance of the elements of Partnering and how they relate to one another.

lost productivity points since

DESIGN/CREATIVE

the 1960s—what can we do

Michelle Vejby Email: mvejby@msn.com

about it?

COPYRIGHT Partnering Magazine is published by the International Partnering Institute, 291 McLeod Street, Livermore, CA 94550. Six bi-monthly issues are published annually. Contents copyright 2014 International Partnering Institute, all rights reserved. Subscription rates for non-members, $75 for six electronic issues. Hard copy issues are available only to IPI members. Additional member subscriptions are $75 each for six issues.

Postmaster please send address changes to IPI, 291 McLeod Street, Livermore, CA 94550.

www.partneringinstitute.org

Cover photo: the IPI Partnering Awards Ceremony, held May 14, 2015 at the SFO International Airport Museum. Photography by Brian Wong Photography

July/August 2015 Partnering Magazine

3

EXECUTIVE DIRECTOR’S REPORT

Rob Reaugh, MDR IPI Executive Director

Stay Focused

I

generally on the rise, and the fastest

for collaborative culture change within

growing segment is in “programs to

your organization.

motivate specific behaviors” (up 16%

Other DOT’s with Partnering

since 2008). That being said, we have

recognition programs include the

a long way to go. Awards programs

Arizona Transportation Partnering

focused on “supporting a culture

Excellence Awards, which have

change” are used by only 18% of

been held by the Arizona DOT in

respondents to the survey. It is not yet

conjunction with contractors and other

a norm for organizations to develop

organizations since 2005; the three year

an awards program that is tied to a

old Ohio DOT Don Conoway Awards; the

specific cultural change initiative like

Maryland State Highway Administration

Partnering.

Partnering Award which was launched

The good news is that if your

in 2000; and the Nevada DOT Excellence

’m often reminded by one of my

organization would like to develop

in Partnering Award, which was

mentors to continually focus on the

a recognition program focused on

launched in 2009. Each of these

end-game. As we are developing

developing collaborative teams, there

Partnering Awards Programs require

new committees, educational

are a number of IPI-Member Owners

an application and are reviewed by

materials, and resources, I hear a little

who can share best practices from their

a panel of judges. The winners are

voice in my ear reminding me...“Rob,

own organization-wide Partnering

revealed in a formal setting and the

focus on the objectives!”

Awards Programs. The most mature

project team members are recognized

examples of internal recognition

by executive leadership from the

launched with the mission to change the

programs come from Departments

organization, which is crucial.

culture of construction from combative

of Transportation. Caltrans holds an

to collaborative. After 30 years of

annual Excellence in Partnering Awards

of the partnering movement and want

experience with partnering, we have

Program, which honors outstanding

to take your partnering program to

learned that behavior change is easier

project teams from each of Caltrans’

the next level, consider implementing

when we use carrots rather than sticks.

12 Districts who have successfully

an internal partnering recognition

In other words, recognition programs

implemented partnering tools. Since

program. It will help you publicly

that reward behavior change are the best

2012, the projects have saved more

demonstrate good collaborative

way to serve our objective of making

than $121 million from the engineer’s

behavior; the PM’s of projects that are

Collaborative Partnering the norm in

estimates—an astounding total for

highly successful will have a platform

the industry. This issue of Partnering

hard bid contracts! Caltrans also has

to rise within your organization; and

Magazine focuses on our IPI Award

an innovative District-wide Awards

you will be SERVING THE OBJECTIVES

Winners and the organizations who have

program for projects that are ongoing,

of your partnering program. Plus—the

championed Collaborative Partnering

called the Success in Motion Awards.

winners of your internal program

over the past year.

Most construction projects take years to

will be outstanding candidates for

build—so developing ways to recognize

the International IPI John L. Martin

“Trends in Employee Recognition” by

outstanding partnering practice is a

Partnered Projects of the Year. Get

World at Work, awards programs are

great way to support the ongoing push

involved and help the movement!

International Partnering Institute was

According to a 2013 study called

4

Partnering Magazine July/August 2015

Long story short—if you are a part

www.partneringinstitute.org

B U I L D I N G C A L I F O R N I A F O R S E V E N T Y- F I V E Y E A R S

PAVI NG

ROAD/ H IG HWAY

G RADI NG

DEMOLITION / EXCAVATI NG

INTERNATIONAL PARTNERING INSTITUTE JOHN L. MARTIN 2015 PARTNERED PROJECT OF THE YEAR - DIAMOND LEVEL SFO RUNWAYS 1-19s RSA IMPROVEMENTS WINNER OF THE 2014 CALTRANS EXCELLENCE IN PARTNERING AWARD “BEST IN CLASS” FOR PROJECTS GREATER THAN $50 MILLION Highway 65 Lincoln Bypass Project

11555 Dublin Boulevard, P.O. Box 2909, Dublin, California 94568-2909 925-829-9220 w w w . d e s i lva g at e s . c o m Contractors License No. 704195A

FACILITATOR’S CORNER

THE END-OF-PROJECT SYNDROME The Cause, and Solution

C

onstruction activities at the end of even the most successfully partnered projects have the potential to dismantle the desired cooperative alliance and project outcomes. Important project goals involving

quality, safety, schedule, fiscal responsibility, environmental impact, public relations, communication, conflict resolution and teamwork can be negatively impacted. Not all symptoms of this syndrome are overtly obvious. Some are more subtle and require additional vigilance on behalf of project leadership.

While the added stresses unique to the end of the project present challenges, they are also an opportunity for leadership to intervene and lessen their impact. Some of the things to look

THE SOLUTION: LEADERSHIP The leadership strategy for minimizing the impact of the end-of-project syndrome essentially involves an awareness of the symptoms, increasing site visits and strong influential leadership. Here are a few recommendations:

A. BE VIGILANT 1. Be alert to site level changes that produce unusual anger and frustration.

2. Look for any diminished quality or work and/or safety conditions.

for at the site as the project is winding down include:

3. Be aware of any rumors at the site and openly discuss and

•

4. Identify and communicate closely with those select site level

dispel any rumors that are untrue.

Waning Enthusiasm: As the project winds down, the work activities often evolve into the project’s “dog days,” involving mundane and repetitious punch list and finish work. The lack of enthusiasm for these activities can lead

•

good handle on the current emotions and feelings at the site.

5. Don’t subscribe to the “no news is good news” management

to diminished intensity, focus and concentration at a time

philosophy. Site level people are very good at masking

when the project needs to finish strong.

problems, especially those involving relationships.

Schedule Focus: At the end of the project, the schedule is often tight with negative, little or no float remaining. With

B. BE VISIBLE

the potential risk of liquidated damages, any delays such as

This is an ideal time to utilize the adage: ”You can’t lead from

changes, new work or rework can impact the critical path.

an office.” Leadership at this point in the project means getting

Attempts to accelerate construction to make up the schedule

face-to-face with what’s happening at the site.

can create even more stress and problems.

•

people present on all projects who always seem to have a

1. Step up one-on-one, face-to-face contact with site level

Stressful Team Relationships: Good working

workers. They will disclose undue stress and frustrations

relationships among site workers is one of the desired

when you sincerely ask in person, but will be reluctant to

outcomes of successful partnering. At the end of the project, workers at the site begin to experience a higher level of

make the time if they have to come to your office.

2. Keep a close tab on performance evaluations as they relate

anxiety and stress. The good rapport that characterized

to site level. Particularly, look for low numbers and negative

earlier relations becomes more hostile and adversarial,

comments in the relationship categories of communication,

causing unresolved conflicts, finger-pointing, blaming & complaining and a general CYA attitude.

conflict resolution and teamwork.

3. Keep soliciting input from site level people. Make your inquiry personal. Rather than ask: How are things going?

6

Partnering Magazine July/August 2015

www.partneringinstitute.org

make it personal by asking: How are things going for you? Is there anything you need? How can we make your job easier?

Then take the time to sincerely listen closely.

C. BE VIGOROUS This is the time for energetic, take charge and persuasive leadership. Don’t assume that site level problems will evolve favorably without sound leadership influence.

1. Emphasize That Schedule Problems Belong to the Team: Being on schedule is one of the most important goals of any project team. Prior to partnering, it was thought to be solely the contractor’s responsibility. Solid partnering dictates that the schedule belongs to the entire team, not just the contractor. This means having the entire team willing to go the extra mile in helping the contractor meet the schedule.

This could mean forming a cross-functional focus group to investigate all options, more planning meetings and tighter communication regarding the schedule.

2. Celebrate Success: While the end of a project leaves little time for larger formal events to celebrate milestones, mini celebrations can be had by catching people in the act of doing things right. Recognition is the magic elixir of human relations and goes a long way in restoring

Interstate 880/State Route 92 Interchange Reconstruction Hayward, CA 2012 IPI Partnered Project of the Year, Diamond Level

worker motivation and reducing stress and frustration.

3. Avoid Expression of Negative Feelings: Leadership should never express negative thoughts or emotions to site level workers. There are enough of these being generated at the site without having to deal with top down, managementoriginated negatives. Leaders should be a sounding board for subordinates, not conversely.

4. Subcontractor Coordination: Often it’s the subcontractors who carry the brunt of punch-list finish work; therefore they are key partners in how well the project finishes. Make sure

vigilance and visibility and vigorously taking appropriate steps to

As one of North America’s largest transportation and infrastructure contractors, our commitment to building the best is demonstrated in the projects we build and the partnerships we develop. Our success is dependent upon our relationships with owners, partners, designers, subcontractors and community members. Flatiron works closely with our partners to develop innovative solutions that benefit everyone, and we’re proud of what we’ve created together. The more than 20 partnering awards Flatiron has won in the past decade serve as recognition of these relationships and

alleviate the impact of the end-of-project-syndrome.

the resulting successful projects.

the prime contractor is maintaining close contact with their subs so they will have an open forum to discuss and resolve any issues or problems between trades.

Sometimes events at the end of a project that create extra sitelevel frustration and stress are inescapable. A strong finish can often make the difference between an undistinguished and an excellent project. The difference is often the responsibility of project leadership being forewarned and willing to step up their

Larry Miller, MIPI, President, Productivity Through People—Larry has facilitated more than fifteen hundred projects including hospitals, manufacturing facilities, transportation projects, dams and mechanical facilities, and has also led several internal strategic partnering initiatives. www.partneringinstitute.org

To learn more about Flatiron’s innovation in partnering visit

www.flatironcorp.com July/August 2015 Partnering Magazine

7

WINNERS

PARTNERING AWARDS

8

2015 IPI PARTNERING AWARDS ON MAY 14TH, 2015, IPI CELEBRATED ITS 6TH ANNUAL IPI PARTNERING AWARDS CEREMONY. OWNERS, CONTRACTORS, FACILITATORS, CMs, DESIGNERS, AND OTHER ASSOCIATED CONSTRUCTION PROFESSIONALS DEDICATED TO CONSTRUCTION CULTURE CHANGE, GATHERED AT THE SFO INTERNATIONAL AIRPORT MUSEUM TO CELEBRATE THE NATION’S MOST COLLABORATIVE ORGANIZATIONS AND PROJECT TEAMS. •

Total contracted work: $2,079,873,557

•

Total budget savings: $135,878,595.74 (7% average savings)

•

19/23 — ratio of jobs without a Time Loss Incident

•

15/23 — ratio of projects that came in on-time, or early

•

17/23 — ratio of projects completed on, or under, budget

•

There were 1403 Change Orders—but Zero Claims

BASED ON A SURVEY OF ALL 2013, 2014, AND 2015 IPI AWARD APPLICANTS: $1 SPENT ON PARTNERING LED TO $81 IN SAVINGS FOR THE PROJECT.

Partnering Magazine July/August 2015

www.partneringinstitute.org

2015 IPI INDUSTRY AWARDS:

Industry Awards honor organizations and individuals who have worked to make the industry more collaborative.

IPI PARTNERING CHAMPION San Francisco International Airport Design and Construction Division

The IPI Partnering Champion is IPI’s highest honor. This award recognizes the organization that embraces and models the IPI mission to develop high trust relationships and collaborative cultures over a long period of time. The San Francisco International Airport Design and Construction Department has been a leader in the industry, sharing Collaborative Partnering worldwide through

Working Together Towards Exceptional Project Outcomes

the aviation industry, the vertical construction industry and locally throughout the Bay Area. We are grateful for their service and support!

IPI CHAIRMAN’S AWARD J. Louise McGinnis Barber This award highlights an individual who has provided exceptional leadership and service to IPI and its members and who models the collaborative behavior at the core of IPI’s Mission.

cpmservices.com 415.543.6515

IPI Professional Facilitator Certifications Certified Professional Facilitator (25 sessions) •

Kurt Dettman, IPI, KDR Associates

Master Level Facilitators (250 sessions) •

Neal Flesner, MIPI, Ventura Consulting Group

•

Larry Miller, MIPI, Productivity Through People

Owners Who Adopted Collaborative Partnering in 2014 •

California Department of Water Resources

•

Michigan DOT

•

San Francisco Municipal Transportation Agency

•

San Francisco Port

•

San Francisco Public Works

•

San Francisco Recreation & Parks

www.partneringinstitute.org

July/August 2015 Partnering Magazine

9

PARTNERING AWARDS IPI PARTNERED PROJECTS OF THE YEAR:

IPI Partnered Projects of the Year honor project teams who have exhibited the highest levels of collaboration on projects completed in 2014.

St. Jude Medical Center Northwest Tower Project

VERTICAL BUILDING PROJECTS: $25M - $250M DIAMOND LEVEL St. Jude Medical Center Northwest Tower Project, Fullerton, CA Owner:

St. Joseph Health with Petra Integrated Construction Strategies

Prime:

McCarthy Building Companies, Inc.

Designer:

TAYLOR Design

Facilitator:

Bainbridge Consulting, LLC

Facilitator:

Ventura Consulting Group

RUBY LEVEL

DeWitt Nelson Correctional Annex

SFO West Field Cargo Redevelopment

DeWitt Nelson Correctional Annex Project, Stockton, CA Owner:

CA Department of Corrections

and Rehabilitation

Prime:

Hensel Phelps

Construction Co.

Designer:

Helmuth, Obata + Kassabaum

CM:

URS/Lend Lease

Facilitator:

OrgMetrics LLC

SFO West Field Cargo Redevelopment Project, San Francisco, CA Owner:

City and County of San

Francisco Airport Commission

Prime:

McCarthy Building Companies, Inc.

Designer:

Kwan Henmi Architecture and Planning, Inc.

CM:

The Allen Group, LLC

Facilitator:

OrgMetrics LLC

Connecticut College Boiler Plant Replacement Project

VERTICAL BUILDING PROJECTS: UNDER $25M SAPPHIRE LEVEL Connecticut College Boiler Plant Replacement Project, New London, CT Owner:

Connecticut College

Specialty

Prime:

KBE Building Corporation

Contractors: All State Construction, Inc.; Preferred Utilities

Designer:

RMF Engineering

10

Partnering Magazine July/August 2015

Manufacturing Corp.; Nosal Builders, Inc. www.partneringinstitute.org

TRANSPORTATION MEGA PROJECTS: $250M+

Denver Union Station Transit Improvements

DIAMOND LEVEL Denver Union Station Transit Improvements Project, Denver, CO Owner:

Denver Union Station Project Authority (DUSPA)

Owner:

Regional Transportation District (RTD)

Owner:

City and County of Denver

Prime:

Kiewit Infrastructure Co.

Designer:

AECOM

Designer: SOM Facilitator:

FMI Corporation

SAPPHIRE LEVEL

BART Oakland International Airport Connector

BART Oakland International Airport Connector Project, Oakland, CA Owner:

San Francisco Bay Area Rapid Transit District (BART)

Prime:

Flatiron West, Inc. / Parsons A Joint Venture

Designer:

Parsons Transporation Group

Facilitator:

Pinnacle Leadership Group

TRANSPORTATION PROJECTS: $25M - $250M DIAMOND LEVEL

SFO Runways 1-19s RSA Improvements

SFO Runways 1-19s RSA Improvements Project, San Francisco, CA Owner:

City and County of San Francisco Airport Commission

Prime:

Golden Gate Constructors (DeSilva Gates Construction

and Graniterock JV)

Designer:

AECOM with Lean Photometrics

CM:

Parsons Brinckerhoff with assistance from

Cooper Pugeda Management

Subcontractor: Royal Electric Company Facilitator:

OrgMetrics LLC

IN 2015, IPI AWARD-WINNING PROJECTS SAVED $136 MILLION FROM THE ENGINEERS’ ESTIMATES —THAT’S AN AVER AGE SAVINGS OF 7%!

www.partneringinstitute.org

July/August 2015 Partnering Magazine

11

PARTNERING AWARDS TRANSPORTATION PROJECTS: $25M - $250M

Highway 65 Lincoln Bypass Project

RUBY LEVEL Highway 65 Lincoln Bypass Project, Lincoln, CA Owner:

State of California Department of Transportation

Prime:

DeSilva Gates FCI, Joint Venture

Facilitator:

OrgMetrics LLC

I-80 Carlin Tunnels Improvement Project

I-80 Carlin Tunnels Improvement Project, Carlin, NV Owner:

Nevada Department of Transportation

Prime:

Q&D Construction, Inc.

Facilitator:

Ventura Consulting Group

I-96 Rehabilitation Project “96fix”

Nelsonville Bypass Project

SAPPHIRE LEVEL I-96 Rehabilitation Project “96fix,” Livonia, MI Owner:

Michigan Department of Transportation

Prime:

Dan’s Excavating, Inc.

Facilitator:

Anderson Partnering

Nelsonville Bypass Project, Hocking, OH Owner:

Ohio Department of Transportation

Prime:

The Beaver Excavating Company

Sand Creek Interchange and 4-Lane Widening Project, Antioch and Brentwood, CA Owner:

Contra Costa Transportation Authority

Prime:

Bay Cities / Myers A Joint Venture

Designer:

Mark Thomas and Company

CM:

Parsons Brinckerhoff

Facilitator:

GLA Corp.

12

Partnering Magazine July/August July/August2015 2015

Sand Creek Interchange and 4-Lane Widening

www.partneringinstitute.org

PARTNERING AWARDS THANK YOU TO OUR 2015 EVENT SPONSORS!

www.partneringinstitute.org

July/August 2015 Partnering Magazine

13

I-10 Perryville T1 Design-Build Project

PARTNERING AWARDS TRANSPORTATION PROJECTS: UNDER $25M DIAMOND LEVEL I-10 Perryville T1 Design-Build Project, Goodyear and Buckeye, AZ Owner:

Arizona Department of Transportation

Prime:

Skanska USA Civil

Designer:

Gannett Fleming

RUBY LEVEL Route 110 Auxiliary Lane Project, Los Angeles, CA Owner:

Caltrans District 7

Prime:

Flatiron Construction Corporation

Facilitator:

GLA Corp.

Route 110 Auxiliary Lane Project

Santa Rosa Ave. Widening Project, Santa Rosa, CA Owner:

City of Santa Rosa

Prime:

Ghilotti Bros., Inc. - TerraCon Pipelines, Inc. JV

Facilitator:

GLA Corp.

La Cholla Boulevard Project,

La Cholla Boulevard Project

Santa Rosa Avenue Widening Project

Pima County, AZ (photo far right) Owner:

Pima County Department of Transportation

Prime:

Markham Contracting Co., Inc.

Designer: AECOM

HONORABLE MENTION PROJECTS San Francisco - Oakland Bay Bridge Oakland Touchdown Project 2

The Castro Streetscapes Project

The Castro Streetscapes Project, San Francisco, CA Owner:

San Francisco Public Works

Prime:

Ghilotti Bros., Inc.

Designer:

San Francisco Public Works

Facilitator:

Ventura Consulting Group

I-85 Yadkin River Crossing Project, Salisbury, NC Owner:

North Carolina DOT

Prime:

Flatiron - Lane JV

Designer:

STV/Ralph Whitehead and Associates

CM:

The Lane Construction Corp.

Facilitator:

Wheeler Hill International

San Francisco - Oakland Bay Bridge Oakland Touchdown Project 2, Oakland, CA

I-85 Yadkin River Crossing Project

14

Partnering Magazine July/August July/August2015 2015

Owner:

Caltrans

Prime:

Flatiron West, Inc.

Facilitator:

Ventura Consulting Group

www.partneringinstitute.org

Buskirk Avenue Widening Project

SAPPHIRE LEVEL Highway 101 North Atherton Project

Buskirk Avenue Widening Project, Pleasant Hill, CA Owner:

City of Pleasant Hill

Prime:

Ghilotti Bros., Inc.

Designer:

T.Y. Lin International

CM:

Ghirardelli Associates, Inc.

Facilitator:

OrgMetrics LLC

Highway 101 North Atherton Project, Novato, CA Owner:

Caltrans

2142J Pedestrian Countdown Signals

Partnering Agency:

Transportation Authority of Marin (TAM)

Prime:

Ghilotti Bros., Inc. / RM Harris Co JV

SR 101 (Agua Fria) Maryland Ave. HOA Ramps

Designer: B.K.F. Facilitator:

OrgMetrics LLC

2142J Pedestrian Countdown Signals Project, San Francisco, CA Owner:

San Francisco Public Works

Prime:

Bay Area Lightworks, Inc.

Facilitator:

OrgMetrics LLC

SR 101 (Agua Fria) Maryland Ave. HOA Ramps Project, Glendale, AZ Owner:

Arizona Department of Transportation

Prime:

Coffman Specialties, Inc.

Designer:

T.Y. Lin International Santa Rosa

COMBAT

Since 1908

CONGRATULATES Ghilotti Bros., Inc.

COLLABORATION

Since 1914

MAKE YOUR PROJECT AN AWARD WINNING PROJECT— BOOK A COLLABORATIVE PARTNERING ORIENTATION TRAINING FOR YOU OR FOR YOUR TEAM TODAY! (925) 447-9100

Vallejo

San Rafael

International Partnering Institute Awards!

• Ruby Level Award:

Santa Rosa Ave. Widening Project, Santa Rosa

• Sapphire Level Awards:

1) Buskirk Ave Widening Project, Pleasant Hill 2) Highway 101 North Atherton Project, Novato

• Honorable Mention:

www.partneringinstitute.org

The Castro Streetscapes Project, San Francisco

July/August 2015 Partnering Magazine

15

RESEARCH ROUNDUP

Since 1964, all Non-Farm Industries in the U.S. have increased in productivity by 3.06% each year, while Construction productivity has declined by -0.32% each year.

The Productivity Gap In Construction

C

onstruction is the only non-farming industry in

information from the Bureau of Economic Analysis (which

the United States that has lost productivity points

compiles the Gross Domestic Product, Value Added, Inputs/

since the 1960s. In fact, we get less productivity per

Outputs, etc.), we get improved insight into the construction

laborer today than we did even during the 1990s. Litigation,

industry.

fragmentation, increased complexity, loss of skilled workers, and added complexity are all reasons why productivity continues to

In order to measure Labor Productivity, Teicholz and his team

decline. But how bad is it, and what can we do about it?

first organized an index of Construction Output in constant dollars (based on 1987 dollars). This demonstrated a significant

In a March 2013 AECBytes article (http://www.aecbytes.

increase from 1992-2007, and then a sharp decline, prior to our

com/viewpoint/2013/issue_67.html), Paul Teicholz, Professor

recent recovery in 2012/3.

Emeritus from the Center for Integrated Facilities Engineering (CIFE) at Stanford University, shares how the construction industry’s performance has struggled and continues to get worse compared to other industries.

Teicholz demonstrates that while all non-farming industries (like manufacturing, robotics, retail, etc.) have improved steadily from 1964–2012, the construction industry has slowly declined.

The Methodology There are two U.S. Government agencies that measure the economic impacts of nearly every industry—the Census Bureau, and the Bureau of Labor Standards. The Census Bureau focuses on industry specific outputs and the dollar value of inputs (like the Construction data in Figure 1, shown at right). The Bureau of Labor Standards (BLS) focuses on labor inputs and data specifically.

When data from these two sources is combined with 16

Partnering Magazine July/August 2014 2015

Figure 1: Labor productivity www.partneringinstitute.org

The researchers then collected weekly construction industry work hours from the BLS. This became the basis for annual work hours indexed from 1964-2012 (anchored around 1987). He notes, “During the peak years of 2006-7, there were 15.5 billion hours worked by 7.7 million workers. This dropped to 11.4 billion hours in 2012, a decrease of 26%.” This is a dramatic drop-off.

Figure 2: Chart created by Matt Stevens, National Society of Professional Engineers, with data from the U.S. Department of Labor and the U.S. Bureau of Economic Analysis

per year. Over the same period, construction productivity has decreased at an average of -0.32% per year. This is a profound

The Findings

difference!

Once Labor Productivity and the total hours were calculated, labor productivity is simply construction output by category,

In a June 2014 article, Matt Stevens took Teicholz’s findings

divided by labor hours over time (See Figure 1).

one step further, emphasizing how much labor productivity has declined per worker since 1993 (Figure 2). We are left with

According to Figure I, you can see “All Non-Farm Industries,”

a fairly depressing figure about how the industry is trending

steadily increasing in productivity from 100 productivity points

in terms of productivity. But before we focus on solutions, it is

in 1964 to more than 250 today—an average increase of 3.06%

important to acknowledge why.

Partnering for Project SucceSS

Parsons Brinckerhoff salutes our partners on these iPi award-winning projects: • runway Safety area improvements

San francisco international airport

2015 Diamond Level Partnered Project of the Year

• Sand creek interchange and Widening antioch and Brentwood, ca

2015 Sapphire Level Partnered Project of the Year

We partner with clients, consultants and contractors to deliver project success worldwide.

Learn more by visiting pbworld.com

www.partneringinstitute.org

for career opportunities visit pbworld.com

July/August 2015 Partnering Magazine

17

RESEARCH ROUNDUP Root Causes of Lost Productivity

of the total volume of business. Small businesses are much

In the series, Teicholz claims that there are a number of root

more sensitive to market changes than large firms, which

causes of the loss in productivity:

makes broad adoption of innovative practices incredibly

•

Litigation — Litigation affects every aspect of our project negotiations. Think about your most productive project

•

•

Complexity — Construction projects today are much

teams...even they have to write carefully crafted emails

more complex than projects even 20 years ago for a

documenting agreements and citing specifications to

number of reasons. One key issue is that new construction

ensure that the paper trail matches the budget.

only accounts for 63.57% of projects. Today, 22.2% of

Paper Documents — Teicholz focuses on the inefficiency

the time, construction involves additions, alterations

of paper specs developed by teams who work in silos. The

or reconstruction, which is much more complex than

designer and engineers rarely work in the same room

new construction. Furthermore, it is now common for

throughout programming and design, so although Building

the public to be walking in, around, or near the active

Information Modeling (BIM) tools have become more

construction site.

popular in the vertical market, the actual construction

•

challenging.

•

•

Safety — Construction projects today are much safer

specifications are still two-dimensional, incomplete, and

than they were in the 1960s and reportable injury rates

imperfect.

and worker deaths have steadily declined since then. It is

Loss of Skilled Workers — Participation of highly skilled

important to continue to focus project teams on a safety

workers has steadily declined (particularly in the 2000’s),

culture, but we intuitively know that the additional meetings

as relative hourly pay rates have continued to drop and

and training have an effect on productivity rates. It would be

union participation has decreased.

valuable to learn how to quantify this and put it in context so

Fragmentation — The vast majority of construction firms

we could determine if it is statistically significant.

are small in size. 62% of industry firms have 1-5 employees and nearly 97% of the firms have 49 or fewer employees.

Applying this Knowledge to Your Next Project

In the vertical market, these small firms account for 51%

Teicholz believes that there are a few key positive changes that are allowing the construction industry to recover its productivity, but the real gains have yet to be seen. In his articles, he focuses on broader implementation of interactive tools like BIM and the increased use of off-site fabrication and modular construction to improve on-site productivity.

We believe in strong partnerships

We have found that projects that effectively implement Collaborative Partnering are also able to improve productivity.

When teams align their goals and set clear norms of behavior so project teams can resolve the technical issues that arise, they become predictably successful. Since 2013, two-thirds (33 of the 49) IPI Award-winning projects finished on time or early. And in 2014 alone, the 23 Award-winners project teams processed 1403 contract change orders, but had no outstanding claims! Research

WEBCOR.COM

and experience demonstrate that partnered projects improve productivity by reducing schedule, reducing rework, and improving the team culture, which improves job satisfaction (and therefore worker productivity). By focusing on the root causes of the loss of productivity (litigation, fragmentation, etc.) your team will get better results. Good luck!

________________________________

Sources: • Teicholz, Paul, AECBytes, Labor-Productivity Declines in the Construction Industry: Causes and Remedies (Another Look) (http://www.aecbytes.com/ viewpoint/2013/issue_67.html) accessed June 5, 2015 • Matt Stevens, Construction Productivity in Decline, Published by the National Society of Professional Engineers, June 2014

18

Partnering Magazine July/August 2015

www.partneringinstitute.org

Collaboration.

Innovation.

Sustainability.

Partnering to build a better future for our customers and communities.

James B. Hunt Library, North Carolina State University

George Bush Intercontinental Airport, Terminal B Redevelopment, Houston TX

Gold Line Bridge, Arcadia, CA

2013 NAIOP Community Enhancement Day, Seattle, WA

usa.skanska.com

BEST PRACTICES

IPI META-ANALYSIS PART III The Significance of the Elements of Partnering and How They Relate to One Another

I

n this issue, we’ll continue our in-depth exploration of the IPI Meta-Analysis with a look at the significance of specific Partnering elements and how they relate to

one another.

As we detailed in our first article in this series, the specific elements in the Partnering Framework are: Boundary Conditions (owner readiness), Drivers during Delivery (partnering tools), Team Characteristics (personality and group traits), Project Outcomes and Organizational Outcomes. A critical finding that emerged from the research is that the actual implementation of partnering sessions (kick-

off, follow up and close out/lessons learned) are the most significant elements of the entire partnering structure. The research also demonstrated that specific elements of the Partnering structure directly correlate to specific outcomes, so it’s possible to customize your partnering program to hone the outcomes that your organization desires.

The Significance of the Partnering Framework Elements The structured Collaborative Partnering process is a step-by-step methodology Photo courtesy Flatiron West, BART Oakland International Airport Connector

designed to maximize the potential of each project. Each step in this process is important and is designed to improve project and program outcomes. And yet, there is a weighted significance to particular elements within the Partnering Framework that have a greater impact on the success of your program.

The most significant of all of the elements, and by a very healthy margin, is the practice of Partnering.

The most significant of all of the elements, and by a very healthy margin, is the practice of Partnering. The practice of partnering is the implementation of Partnering tools: the kick-off session (and developing the Charter), regular Partnering sessions (and Scorecards), and the close out/lessons learned session.

If you’ve engaged in Partnering, you are probably not surprised by this finding. It doesn’t surprise us at IPI because we hear from teams on a regular basis about the factors that have made their Partnered projects a success. We hear about better relationships, face-to-face communication, more trust, early identification of issues, and a respectful climate that fosters innovative and creative thought. And all of these things actually take place in—or occur as a result of —Partnering sessions.

20

Partnering Magazine July/August 2015

www.partneringinstitute.org

The Significance of the Elements of Partnering 250

200

150

100

50

za tio ns

s O

rg a

ni

Te am

tio n

Co

nfl

ic

tR

es ol u

Sa fe ty

e Q

ua

lit

y/

he du l Sc

Co st

e id ua lL ev el Te am Le ve l

ic

di v

Pr ac t

In

Pr

oc

ur em

en t

ua l ra ct nt

Co

Re la te d

e

oj

ec t

sl at iv Pr

Le gi

za tio na l

O

rg a

ni

Cu

ltu

ra l

0

The second most significant element of the Partnering

Boundary Conditions

Drivers during Delivery

Project Outcomes

Organizational Outcomes

Team Characteristics

structure are the Cultural Boundary Conditions, the characteristics of the owner agency. Cultural owner conditions

The third most significant element of the Partnering structure

include effective and open communication, commitment to

are the Team Performance outcomes. These include improved

continuous improvement, and creativity and innovation. In short,

relationships and long term established trust within the teams.

all of the qualities that make for a good project team. So if you want your project teams to embody these qualities, make sure

Each of these elements are clearly connected: the Owner’s

that they are present in the owner as well.

cultural characteristics foster the characteristics that will help a

www.partneringinstitute.org

July/August 2015 Partnering Magazine

21

BEST PRACTICES

The Owner’s cultural characteristics foster the qualities that will help a team thrive, and the Partnering sessions give the teams the road map and tools to hone that dynamic and produce results.

team thrive, and the Partnering sessions give the teams the road

Is your prime objective improved quality and safety? The Meta-

map and tools to hone that dynamic and produce results.

Analysis found that quality and safety most consistently derive from contractual drivers. Contractual drivers are basically

During a recent IPI Collaborative Partnering Orientation Training,

contracts that include incentives, risk/reward (or pain-share/

Jamie Cooper with Chaves and Associates shared a success story

gain-share) and the actual contract language. If as an Owner

that pretty much embodies this research. She was a member of

your procurement is outside of your control, you will need

the SFO Westfield Cargo Project (a Ruby Level 2015 Partnered

to foster the safety and quality environment through your

Project of the Year Award Winner). Jamie shared that working on

Partnering.

that project “was fun, it was enjoyable to go to work every day, but the main thing was that we treated each other like family...

Is your prime objective conflict resolution? According to the

We trusted each other.” The quality of that team dynamic was

findings, the use of partnering sessions and tools have the most

fostered through consistent (quarterly) partnering sessions,

direct impact on conflict resolution, followed by contractual

empowered by an Owner with a Culture of Partnering, and the

terms, and in third place, procurement. Procurement refers to

results were an Award Winning project!

the early involvement of all team members in the partnering process, and hiring teams based on their qualifications and

Now, let’s go one step further: what specific outcomes can we

partnering experience. This is an excellent reason to join the IPI

expect from the various elements of the Partnering structure?

First Campaign and, when you are given the choice, work with fellow IPI members!

The Elements of Partnering and their Outcomes

So choose what you emphasize within your Collaborative

Every Owner and project team has specific outcomes that

Partnering Program based on your objectives! Is it your aim to

they need to achieve. In some cases, conflict resolution is the

get better outcomes across the board? Then your best bet is to

most important project outcome in order to reduce claims. In

design a robust Partnering Program. We can help you get there!

others, quality is more important than any other outcome. The

Visit the IPI website today to download our sample Partnering

graph below shows the significance of specific elements of the

Specifications and other tools to boost your program - http://

Partnering Framework on particular outcomes.

partneringinstitute.org/owners-toolbox/. We can also train your teams to help you get the most out of your Partnering program http://partneringinstitute. org/training/.

For more information on the Meta-Analysis, its findings, and how to apply them to your program, contact Dana Paz, IPI Assistant Director, danapaz@ partneringinstitute.org.

Source: The IPI Meta Analytic Synthesis of Partnering Literature in the Architecture, Engineering, and Construction Industry is authored by Sinem Mollaoglu (Korkmaz), PhD. and Anthony Sparkling, MCM, of the Michigan State University Construction Management Program

22

Partnering Magazine July/August 2015

www.partneringinstitute.org

AUSTIN WEBCOR JV

Partnering to Reach #1 Congratulations to all the IPI Award winners, and especially to San Francisco International Airport Design & Construction Division for being named 2015 IPI Partnering Champion.

Making SFO’s Partnering Program Fly For almost two decades OrgMetrics has been providing Partnering Services for San Francisco International Airport’s renowned Partnering Program

Partnering Program Development/Facilitation • Project Partnering Facilitation • Strategic Partnering Facilitation • Facilitated Dispute Resolution • Project Scorecards

www.orgmet.com | (925) 449-8300