I Miss My Morning Coffee

Several years ago I accepted a position with a new company and was immediately invited to join the division’s senior management team for coffee each morning. It was important to me because being included validated my standing in the organization and, as a newcomer, it was a great way to learn the culture, personalities, and methods of the key decision making group.

One of the things that made this daily session so useful was its informality. It wasn’t a management meeting, it was a group of friends having a cup of coffee at a nearby restaurant. We discussed family issues, sports, and yes, business. In fact, I would argue that many of our most important and best decisions were made in this setting. It was a time when we could let the organizational facades fade to background as we talked conversationally and honestly about the pros and cons of various initiatives.

Because of the various business segments we represented, resource constraints, and sometimes different views on the correct future direction of the organization we were bound to have different perspectives at times. It wasn’t always non-confrontational, but it was always respectful, relaxed, and informal. Out of this process came consensus-driven decisions that all were invested in. As a result this team worked together over the course of several years to affect a remarkable set of changes. We designed and built a new headquarters facility while simultaneously relocating two other major sites and developing an offshore presence. We changed all of our core processes, successfully implemented significant technology programs, and eliminated organizational and geographical stovepipes that had been hindering us for decades. We moved from a “I don’t know, let me get back to you” culture to having real time metrics on key operating information and a balanced scorecard that executive management routinely checks. As a result, our stock in the C Suite has gone sky high.

Now, however, the corner restaurant with the very attentive staff (who used to let us in well before opening) is too far away. The days are too hectic (but no more more so than they were before) and we all seem to have different agendas (didn’t we always?). I still have coffee each morning, usually alone in my office. I have become my own counsel, and sometimes I’m a lousy counsel.

On second thought, it’s not really the coffee I miss at all. The good news is that I can do something about this. Excuse me, please. I have a few calls to make.

Understanding Data Visually

If you have looked at many graphs and charts displaying metrics data you have no doubt scratched your head from time to time and asked what the chart is really trying to tell you, or why someone thought it important. The graphic portrayal of data should have one, and only one purpose; to make understanding of the data clear. Here are a few simple pointers:

Don’t measure and report something simply because you can. Measure and report what does or can make a difference.

Think about the timescale. Just because you can track it in real time doesn’t mean you should, or that it should be reported that way. If the variances over time are small, or if the opportunity to use it as a lever for positive change is small, then consider reporting the item on a quarterly basis.

Simplify for clarity. Too many charts confuse or hide what is really important because they include unimportant information and/or get too cute with the graphics. Graphics should be used minimally and to clarify, not to make the chart a piece of art.

Watch the value scale. Logarithmic scales are generally hard to interpret because we tend to take spatial relationships literally. If you have values with large spreads consider weighting them or annualizing them to normalize spread.

http://www.math.yorku.ca/SCS/Gallery/ is one of the best websites I’ve seen about visual presentation of metrics data. Take a tour and look at samples of good and bad metrics reporting. Then look at your own metrics reports and ask yourself if you are really telling the story the way it should be told.

Green Construction Processes

See Greg Zimmerman's article at http://www.facilitiesnet.com/bom/article.asp?id=7357&keywords=green%20building,%20leed for an excellent summary of issues that surround green building projects. Notably, Greg comments on mindset changes that FM's are faced with when building Green.

Data Center Optimization: Increasing reliability, decreasing energy consumption Thursday, September 27 1:00 p.m. (EST)

Building Operating Management magazine is presenting a free webinar that many of you may be interested in. Here is the basic info, with a link to register.

Attend this free Webcast on high-performing data centers for a comprehensive look at their role in energy use, IT sophistication, sustainable practices and 24/7 operations.Produced by Building Operating Management magazine, this free, online, 75–minute Webcast will introduce you the best practices and latest technologies you need to ensure your data center operates consistently and cost-effectively.

Presented by Steve Spinazzola, Vice President of RTKL, an international architectural, engineering and planning firm, the Webcast will address many important topics related to a fully functioning data center, including:• the growing demand for uptime• what IT knows (and what facility executives don't)• factors making existing data centers obsolete• how these trends affect an organization• planning for the future• energy efficiency and green designRegister for this free data–saving (and job-saving) Webcast right now.

Negotiated Fee Contracts Have Their Place

Most Owners are reluctant to issue a major construction contract without knowing the bottom line cost. Getting to that point, of course, requires lead time for design evolution and documentation so that contractors can bid. There are times, however, when the advantages of getting the Contractor on board as early as possible warrant the acceptance of some additional risk. The question then is which project delivery method should be used, Fast-Track, Design-Build, or Negotiated Fee.

Negotiated Fee contracts offer many advantages, including early engagement of the Contractor while avoiding the contractual and schedule intricacies of other project acceleration methods. Certain project conditions strongly favor this option. Examples would be a hyper-critical schedule or the need for contractor participation in pre-construction activities such as value engineering, project estimating, and constructability reviews in a project where the Owner wants to retain as much control as possible.

In Negotiated Fee projects the selection of the Contractor is based upon a review of qualifications, appropriateness for the work, availability, and the negotiated fee points. RFP’s for a Negotiated Fee contract should include all of these and other routine due diligence questions, and your follow-up should be just as complete. Negotiated Fee contracts may or may not include a Guaranteed Maximum Price, depending on the state of design documentation and allowable time (use AIA Document A-411 for projects with a GMP, and AIA A-414 for those without a GMP).

The heart of the matter (assuming all of the contractors you are considering are qualified and appropriate) are the fees that you negotiate. These are provided by the Contractor in its RFP response and may be accepted as-is or further negotiated. Typically these include overhead and profit rates expressed as a percentage, a set amount per day for General Conditions, and the Change Order mark-up rate. Also consider locking in hourly labor rates and unit costs for typical items. Remember that General Conditions should be a set fee for a defined time period (day or week), not a percentage of the project cost. Finally, make open book bidding and Owner review and/or participation in the sub-trades buy-out process a firm requirement.

While some Owners may feel there is risk in this methodology the fact is that the Contractor is assuming more risk by setting these rates and agreeing to opening the books during trade bidding and buy-out, which protects the Owner against any attempts to embed additional costs. The Contractor also shares in the responsibility to deliver at the expected overall cost since they participate in value engineering and provide cost estimating services during the design process. Significantly, this model eliminates protracted bidding exercises between design completion and start of construction, thereby, saving time and money without compromising value or quality. The advantages of this delivery method go primarily to the Owner in increased speed and flexibility.