Credibility (from the Architect’s Corner)

Matthew Barhdyt, AIA, LEED AP

Principal, Acheson Doyle Partners Architects

Talent is not enough. In an economy where opportunity still seems to be more of a promise than a reality, credibility can make the difference between winning or losing the job–if you’re the architect on the street looking to grab that rare opening of employment–or if you’re a leader in your firm sweating to bring in the next project.  Credibility gets you the unexpected reference from someone you worked with only tangentially and who recommends you to a potential new client or a potential new employer.   Credibility gets you the new project from an old client without having to compete.  You have proven yourself before and no doubt you will prove yourself again.   It is your word, your reputation, your experience, your conviction–and yes, your talent– that you carry with you as an individual. Find these same qualities embodied in every member of a practice and you’ll know what it takes to be successful.

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The Importance of Alignment in Project Management

Alignment of interests is a key trait of successful projects.  Alignment is required at several levels.  The objectives and actions of project teams must be aligned with those of the organization.  Similarly, project teams must be aligned with clients.  Proper alignment ensures that surprises are minimized and information flows in a transparent manner.   Proper alignment between project teams, their organizations and their clients is not easy to achieve.  It is a result of a consistent effort to promote open communication, timely reporting, and honest assessments.  This requires a high level of maturity and leadership  at the project level and at the senior management level.

Failure to achieve alignment can cause gaps in information, increased mistrust, erosion of relationships and set the stage for antagonism and defensive attitudes that undermine project success.

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LDs vs. Incentives on Projects

I have a nagging question which I cannot answer.  Why do some Owners (including Government institutions) insist on including LDs (liquidated damages) in contracts?  Based on my experience and on informal surveys I have taken, LDs, in general, DO NOT work.  They make no sense from an economic viewpoint.  Incentives make much more sense.  Here’s my rationale –

1.  LDs raise costs for the owner.  The purpose of well prepared and properly adminstered contracts is to increase value, not raise costs.  LDs run contrary to common sense and do not stand up to the rigor of analysis.

–  Bidders have to factor in the risk of LDs.  That’s the first layer of added cost.

–  LDs create an adversarial relationship wherein the contractor and owner jockey for position to “manage” the LD process.  The focus of the contractor is on defending against potential LD claims.  So naturally, the contractor diverts attention and resources to establish claims which counteract potential LDs.  This “contractual behavior” adds cost to all parties.

–  It is VERY difficult for an Owner to successfully extract LDs.  The burden of proof weighs heavily in the favor of the contractor.  A savvy contractor is usually able to assert counterclaims against the owner, especially on a complex project.

–  Adversarial relationships undermine the spirit of cooperation, knowledge sharing, communication and transparency that are essential on large and complex projects.

 2.  Incentives work much better because they appeal to stronger, commonly shared economic interests.

–  The owner gains economically when a project is successful.  Incentives are a vehicle to share in these gains.

– Incentives are a net positive for bidders, therefore, they do not drive up the cost of bids.  If anything, they should drive bids down for confident bidders.

– The opportunity to earn an incentive or bonus can be shared by the contractor with the project team and subcontractors.  This creates a solid potential to align interests.  When the owner’s interests are aligned with the project team, good things happen.

3.  Common Sense.

– Would you tell an employee that if their performance was low, they would have to return money at the end of the year?  Or would you establish performance-driven bonus targets?

I’d like to hear your opinions in this matter.  What experiences have you had which either support or refute my arguments?

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Project Management Innovation

I am pondering several interesting concepts related to project management innovation.  These drive at the heart of team building, organizational excellence and project performance.  

1.  Can we address project management innovation in a general way?

2.  Can mid-size companies strive to evolve along the path of project management maturity in an economical manner?

3.  How can businesses use project management innovation to to increase profitability?

I welcome responses from readers of this blog.

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Business Relationships are Key

Architectural Insight…by Matthew Barhydt, AIA, LEED AP

I recently received a phone call from a former colleague with whom I worked many years ago. I probably hadn’t seen him in at least 10 years but when I picked up the phone and he said, “Matt, this is _____ _____,” I suddenly had an image of him in my mind and I remembered the firm where we had worked, the projects we had been on together, and even a bit about his family. We spent a couple of minutes catching up, which led to the reason for his call.

Working now for a prominent Owner’s Rep, he was asking me if my firm wanted to be included on an RFP he was about to send out for a new project. It wasn’t that he just decided to renew an old relationship. It turns out that we had presented to his firm and a client they were representing last fall and been short listed by them for his client’s project (which we ultimately lost out on). So we had already made a favorable impression. And in searching for another architectural firm to include on the RFP list, he got in touch with an engineer with whom he was working on a related project. In fact, this engineer and I are very friendly and we try to do a lot of co-marketing together; he immediately recommended my firm and me. Hence, the phone call.

We’re now putting together a proposal and we’ll see if we get the project. The lesson that I’ve taken from this–and it’s a lesson I’ve learned now many times—is that your best opportunities start with people you know. The big city is really not so big and you never know whom you’re going to run into from your past, especially once you begin to accumulate some years in your career. The professionalism with which you must always cloak yourself is critical but filter it through your own personal approach; you want people to remember you.

Matt Barhydt 8.7.10

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Recommended Reading for Project Managers! The E-Myth

Over the past 20+ years, I have read few books which provided the kind of business revelations that Michael E. Gerber’s seminal work did.  His book, The E-Myth, illustrates with elegant simplicity, the fact that entrepreneurs must “work on their business”, not “in their business”.   This lesson can be used in project management.  You have to see the total picture as a project manager.  In effect, you have to work on the project, not in the project.  Rather that doing a marginal job in explaining this, I suggest that you read the book.

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Project Management and Project Leadership Training

There are so many courses and programs today on the subject of project management and project leadership.  How does an organization choose from the dizzying array?  I have some thoughts which I hope can clarify the decision-making process.  While many programs are good at delivering on specific issues such as risk management, scheduling, communication and integration etc…, few are good at addressing the questions and concerns that corporate executives, PMO directors and stakeholders raise.

1.  How does the program integrate the nuts of bolts of project management training in a way that translates into a useful experience?

2.  How does the program provide a wholistic learning experience that yields leadership insight and tools that can be used right away?

3.  How does the program add value by  provoking a higher order of thinking among seasoned project managers and project leaders?

4.  Does the program provide significant lessons that justify the expense?

5.  Does the program inspire learning, communication, dialogue, dissent and debate?  Or does it merely deliver information?

In today’s hyper-competitive market, organizations, both private and public, are looking for superlative value for their training dollars.  Before they spend any money on project management training, they must buy into the value proposition.

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Architectural Insight

The Architect’s Corner will feature writings by Architects on topics relevant to our readers.  I am pleased to announce that Mr. Matthew Barhydt has joined this blog, and will offer his insights and views on design, construction and project management.

Matthew Barhdyt, AIA, LEED AP

Principal, Acheson Doyle Partners Architects

Matthew Barhydt has over 27 years of experience across a wide range of new construction, historic rehabilitation, renovation and interior design projects. Mr. Barhydt’s work with Acheson Doyle Partners includes leading the firm’s effort for the design and construction of a new Retail Pavilion at Liberty Island; a multi-million dollar condominium conversion project, Miraval Living, on Manhattan’s Upper East Side; the design and construction of a new Chapel for the Archdiocese of New York; and the renovation of the food service facilities at Ellis Island. He oversees all of the firm’s work with the National Park Service, including the rehabilitation of the National Park Service’s Floyd Bennett Field 1930’s airport terminal building, and several smaller rehabilitation projects at Ft. Wadsworth on Staten Island; at Ft. Hancock in Sandy Hook, New Jersey; and at the National Historic Park Morristown Museum in New Jersey. 
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The Four Cs of Good Project Management Practice

So many theories on project management, so little time.  How do we distill all of the advice, ideas and principles into an elegant summary?  In the real world, we know that there are no packaged solutions for complex problems.  There are, however, experience-tested frameworks which act as underlying threads to guide good project management practice.  

I have wrestled with the question of outlining good project management practice and have reflected on the established doctrines.    For the past several weeks, as I introduced principles and best practices to my summer project management class at NYU, I began to see how many of these principles have common references and recurring themes.  While there are no magic pills or summary level treatises which capture the full range of project management discourse, there are underlying concepts which clarify project management behavior.  Here are a few powerful common denominators to project success that stand out after the background noise is filtered out:  

1.  Clarity…project managers and project teams that practice clarity are better equipped to succeed.  Promoting a culture of clarity requires active direction and support from top of the organization.  If senior management is not committed, there can be no clarity; the default scenario in that case is ambiguity and chaos. 

2.  Communication…this was, in a way, too easy a common denominator to miss.  Simple, yet very powerful.  Project managers, their stakeholders and their teams must appreciate and embrace the need for proper, timely, concise and relevant communication.

3.  Commitment…One of the key roles of a project manager / leader is securing the commitment of the project team.  The project leader cannot do this until she has demonstrated the same level of commitment that is demanded and required from the project team.  

4.  Credibility…This goes hand-in-hand with trust.  You cannot convey your arguments if you are not credible.  You cannot achieve credibility if your integrity is suspect.  There are no short cuts to credibility.

This is not a comprehensive list and is just a very tiny snapshot from one viewpoint.  I’d like to get other views and thoughts which could expand on this.   Your comments and perspectives are welcome.

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Construction Consulting > My View

Over the past ten years, I have gained much insight into the construction consulting industry.   I’ve learned that big, blue chip clients have become increasingly dissatisfied with the level of service being provided by large advisory firms.   The major causes of that dissatisfaction relate to the following factors:

1.  Clients often perceive that the highly paid consulting firms have lost touch with the market place and supply chain in the real estate and construction industry.  While the consultants prepare “pretty” reports, they risk being looked at more as academic research providers.  

2.  Clients want current construction costs, cost trends, equipment pricing, materials pricing trends and labor productivity data.  The large firms are often unable to provide this information because they are far removed from the “ACTION” of the construction supply chain.

3.  The consultants at the big advisory shops lose their effectiveness over time because in their advisory roles, they are not directly engaged in managing or overseeing projects.  Their skill sets atrophy or become stale.

4.  Often, advisers are many years removed from negotiating contracts, bidding projects and scrutinizing bids.  This erodes their value to their clients.   The strategic management of the bidding and procurement process requires that those spearheading the process stay current with:

–              Real estate and construction economics.

–              Bidding and procurement methodologies.

–              Supply chain economic trends.

–              Labor trends.

–              Materials costs.

–              Vendors.

–              Equipment manufacturers.

–              Technology innovation in construction.

–              New standards in energy efficiency.

–              New standards sustainable design.

–              The current health of LOCAL CMs, GCs and subcontractors.

–              Construction lenders.

–              Real estate private equity trends.

–              Real estate mezzanine lenders.

–              Shifts in the A/E consulting industry. 

The larger consulting firms are constantly restructuring because they cannot achieve the above easily.  They are not nimble and are often detached from the rapidly changing dynamics of the real estate and construction industry.

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