Posted with permission from Anne Wallace Allen, Editor Idaho Business Review- June 4, 2018
Remember how car maker Henry Ford revolutionized manufacturing by using the assembly line to build affordable cars?
Well, that’s what Rob Perez, the Idaho/Washington regional president of First Interstate Bank, would like to do with commercial construction.
Perez doesn’t claim to be revolutionizing construction the way Ford did the auto industry. Many individuals and companies have created processes for making construction more predictable, more collaborative, and more efficient.
But Perez would like to see this construction efficiency happen more: more predictably, more collaboratively, more logically. If Perez has his way, the major players in Idaho construction – the architects, the owners, the engineers, and the contractors and sub-contractors – will emerge from their silos and come together to work on a common goal: a building that was made as well, and as efficiently, as possible.
To this end, on May 23 Perez and Lee Harrison, founder at Axiom PLLC in Boise, held a panel discussion at the Riverside Hotel where they presented architect Tom Sheldon of GGLO in Seattle, and Jim Caveness, a mechanical engineer who works for MMC Contractors in Las Vegas.
Perez and Harrison are friends who have set out to share the gospel of improving construction. They don’t have a name for their quest, some of which has been loosely characterized by others as lean construction. Design-build and construction manager/general contractor or CMGC are also contracting methods that aim for efficiency and collaboration. The Lean Construction Institute in the Washington, D.C. area, a nonprofit founded 20 years ago, seeks to “transform the industry … using an operating system centered on a common language, fundamental principles, and basic practices.”
That’s what Perez and Lee are seeking to do, too.
Fostering collaboration among parties that have traditionally been separate, or even adversaries, is a guiding principal. That includes sharing data – including budgets – with the rest of the team. Another guiding principal is willingness to change, and yet another is the idea of spending more money up front – for exampling, by deviating from choosing the lowest bidder – to achieve cost and time savings in the end product.
As Perez described it to me before the event, the popular design-build process, which goes some way toward solving the project delays and cost overruns that result when parties don’t work together, doesn’t go far enough. The integrated project delivery that is a process within lean construction works well, but only when people are willing to break free from their traditional adversarial roles and collaborate.
“We’re still under this illusion that it’s all about a winner and a loser,” Perez said. “It’s the nature of the bid process.”
That’s why Perez brought 175 people together at the Riverside Hotel to hear from his experts about the nuts-and-bolts savings to be found in a collaborative construction process – and to implore his audience of builders, real estate brokers, and others to employ behavioral techniques such as openness to change and willingness to collaborate.
Right now, with most people in the construction trade working at full-tilt in a booming economy, it’s hard to change course or introduce new concepts in the name of efficiency.
“But as things slow, and they will slow, there will be a time where we can embrace a more collaborative approach to this, an approach centered on a common goal and solutions that are driven by 100 decent participation of those involved,” Perez said.
Perez and the panel’s plea to the audience: Be creative; hire creative people and let their ideas be heard; and be open to spending more money up front if it means there will be savings later on. Work together with all the key players to anticipate needed changes before it’s costly to implement them, and seek expertise from all players to avoid costly mistakes.
Lee, a panelist, used his firm’s experience with the St. Luke’s hospital in Nampa – which opened last fall – as an example of collaboration that saved money and time. The hospital served as both owner and general contractor, and invited Lee’s firm to the table from the start to talk about how to make the process more efficient.
“Not very often is the structural engineer talking to the owner and seeing if we can move the construction schedule up by months; they’re usually having that conversation with the contractor,” Lee said later. “They were coming to us and creating opportunities to do things on that project that are very unique. We customized a lot of the things we do, and in the end we lowered the owner’s risk and saved months out of the schedule.”
Lee said the most inspirational part of his profession is finding opportunities for collaboration and creativity.
“When we start commoditizing everybody and putting everybody in their silos, for me it’s not a very inspirational position to be in,” he said. “I continue to want to find those collaborative relationships and hope and encourage more of that happening in our area, because we don’t have a ton it.”
The conversation about early-stage collaboration is well-known, and it’s widespread, for example in the health care industry. But while these collaborative processes are well known, a lot of builders are still doing things in the old way.
“In design/construction we’re still lagging way behind the manufacturing industry,” said panelist Caveness. “We still do things almost like we did 100 years ago. We do use power equipment and we have lots of data and technology to help us get there, but when it’s all said and done, we’re still kind of in the Stone Age. We have a lot of room to improve.”
Perez isn’t directly involved in the construction industry now, but a foray into building prompted him to shake up the traditional adversarial process he observed.
“A couple of years ago I tried to build a small building and was frustrated by a very confusing and inefficient process, which prompted my investigation of alternative ways of doing construction,” he said.
Perez said his only stake now is in improving construction efficiency, and with it the local economy. He’d also like to have his bank seen as a place that solves problems. And anyone who knows him even a little can picture his annoyance at witnessing needless inefficiency.
“I just want to move things along,” Perez said.