Multi-Organizational Project Teams and Construction Innovation: GAl
The Role of the General Contractor and Construction Manager
by
MASSACHUSETTS INSTITUTE
OF TECHNOLOGY
R. Anthony Seaman
MAY 3 0 2000
B.S. in Civil Engineering
The United States Military Academy, 1992
LIBRAR IES
Submitted to the Department of Civil and Environmental Engineering
in partial fulfillment of the requirements for the degree of
MASTER OF SCIENCE IN CIVIL AND ENVIRONMENTAL ENGINEERING
AT THE
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
June 2000
@2000 Massachusetts Institute of Technology. All rights reserved.
Signature of Author:
"
A
Department of Civil and Environmental Engineering
May 5, 2000
I
Certified by:
E. Sarah Slaughter
Assistant Professor of Civil and Environmental Engineering
Thesis Supervisor
/
Accepted by:
e
Daniele Veneziano
Chairman, Departmental Committee on Graduate Studies
-
- -
0
- --
mL-
Multi-Organizational Project Teams and Construction Innovation:
The Role of the General Contractor and Construction Manager
by
R. Anthony Seaman
Submitted to the Department of Civil and Environmental Engineering
on 5 May, 2000, in Partial Fulfillment
of the Requirements for the Degree of Master of Science in
Civil and Environmental Engineering
ABSTRACT
With the advent of major advances in current information technology, many business leaders and
academicians hail the arrival of a new decentralized economy based on globally networked teams. This
dispersed "market-oriented" structure is a new reality for many current industrial organizations who must
transform from fully-integrated, centralized organizations into loose networks of suppliers and sellers
utilizing just-in-time collaboration to develop and manufacture new products and services world-wide.
Recent trends in manufacturing, where companies are now pursuing ventures outside their own
organizations, highlight the need for empirical studies on the nature of the collaborative innovative
processes within multi-organizational project teams. In construction, temporary organizations of allied
firms join together for the express purpose of completing large, complex projects. An analysis of the
construction industry provides a unique opportunity to analyze the innovative nature of the multiorganizational project team.
A combination of organization, economic, and innovation theory is used to identify factors that enhance
multi-organizational project team innovation. Various factors, including principal-agent relationships,
cooperation mechanisms, learning mechanisms, and network utilization, are examined to determine their
influence on multi-organizational project team innovation.
Seven contracting companies are investigated in the performance of twenty-nine different construction
projects. Project information is obtained from actual project team members. Fifty innovations are
identified from the project sample and used for analysis. The innovations are measured by project in
terms of their number and impact on the operations of the general contractor or construction manager.
The analysis examines the correlation between various factors and the innovation activity found on each
construction project.
This research is a step towards understanding the nature of the multi-organizational project team and its
capacity to innovate. Project leaders can use this information to better organize project teams for
innovation while construction companies and other construction industry firms can use this information
to evaluate their innovation strategy.
Thesis Supervisor: E. Sarah Slaughter
Title: Assistant Professor in the Department of Civil and Environmental Engineering
Acknowledgements
I would love to say that I did all of this work entirely by myself but that simply is not true! I had
much help along the way. First and foremost, thank you to the Center for Innovation in Product
Development (CIPD) and the National Science Foundation (NSF) who funded this research. To
Professor Slaughter, my heroic thesis advisor - your infectious enthusiasm, chaotic energy,
indomitable spirit, sense of humor, and tested patience has made this unforgettable, fun-filled
journey. To Mom and Dad - your unconditional support is a wonderful gift for which I am very
thankful. To Lisa, my wife - the road is long, let's be on our way! And to all of the wonderful
people in the construction industry who took the time to talk with me and shared the wonderful
work of which they have been a part - thank you for your support.
5
Table of Contents
1.
2.
3.
15
INTRODUCTION................................................................................................
15
PROBLEM STATEM ENT............................................................................
1.1
. 16
RESEARCH OBJECTIVES.....................................................................
1.2
16
RESEARCH SIGNIFICANCE..................................................................
1.3
17
THESIS ORGANIZATION.......................................................................
1.4
19
LITERATURE REVIEW .....................................................................................
19
AGENCY THEORY..................................................................................
2.1
19
2.1.1 The Principal-Agent Relationship..................................................
20
2.1.2 M ulti-Agent Situations..................................................................
COOPERATION................................................21
CROSS-FUNCTIONAL
2.2
21
2.2.1 M echanisms for Cooperation.........................................................
23
2.2.2 Integration in Construction.............................................................
24
TEAM THEORY AND NETW ORKS..........................................................
2.3
2.3.1 Economic Team Theory.....................................................................24
2.3.2 Networks.........................................................................................24
25
INNOVATION THEORY.........................................................................
2.4
26
2.4.1 Classification of Innovations.........................................................
26
2.4.1.1 Innovation Types................................................................
26
2.4.1.2 Innovation Models.............................................................
28
2.4.2 Innovation "Clusters"....................................................................
28
of
Innovation.......................................................
2.4.3 The Hyper-Cube
28
ORGANIZING FOR INNOVATION...........................................................
2.5
28
2.5.1 The Virtual Organization................................................................
29
2.5.2 The Learning Organization.............................................................
30
Innovation...........................
and
Learning
2.5.2.1 Organizational
2.5.2.2 Learning Mechanisms.........................................................32
2.5.3 Organizational Roles.......................................................................32
33
2.6 SUM MARY..................................................................................................
FRAM EW ORK.....................................................................................................35
35
RESEARCH INTENT................................................................................
3.1
35
INDEPENDENT VARIABLES................................................................
3.2
3.2.1 Agency Theory................................................................................35
35
3.2.1.1 Contracts............................................................................
3.2.1.1.1 Lump Sum Contracts................... 36
3.2.1.1.2 Guaranteed Maximum Price Contracts....... 36
3.2.1.1.3 Cost Plus Fee Contracts.................................... 36
37
3.2.1.1.4 Fee Contracts....................................................
37
3.2.1.1.5 Unit Price Contracts.........................................
37
3.2.1.2 Delivery M ethods................................................................
37
3.2.1.2.1 Design-Bid-Build.............................................
3.2.1.2.2 Construction M anagement................................ 38
39
3.2.1.2.2.1 At Risk..................................................
39
Representative.....
Owner's
/
3.2.1.2.2.2 As Agent
40
3.2.1.2.3 Design-Build....................................................
41
3.2.1.3 Project Complexity.............................................................
7
Table of Contents
3.2.1.4 ProjectDrivers and Innovation D rivers.............................
Inter-organizational Cooperation..................................................
3.2.2.1 ProjectTimeline................................................................
3.2.2.2 Super-ordinateGoals.........................................................
3.2.2.3 Co-location.........................................................................
3.2.2.4 Team Integration................................................................
3.2.3 Networks.........................................................................................
3.2.3.1 Team Relationships...........................................................
3.2.3.2 Team M ember Selection.........................................................44
3.2.3.3 Repeat Projects..................................................................
3.2.4 Organizational Learning................................................................
3.2.4.1 OrganizationCapability....................................................
3.2.4.2 Innovative Capability.........................................................
3.3
DEPENDENT VARIABLES.....................................................................
3.3.1 Innovation Types............................................................................
3.3.2 Innovation M odels.........................................................................
3.3.3 Innovation Clusters.......................................................................
M ETHO DO LO GY..............................................................................................
4.1
A CASE STUDY APPROACH.....................................................................49
4.2
AN EM PIRICAL STUDY.............................................................................
4.3
LITERATURE REVIEW ............................................................................
4.4
PROJECT SELECTION............................................................................
4.4.1 Reducing the Field.........................................................................
4.4.2 Organizational Structure and Capacity...........................................
4.4.3 The Data Sam ple............................................................................
4.5
CASE STUDIES.........................................................................................
4.5.1 Prim ary Interviews.........................................................................
4.5.2 Secondary Interviews.....................................................................
4.5.3 Case Studies...................................................................................
4.6
DATA ANALYSIS.....................................................................................
4.7
DATA VALID ATION ................................................................................
DATA REPRESENTATION.........................................................................55
4.8
RESULTS.................................................................................................................
5.1
THE PROJECTS.......................................................................................
5.1.1 Agency Theory..............................................................................
5.1.1.1 Contracts............................................................................
5.1.1.1.1 Project Contracts.............................................
5.1.1.1.2 Innovation Contracts.........................................
5.1.1.2 Delivery M ethods................................................................
5.1.1.3 Delivery M ethods and Project Contracts...........................
5.1.2 Project Descriptors.........................................................................
5.1.2.1 ProjectComplexity..............................................................
5.1.2.2 Project Drivers..................................................................
INN OVATION OUTCOM ES....................................................................
5.2
5.2.1 Innovation Types............................................................................
3.2.2
4.
5.
8
41
42
42
42
43
43
44
44
45
45
45
46
46
46
47
47
49
49
50
50
51
51
51
52
52
53
54
55
55
57
57
57
57
57
59
60
61
62
62
62
63
63
Table of Contents
5.2.2 Innovation M odels.........................................................................
64
5.2.3 Innovation M odels and Types.........................................................64
5.2.4 Innovation Clusters.........................................................................
65
5.3
THE CONTRACTOR................................................................................
66
5.3.1 Innovation "Orchestrators..............................................................
66
5.3.2 Planned vs. In-progress Innovations...............................................
67
5.3.3 Innovations, Project Complexity, and Project Drivers................... 68
5.3.4 Innovation and Opportunity...........................................................
69
5.4
INNOVATION M ECHANISM S...............................................................
70
5.4.1 Super-ordinate Goals.......................................................................
70
5.4.2 Inter-organizational Cooperation....................................................
71
5.4.2.1 Project Timeline..................................................................71
5.4.2.2 ContractorSelection...........................................................72
5.4.2.3 Team Relationships...........................................................
73
5.4.2.4 Co-Location.......................................................................
74
5.4.2.5 Repeat Projects..................................................................
74
5.4.3 The Contractor Organization.........................................................
75
5.4.3.1 ContractorOrchestratedInnovation.................................. 75
5.4.3.2 OrganizationProcurement................................................
77
5.4.3.3 OrganizationalLearning....................................................
77
5.5
OW NER "END RUNS".............................................................................
79
6.
CONCLUSION....................................................................................................
81
6.1
SUM M ARY..........................................................................................81
6.2
CONCLUSIONS.........................................................................................
82
6.3
FINDINGS..................................................................................................
82
6.4
RECOMMENDATIONS FOR FURTHER STUDY.................................85
References.............................................................................................................................87
Appendices
A
B
C
Project Case Studies
Research Data
Identification of Innovation Clusters
9
List of Figures
Figure 2.1
Figure 2.2
Figure 2.3
Figure 3.1
Figure 3.2
Figure 3.3
Figure 3.4
- The Dynamic Network..................................................................................
24
- Matching Organizationto Innovation...........................................................29
- Need for External Sourcing of Technology..................................................
31
- Design-Bid-BuildOrganizationStructure....................................................
38
- ConstructionManagement (At Risk) OrganizationStructure........................39
- ConstructionManagement (As Agent / Owner's Rep) OrganizationStructure 39
- Design-Build OrganizationStructure...........................................................
40
11
List of Tables
Table 4.1 - Research Participants and Geographic Market................................................
Table 4.2 - Senior Management Contacts.........................................................................
52
52
Table 4.3 - Primary Interviews........................................................................................
53
54
Table 4.4 - Secondary Interview s.......................................................................................
58
Table 5.1 - Project C ontracts..............................................................................................
Contracts.......................................................................................59
Table 5.2 - Innovation
60
Table 5.3 - Project Delivery Methods................................................................................
Table 5.4 - Cross-Tabulation of Project Delivery Methods and Project Contracts............61
62
Table 5.5 - Project C omplexity.........................................................................................
63
Table 5.6 - Project D rivers................................................................................................
63
Table 5.7 - Innovation Types..............................................................................................
64
Table 5.8 - Innovation M odels...........................................................................................
Table 5.9 - Cross-Tabulation of Innovation Models and Innovation Types...................... 65
65
Table 5.10 - Innovation C lusters.......................................................................................
65
Table 5.11 - Innovation Clusters by Type.........................................................................
67
Table 5.12 - Innovation "Orchestrators"............................................................................
67
Table 5.13 - Planned vs. In-progress Innovations..............................................................
68
Table 5.14 - "Orchestrators" of Planned Innovations.......................................................
68
Innovations..................................................
Table 5.15 - "Orchestrators" of In-progress
Table 5.16 - Innovation, Project Complexity, and Project Drivers....................................68
69
Table 5.17 - Innovation Solutions and Innovation Opportunities.....................................
Table 5.18 - Contractors and Opportunistic Innovation....................................................70
71
Table 5.19 - Super-ordinate Goals and Innovation...........................................................
71
Table 5.20 - Early vs. Late Contractor Entry and Innovation...........................................
Table 5.21 - Early vs. Late Contractor Entry and Opportunistic Innovation..................... 71
Table 5.22 - Early vs. Late Contractor Entry and Cooperation Intensity........................... 72
72
Table 5.23 - Contractor Selection and Innovation.............................................................
Table 5.24 - Cross-tabulation of Contractor Selection and Innovation Models................73
73
Table 5.25 - Owner-Contractor Relationships and Innovation.........................................
Table 5.26 - Cross-tabulation of Owner-Contractor Relationships and Innovation Models.74
Table 5.27 - Project Team Member Co-Location and Innovation.................. 74
75
Table 5.28 - Repeat Projects and Innovation.....................................................................
75
Table 5.29 - Contractor Organizations and Innovation....................................................
76
Innovation.............................................................
Table 5.30 - Contractor Orchestrated
Table 5.31 - Owner-Contractor Relationships and Contractor Orchestrated Innovation......76
77
Table 5.32 - Contractor Procurement Policy and Innovation...........................................
78
Table 5.33 - Contractor Learning Mechanisms................................................................
79
Table 5.34 - Owner "End Runs".......................................................................................
13
1. INTRODUCTION
The pursuit of innovation has long rested on two basic premises: innovation is a powerful
instrument of progress; and, it can be harnessed to achieve desirable increases in productivity and
performance (Nelson and Winter 1977).
With the advent of major advances in current information technology, many business
leaders and academicians hail the arrival of a new economy. "New products will be developed
by just-in-time collaborations of globally-distributed teams linked seamlessly by web-based tools
and processes. The collaborations will be formed by means of a 'services marketplace' where
lead firms will find the world's best 'knowledge purveyors' - suppliers of information,
components, and support services" (Center for Innovation and Product Development 2000). This
dispersed "market-oriented" structure is a new reality for many current industrial organizations
who must transform from fully-integrated, centralized organizations into loose networks of
suppliers and sellers utilizing just-in-time collaboration to develop and manufacture new
products and services world-wide. Established theories of innovation based on centralized,
integrated business operations must be re-examined.
An analysis of the current construction industry provides a unique opportunity to analyze
the inter-organizational nature of the prophesied globally distributed teams. In construction,
temporary organizations of allied firms join together for the express purpose of completing large,
complex projects. Construction project teams are formed by many different firms specializing in
specific functions or areas of expertise - the "knowledge purveyors." Despite the size,
complexity, and inherent risk involved in the projects, project teams still innovate despite their
temporary organizational nature.
1.1. PROBLEM STATEMENT
Built facilities are composed of many individual components that must work together as a
system for the facility to function properly. Due to the complex nature of construction, built
facilities are typically divided into components or divided along lines according to function.
Generally. one firm is responsible for the design of the components while another firm is
responsible for the construction.
15
A typical approach to constructing a new facility is to hire the designer and the builder
(hereafter referred to as "the contractor") separately. This method of delivering the project is
referred to as the "design-bid-build" delivery method. The objective of this separation of design
and construction is to prevent the possibility of collusion by the designer and the contractor
against the owner. The owner, lacking specialized knowledge in the field of construction, relies
upon the designer and the contractor to check-and-balance one another. The result is the creation
of a potentially adversarial relationship among the three parties that is not necessarily conducive
to collaboration and innovation.
As buildings become more complex and the systems they contain become more
integrated, the more necessary it becomes for collaboration across various disciplines to produce
feasible, fully functional facilities. Complex components require simultaneous design to ensure
the finished systems function as a whole. Once design is complete, the "construct-ability" of the
facility becomes the primary concern. These instances of design and construction integration
require negotiations and collaboration across firm boundaries within the construction project
team.
1.2. RESEARCH OBJECTIVES
The purpose of this research is to identify factors that enhance multi-organizational
project team innovation. The results are expected to isolate relevant factors that influence the
innovation process within a multi-organizational project team. Owners can use this information
to better organize project teams for innovation while construction companies and other
construction industry firms can use this information to evaluate their innovation strategy.
1.3. RESEARCH SIGNIFICANCE
This research is significant because it continues the investigation into factors that
influence the development and implementation of innovation in scenarios that require inter-firm
collaboration. Although recent studies have illuminated the importance of collaborative product
development and the importance of cross-functional collaboration, little attention has been paid
to the implications specifically on the innovation process. Recent trends in manufacturing, where
16
companies are now pursuing ventures outside their own organizations, highlight the need for
empirical studies on the nature of the collaborative innovative processes within multiorganizational project teams. This study intends to yield relevant information regarding
innovation for the construction industry as well as the manufacturing industry that is moving
toward a decentralized model of product development.
1.4. THESIS ORGANIZATION
Chapter 2 is a review of current literature and theory pertinent to any study of project
team collaboration and innovation. Included in this chapter is a review of agency, team,
innovation, and organization theory.
Chapter 3 outlines the study's theoretical framework. A summary of the variables used in
the study are listed and described.
Chapter 4 details the methodology used to conduct this study. The research is empirical
in nature and relies on data generated from case studies of twenty-nine different construction
projects and fifty innovations. Selection of the participating contractors, generation of the
research sample, and data collection process are explained.
Chapter 5 presents the analysis of the project innovations with respect to variables from
the framework developed in Chapter 3. The findings are compared and contrasted with the
theories presented in Chapter 2.
Chapter 6 concludes the study. The factors found significant in influencing multiorganizational project team innovation are summarized. Recommendations are provided for
continuing this line of research.
17
2. LITERATURE REVIEW
Several areas of academic study, including organization and economic theory, are central
to the examination of the nature of innovation in the construction industry. A brief overview of
the pertinent academic theories relating to this research is presented in this chapter.
2.1. AGENCY THEORY
2.1.1. The Principal-Agent Relationship
The principal-agent relationship is a contract under which one party, recognized as the
principal,engages another party, recognized as the agent, to perform some service on the
principal's behalf, an act which involves delegation of the principal's decision-making authority
(Jensen and Meckling 1976).
The centerpiece of agency theory is the principal-agent contract. The principal is charged
with the responsibility of creating a contract that balances the delegation of authority and the
distribution of risk while inducing the agent to perform through incentives. The assumption that
an agent will act in its self interest and avoid the full performance of its duties if possible is
referred to as the moral hazard (Eisenhardt 1989). Agency theory acknowledges the presence
outcome uncertainty in contract relations and emphasizes a close evaluation of risk/reward
tradeoffs to draft an effective principal-agent contract (Eisenhardt 1989).
In the construction industry, most project owners do not maintain design or construction
competencies internal to their own organization. The low frequency of construction activity as
well as the inability to predict with certainty the assets specifically needed for each project deters
any significant investment in design or construction capability (Eccles 198 1a). When
undertaking a new construction project, an owner (the principal)contracts with designers and
contractors (the agents). These agents contract with other agents (i.e. engineers, subcontractors,
etc.) rounding-out the construction project team. The result is the formation of a multi-tier
project team with multiple principal-agent relationships at different levels in the project team
organization.
19
In agency theory, contracts are defined as either behavior or outcome-based. Behaviorbased contracts compensate the agent based upon performance of a specific set of activities or
operations. A "cost plus fee" contract is an example of a behavior-based contract, the payments
are based on the contractor's behavior (i.e., performance of construction activities). On the other
hand, outcome-based contracts compensate the agent for a specific set of results or outcome. A
lump sum contract is an example of an outcome-based contract.
The contract is one of the primary means through which the principal manages risk. The
selection of the contract type depends on the degree to which the behavior or outcome is known
and controllable by the principal (Eisenhardt 1989). Behavior-based contracts keep the owner at
risk. The owner is responsible for monitoring the behavior of the contractor. The risk for the
owner lies in the owner's inability to know the financial impact of specific contractor behaviors
on the overall construction project. Outcome-based contracts place the contractor at risk. The
contractor is responsible for the construction of an integrated, fully functional facility for a fixed
price. The builder must perform work until the project is delivered, even if it requires the
contractor to take a financial loss to complete the project.
Contracts between the owner and its agents in the construction industry are often
"incomplete," that is, they do not cover every possible contingency that could be encountered on
a construction site. "Incomplete" contracts often contain mechanisms, such as "change orders,"
allowing for "re-negotiation" of all or part of the contract. Incomplete contracts often rely on the
presence of a trilateral governance system to rectify disputes between the principal and an agent
(Williamson 1979). An example of a trilateral governance system is the use of a design-bidbuild delivery method in which the architect is given the authority to oversee the operations of
the contractor.
2.1.2. Multi-Agent Situations
Providing incentives to agent is far more intricate when a project includes a number of
separate tasks. The situation is clouded even more if there happens to be multiple agents. When
using incentives in multitask, multi-agent situations, the tasks must be analyzed in their totality
rather than on an individual basis. Attention given to one task will often draw attention from
other necessary tasks. If the tasks are difficult to measure, the principal may not be able to
20
identify counterproductive efforts introduced into the overall project (a result referred to as suboptimization) (Holmstrom and Milgrom 1991).
Two factors critical to the optimal task structure in multi-agent situations are the strategic
interaction of the agents and their attitudes toward performing multiple tasks. The principal must
utilize interdependent incentive schemes making one agent's contract payments contingent upon
the outcomes of the tasks of other agents. This non-specialized task structure is referred to as
"team production." Team production can be successful when an agent can help another agent at
no cost to itself. More explicitly, an agent may incur costs in completing another agent's task but
the costs incurred by the agent must be outweighed by the agent's overall gains. The danger in
using interdependent incentive schemes lies in the fact that the agents may collude against the
principal. Inducing teamwork among agents also creates a potential problem of "free-riding"
where one agent may respond to outside assistance by reducing its own effort (Itoh 1991).
2.2. CROSS-FUNCTIONAL COOPERATION
The construction industry, like many other industries, joins together a variety of very
different firms with differing specialties (or functions) in order to successfully complete a
construction project. This temporary team of specialty agents participates in "joint behavior
toward some goal of common interest." This behavior is often described as coordination,
collaboration, integration, or cooperation (Pinto and Pinto 1990). Van de Ven (1976) defines
coordination as "integrating or linking together different parts of the organization to accomplish a
collective set of tasks." Trist (1977) defines collaboration as "willingness to align one's own
purposes with those of diverse others.. .rather than trying to coerce and dominate in order to get
one's way.. .and to negotiate mutually acceptable compromises." Lawrence and Lorsch (1967)
define integration as the "quality or state of collaboration that exists among departments that are
to achieve unity of effort."
2.2.1. Mechanisms for Cooperation
Several researchers attempt to identify the individual factors that promote cooperation
among disparate agents in situations where non-cooperative behavior is to be expected. Pinto,
et al. (1993) conduct a study of antecedents and consequences of project team cross-functional
21
cooperation. The researchers study the correlation of five cooperation mechanisms to project
outcomes in projects requiring cross-functional collaboration. The cooperation mechanisms
include super-ordinate goals, physical proximity, team accessibility, use of project team rules,
and use of organization rules. The researchers evaluate project outcomes using two categories:
perceived task outcomes and psychosocial outcomes. The perceived task outcomes are the
traditional measures of success such as "coming in under budget" or meeting project milestones.
Psychosocial outcomes are the views of the team members regarding the success of the project as
well as how they view their relationship with the other team members. The research
demonstrates that super-ordinate goals are a significant antecedent to the project outcomes in
projects requiring cross-functional collaboration. Physical proximity and project team rules are
also found to be significant for successful cross-functional cooperation.
Chen, et al. (1998) suggest that the effectiveness of cooperation mechanisms is contingent
on cultural parameters and the specific employment of cooperation mechanisms within the
context of a specific culture. The researchers discuss the following cooperative mechanisms in
their study: super-ordinate goals, group identity, trust, accountability, communication, reward
structures, and incentives. The study uses individualists and collectivists, essentially cultural
opposites, to portray how specific cooperation mechanisms must be attenuated to cultural
parameters in order to be effective. Individualists require goal interdependence, work toward
self-enhancement, and trust in formal procedures. They prefer cooperation fostered by individual
accountability, muted communication channels, and equity based rewards. Collectivists, on the
other hand, require shared goals, work toward establishing group complementarity, and base their
trust on group identity or bond. They prefer cooperation fostered by group-based accountability,
open communication, and equality based rewards.
Cooperation, at its base, is multiple organizations working together in partnership where
each firm has equal input and equal output, or at least equitable input and output, regarding joint
endeavors. Each organization provides equal or equitable resources to the relationship and walks
away with a fair share of the rewards. On the downside, multiple organizations require multiple
governing structures, multiple decision mechanisms, and pursue varying objectives which can
lead to conflict. Sometimes it is more efficient to combine the organizations into one entity (or
integrate)the organizations. Integrated organizations benefit from the centralized control and
22
management of resources that can efficiently identify objectives and effectively select a means
for achieving those objectives through the use of plans and controls.
2.2.2. Integration in Construction
Nam and Tatum (1992) identify four non-contractual mechanisms of integration
specifically found in the construction industry including strong owner leadership, long-term
relationships, integration champions, and pervasive professionalism. In comparing these
mechanisms to those observed in other industries, it appears that strong owner leadership is
analogous to the super-ordinate goals mentioned by Pinto, et al. (1990) and Chen, et al. (1998).
Long-term relationships refer to recurrent transactions over time between two organizations and
imply the creation of inter-organizational trust or the establishment of group identity. Integration
champions are dedicated workers with the energy and enthusiasm to overcome uncertainty and
the institutional barriers often encountered during integration processes. Professionalism is an
abstract qualification or assessment that the project team members make of one another and
commit to trusting and working with one another based on a shared belief of competence.
One of the most difficult tasks in construction is the integration of design and
construction. Traditionally, the two primary agents responsible for design and construction, the
architect and the contractor, are kept at arm's length from each other to preclude collusion. As
projects have become more complex in terms of increased size, improved performance, and
shortened duration, there has been an increasing recognition of the value of integrating the design
and construction "specialties." "Effective integration requires that construction experts
participate in conceptual development and planning for the project, in making decisions, in
design reviews, and in scheduling and cost estimating." It is expected that if the contractor is
brought on board early in the decision making process, then there will be an optimum use of the
contractor's knowledge in helping to achieve the project's overall objectives (Tatum 1987).
23
Designers
ProducersBrkers
Suppliers
BrDDistributors
Figure 2.1 - The Dynamic Network (Miles and Snow 1986)
2.3. TEAM THEORY AND NETWORKS
2.3.1. Economic Team Theory
Marschak and Radner (1972) define a team as an organization created to achieve an
objective but does not share the same information among its members. The authors define
teamwork as the basic task of optimally acquiring and distributing information. Economic team
theory focuses on the acquisition of appropriate and accurate information and its efficient and
effective transmission. According to the authors, agents attempt to maximize expected payoffs
from the execution of refined activities. The agents maximize learning through following
sequences of identical decision-making processes, approaching "complete" information
regarding decision alternatives. In solving large, complex problems with related high
information costs, a team will attempt to minimize the problem size and receive compensation
while collecting information ("earning while they're learning.")
2.3.2. Networks
A rapidly growing field of research, essentially an expansion of team theory, is the
relatively recent recognition of networks. Miles and Snow (1986) define the dynamic network as
having four fundamental characteristics: vertical disaggre gation, brokers, market mechanisms.
and full-disclosure information systems. Vertical disaggregation describes a situation in which
business functions such as product design and development, manufacturing, marketing, and
24
distribution, typically conducted within a single organization, are performed by independent
organizations in a network (see Figure 2.1).
Brokers play a lead role in assembling the team into a cohesive organization and continue
in that role to subcontract for necessary services. The various major functions are held together
by market mechanisms rather than centralized organizational structures such as plans and
controls. Contracts and payment for results are used rather than progress reports and personal
supervision to induce performance. The dynamic network utilizes broad-access computerized
information systems to mutually and instantaneously verify team member contributions.
Excepting the use of broad-access computerized information systems, the dynamic
network is a good description of the construction project team. The "producer" is the owner and
provides wants, needs, and desires in the form of project specifications. The owner often enlists
the help of a "designer" (e.g. the architect) to develop and refine the specifications. The
contractor acts as the "broker," contracting with the owner and the "suppliers" (e.g. the
subcontractors) to assemble the final product.
Eccles (1981b) qualifies the existence of "quasi-firms" in the construction industry
where general contractors use many subcontractors in multiple construction projects but use only
a limited number of different subcontractors within each trade. In the long run, both the general
contractor and subcontractor share recurrent transactions over extended periods of time
establishing a semi-formal network of construction related companies.
Debreeson and Amesse (1991) laud the network approach in studying innovation because
it provides rich analysis in terms of inter-organizational collaboration and learning. Network
analysis complements team and collaboration theory by investigating the capture and distribution
of information as well as the means and methods of cooperation between the various nodes of the
network. Freeman (1991) adds that trust and confidence as well as cultural factors among
network members must be considered in any network, echoing the remarks of Chen, et al. (1998).
2.4. INNOVATION THEORY
Innovation theory explores the issues associated with the development, design, and
implementation of new and useful products, processes, or services. Freeman (1989) and
25
Slaughter (1998) define innovation as the actual use of a nontrivial change and improvement in a
process,product, or system that is novel to the institution developing the change.
2.4.1. Classification of Innovations
2.4.1.1. INNOVATION TYPES
Tushman and Nadler (1986) identify two basic innovation categories: product innovation
and process innovation. A product innovation is a change in a product or service provided by an
organization. A process innovation is a change in the way a product is made or a service
provided.
2.4.1.2. INNOVATION MODELS
Innovations can also be categorized in terms of their respective change from the state-ofthe-art and their impact upon other components. subsystems, or sequences. Slaughter (1998)
defined five innovation models that respond specifically to the construction industry:
incremental, modular, architectural, systemic, and radical innovation. These models clarify the
extent to which innovations affect an organization and its environment. As an innovation
increases from incremental to radical, the more disruptive and uncertain the impacts of the
innovation on the project and the project team (Slaughter 1998).
An incremental innovation marks an improvement over the current state-of-the art. The
innovation is generally based on current knowledge and can be implemented with little effort.
The impacts of incremental innovations tend to be limited and predictable (Slaughter 1998). An
example of an incremental innovation would be the production of a new crane with a greater lift
capacity to handle heavier construction loads.
A modular innovation involves a significant change in the concept of a component but
does not affect the linkages between system components (Henderson and Clark 1990). An
example of a modular innovation is the replacement of a traditional thermostat with a thermostat
with an infrared sensor. The component can be assembled without input from other specialties
and is installed in generally the same fashion as a traditional thermostat.
26
An architectural innovation is a small change to a single component that also changes the
linkages between the concepts and components of a system (Henderson and Clark 1990). An
example of an architectural innovation is the use of an "up-up" construction sequence for
building construction. The same components (i.e. steel, concrete, laborers, etc.) are used for
construction but the components are assembled in a non-traditional sequence. Instead of
excavating to the bottom basement floor and building up, the basement floor and the ground floor
are put into place and construction proceeds up through the basement and up from the ground
floor simultaneously. The ground floor plays a secondary role as a diaphragm to brace the
excavated hole where basement construction proceeds. Design considerations must be made to
ensure that the ground floor can serve as a diaphragm as well as perform its intended function as
a floor. Although "up-up" construction appears to be a minor change in the construction
sequence, the innovation has major impact on the roles of the various components during the
construction process.
A systemic innovation is the integration of multiple independent innovations that work
together to perform new functions or improve facility performance as a whole (Slaughter 1998).
An example of a systemic innovation would be the creation of a "column-less" venue that relies
on abutment construction, support by a single curved truss arch, and the design and use of a
hinged ball-and-socket joint developed to ease construction of the facility. These three
innovations combine together to create the "column-less" venue.
A radical innovation changes the core concepts and the linkages between the core
concepts and components of a system. A radical innovation in construction from over a hundred
years ago was the introduction of structural steel. Its appearance was unexpected and changed
the type of structures and buildings that could be built. A whole new industry of steel
manufacturing and fabrication emerged as well as new components and systems linked to the
new structural forms and systems (Elliott 1994; Slaughter 1998).
27
2.4.2. Innovation "Clusters"
Slaughter and Shimizu (2000) identify three different forms of innovation "clusters" in a
study of the construction of eleven long span and multi-segmental bridges. The clusters are
related by system, actualizing, or complementary links or may not be related at all. A cluster of
innovations with system links is a multiple group of innovations developed through coordinated
activities to achieve a new function or level of performance. A cluster of innovations with
actualizing links is the realization of an innovation through the use of one or more other
innovations. A cluster of innovations with complementary links provides benefits from the joint
application of the innovations even though the innovations perform independently.
2.4.3. The Hyper-Cube of Innovation
The effect of the development and use of innovation on an organization derives primarily
from an organization's individual perspective (Afuah and Bahram 1995). Various organizations
evaluate the same innovation differently and can associate different costs to specific innovative
activities. An innovation that may be incremental to one party may be architectural to another
and may have no effect on a third. As a result, each party makes a different assessment regarding
the risks, rewards, and impact of any innovation. The hyper-cube of risk, reward, and impact
upon various team members is an important consideration in structuring project team incentives
and rewards and in selecting an appropriate project team organization structure.
2.5. ORGANIZING FOR INNOVATION
2.5.1. The Virtual Organization
The virtual organization is analogous to the aforementioned "dynamic network" where
the parent organization subcontracts outside the organization for capabilities needed to perform
the work required. Chesbrough and Teece (1996) fear that many organizations misunderstand
the concept of virtual organization and are failing to nurture and guard their core competencies,
therefore placing their futures at risk.
28
Exist
Outside
Go Virtual
Ally with
Caution
Must Be
Created
Ally or
In-house
In-house
Capabilities
Autonomous
Systemic
Innovation
Figure 2.2 - Matching Organizationto Innovation (Chesbrough and Teece 1996)
The degree of centralization within an organization has a direct impact on the willingness
or incentive to take risks as well as the ability to settle conflicts and coordinate activities.
Centralized activity provides less opportunity to take risk but the activity is easier to coordinate
and control. Less centralized activity provides more opportunity to take risk but the activity is
harder to coordinate and control. Chesbrough and Teece (1996) maintain that a balance must be
struck between the ability to take risk and the ability to maintain control of an operation.
Organizational decisions with respect to obtaining innovative capabilities are to be made
based on two criteria: the current state of the capabilities required for the innovation and the
nature of the innovation itself (see Figure 2.2). The innovative capabilities either currently exist
outside the organization or must be created. Innovations are considered either autonomous (not
relating to core capabilities) or systemic (relating to core capabilities). If the innovation is
autonomous and the capabilities exist outside the organization, "going virtual" is deemed
appropriate. In any other scenario, going virtual exposes the organization to the strategic risk of
losing a core competency to an external organization. The alternative in these other scenarios are
the creation of formal alliances with existing organizations that have the requisite capabilities or
the use of explicit mechanisms to bring the capability in-house, either through acquisition or inhouse development.
2.5.2. The Learning Organization
Trans-organizational innovation involves generating new knowledge out of knowledge
inputs that are distributed across disciplines and organizations that may be geographically
29
dispersed. Trans-organizational innovation is critically dependent on management processes
associated with learning (Millar, et al. 1997).
2.5.2.1. ORGANIZATIONAL LEARNING AND INNOVATION
Leonard-Barton (1995) posits that the process of learning is the major source for
innovation, specifically theorizing that the ability of an organization to learn provides the
opportunity for discovering new and innovative products and processes. The author identifies
four mechanisms for an organization to generate knowledge: problem solving, implementation,
experimenting, and importing knowledge.
The key to productive problem solving is to create a diverse problem-solving group with
a variety of technical and business skills (not necessarily different backgrounds). The goal in
forming the group is to establish "creative abrasion" where different perspectives can vie in an
open forum to generate optimal solutions to specific problems (Leornard-Barton 1995). In
construction, bringing the contractor on board early in the design process is a mechanism for
establishing "creative abrasion."
In groups with diverse skill sets, persons with "A-shaped" skills and "T-shaped" skills act
as boundary spanners to keep the problem-solving effort moving forward. Persons with "Ashaped" skills know how to translate information from one specialty to another and vice versa.
Persons with "T-shaped" skills have deep knowledge of a particular specialty but also understand
the business process and can translate concerns between the two functions (Leonard-Barton
1995). Cultivating employees with appropriate skill sets quickly becomes a key consideration in
implementing an effective innovation strategy.
The act of implementation itself generates knowledge from experience. User
involvement in the decision making process provides much of the foundation for making an
innovation successful. The timing and intensity of involvement of the various implementers and
users has a significant impact on the development of an innovation (Leonard-Barton 1995). For
example, if a contractor is heavily involved in a project from conception, the contractor has the
ability to influence major decisions regarding design. project layout, use of new materials,
equipment, and/or installation of new systems. Redesign and the resulting increase in costs can
be reduced to an acceptable amount if "joint" decisions are made early in the design process.
30
High
Familiarity
with
Technology
within the
Firm
Outsource
Candidate
Internal
R&D
Little
Investment
External
Acquisition
Low
Low
High
Strategic Importance
Figure 2.3 - Need for External Sourcing of Technology (Leonard-Barton1995)
Experimenting and prototyping is another source of knowledge generation, including
knowledge about innovation. To be beneficial to the learning process, experiments must be seen
as a continuous and ongoing effort and not as a "do or die" affair. The key is not to gain success
through experimenting but to do a great deal of experimentation to generate superior knowledge
upon which success can be based. Even failure in experimenting should be considered success as
long as it is "intelligent failure" or "failure forward." The bottom line is to build a knowledge
base as well as a propensity to identify, evaluate, and assume organizational risk. It is also
important to consider the factors that influence a successful experiment, including the personnel
involved in the experiment, their skills, and the management structure overseeing the experiment
(Leonard-Barton 1995).
Leonard-Barton's (1995) discussion of importing knowledge from outside the firm is
analogous to Chesbrough and Teece's (1996) discussion of virtual organization capability
development. Leonard-Barton bases the decision regarding the acquisition of innovation
capabilities on two factors: the firm's familiarity with the new technology and the strategic
importance of the knowledge to the organization (see Figure 2.3). Familiar technologies can be
outsourced if they have little strategic importance. If the technology is strategically important,
internal R&D should develop it. If the organization is not familiar with the technology, no
investment is to be made for knowledge low in strategic importance while acquisition for
knowledge high in strategic importance is imperative. Understanding the strategic value of
innovations can explain the efforts made by various project team members in learning or
acquiring innovation.
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2.5.2.2. LEARNING MECHANISMS
Kululanga, et al. (1999) examine the use of thirty-five learning mechanisms employed by
construction contractors to foster organizational learning. The mechanisms are categorized into
five separate groups: collaborative mechanisms (mentoring, joint ventures, licensing, etc.); noncollaborative mechanisms (acquisition or take-over): networks (professional, technology based,
etc.); in-house research, reviews, and improvement ("lessons learned," internal/external
benchmarking, etc.); and individual enterprise (staff training, internal/external seminars, etc.)
After studying the operations of thirty-one contractors, the researchers determine that contractors
use very few learning mechanisms to any significant extent. Contractors use partnering, joint
venturing, and corporate mentoring, look primarily to professionally based networks for
acquisition of new knowledge, and review their project successes and failures in conjunction
with in-house research to increase organizational knowledge.
In the study of over four hundred companies, Ruggles (1998) examines organizational
knowledge management and the impact that a manager's perceptions of knowledge can have on
knowledge transfer within an organization. Current knowledge management processes possible
at the company level include utilization of a company intranet, data warehousing, implementation
of decision support tools, utilization of groupware to support collaboration, creation of networks,
mapping of internal expertise, and establishment of "knowledge roles" within an organization.
The biggest barriers to implementing knowledge management come from resistance by
established organization cultures, failure of management to signal the importance of "knowledge
activities," lack of understanding about learning strategies, lack of problem ownership,
inflexibility due to formal organizational structures, and ineffectiveness due to non-standard
processes in knowledge accumulation and distribution.
2.5.3. Organizational Roles
Roberts and Fusfeld (1981) identify several critical organizational roles important to the
development and use of innovation. These roles include idea generators. innovation champions,
gatekeepers or boundary spanners, sponsors. coaches, and mentors. Idea generators creatively
link diverse ideas and can often visualize new approaches to products and processes that lead to
innovation while champions bring these creative ideas to life. Champions are the entrepreneurs
32
that turn innovative ideas into results. Gatekeepers and boundary spanners acquire, translate, and
distribute information vital to the innovation process across the boundaries of the organization.
Sponsors, coaches, or mentors are senior mangers who provide formal support to the innovation
process in the form of the protection of resources required for innovative activity. Roberts and
Fusfield note that these roles are more effective when incorporated in an informal manner and
often become detrimental if formalized.
2.6. SUMMARY
The literature reviewed identifies factors that potentially impact multi-organizational
project team innovation. Agency theory identifies project incentives and risk distributions that
potentially inhibit or induce innovative activity based on an evaluation of the contracts and
delivery methods used to deliver a project. Cooperation theory suggests that presence of the
cooperation mechanisms used by construction project teams will lead to increased cooperation
which, in turn, is expected to lead to increased innovative activity. Team theory and network
theory stress that long-term relationships and trust between the various project team members
allow for increased project team innovation. The literature on organizational learning implies
that the project team members themselves are an important part of the mix and the capabilities
that they bring to the project team can have a significant impact on project team innovation.
Innovation theory provides the barometer for measuring innovation activity.
Categorization of innovation type (e.g. product or process), innovation model (e.g. incremental,
modular, architectural, systemic, or radical) and rate of generation will assist in identifying the
factors that influence multi-organizational project team innovation.
33
3. FRAMEWORK
3.1. RESEARCH INTENT
The intent of this research is to inform and assist general contractors and construction
managers with innovation strategies in construction by identifying factors that influence multiorganizational project team innovation. This research has been developed so that the
independent variables examined are the variables in which the contractor has a reasonable
amount of control, such as choice of contracts and construction delivery methods or
establishment and maintenance of long-term owner-contractor relationships. The dependent
variable in this study is the nature and number of innovations generated on each construction
project. This framework is developed to allow a comparable analysis of the research data so that
conclusions can be drawn regarding the factors that influence the generation and use of
innovations within multi-organizational project teams, specifically from the perspective of the
general contractor or construction manager.
3.2. INDEPENDENT VARIABLES
3.2.1. Agency Theory
Agency theory identifies the relationships between the formal distribution of costs,
benefits, and risk among project team members and provides possible explanations for
innovations generated by a multi-organizational project team.
3.2.1.1. CONTRACTS
The contract is the formal mechanism for allocating costs, benefits, and risk between an
owner and a contractor (Barrie and Paulson 1992). The specific contract type stipulates the
extent to which each team member is willing bear risk and share rewards. The contracts of any
sub-contractor involved in the innovation process are also considered to fully represent the risk
allocation and team member compensation regarding innovation use on a project.
35
3.2.1.1.1. Lump Sum Contracts
A lump sum contract is a fixed-price contract. It is also an outcome-based contract. The
price of the contract is a mutual agreement between the principal and the agent based on the
expected cost of the project. The established price is expected to cover all contingencies. In
construction, under this form of contract, the contractor bears the risk. The contractor must
provide certain "deliverables" for a specific payment even though providing those "deliverables"
may cost more than originally expected due to unforeseen circumstances. This major shift in risk
is only viable in the construction industry when the contractor is afforded a means of relief
through "change orders," which allow a re-negotiation of the price if circumstances significantly
change the original scope of a project.
3.2.1.1.2. Guaranteed Maximum Price Contracts
A guaranteed maximum price or "GMP" contract is also a fixed-price, outcome-based
contract but is noticeably different from a lump sum contract. The price of a GMP contract is
significantly higher than the expected cost of a project. The principal pays for the actual cost of
services performed up to the mutually agreed GMP. The principal maintains a reasonable
expectation of savings, a price below the GMP. The risk to the principal is minimized by the
maximum price secured by the contract. The agent is granted access to additional financial
resources to deal with unexpected contingencies without cause for re-negotiation and its
associated costs. Because the agent is provided with access to additional resources in the form of
a financial buffer, less project risk is transferred to the agent. The principal and the agent share
the risk of the project more equally under this form of contract.
3.2.1.1.3. Cost Plus Fee Contracts
A cost plus fee contract is a reimbursable contract. The contract is also a behavior-based
contract. The principal agrees to pay the agent for all costs incurred during performance of
services plus an equitable fee for performing the services. This form of contract is often used in
situations where the nature or the extent of the work cannot be easily determined prior to
initiation of the project. In construction, the owner agreeing to a cost plus contract is exposed to
significant risk because of the uncertain financial implications. The owner expects the contractor
36
to behave appropriately by completing the project in an efficient and effective manner and must
have complete confidence in the contractor to agree to such a contract.
3.2.1.1.4. Fee Contracts
A fee contract is strictly a behavior-based contract. The principal pays the agent based
upon a specific performance metric (e.g. hourly wage, weekly or monthly fee, etc.) mutually
agreed to by both parties. The fee can be fixed or variable with the same implications as a lump
sum contract or cost plus fee contract, respectively. The key distinction of a fee contract is the
non-transfer of risk to the agent. The agent assumes no risk regarding the outcome of the
services performed. The agent need only perform the required services to receive payment. In
the construction industry, fee contracts are used by owners to obtain the use of design and
construction experts as personal advisors. Because the contractor is not at risk, the contractor can
work on behalf of the owner as an official "agent" or owner's representative.
3.2.1.1.5. Unit Price Contracts
Unit price contracts are a unique tool used when the extent of work (i.e. number of units)
cannot be completely determined but the type of work is known. The principal is able to reduce
uncertainty by "locking" the agent into a unit price but the risk posed by the uncertain amount of
units required to complete the project remains. This contract is best suited for situations where a
reasonable approximation of the required units can be estimated.
3.2.1.2. DELIVERY METHODS
The organizational structure of the project team formally defines the delegation of tasks
and responsibilities (Barrie and Paulson 1992). A project organization's structure outlines the
authoritative relationships within the project organization delineating the role and responsibility
undertaken by each project team member.
3.2.1.2.1. Design-Bid-Build
The design-bid-build (DBB) delivery method is also referred to as the "traditional"
delivery method in the construction industry. The owner hires the design and construction agents
in sequence. This delivery method is designed primarily to deter collusion between the design
37
Figure 3.1 - Design-Bid-Build OrganizationStructure
and construction agents. The designer is hired first, completes the design based on the owner's
inputs, and assembles the construction documents for bidding. The contractor is then hired
strictly for construction purposes. If the owner lacks construction expertise, it is often the
responsibility of the architect to oversee the contractor's performance. Under design-bid-build,
the two primary agents, the architect and the contractor, are positioned in potentially adversarial
roles. Any construction contractor hired as part of a design-bid-build team is ultimately relegated
to the role of general contractor (GC). A general contractor is responsible solely for the assembly
and performance of the construction team.
3.2.1.2.2. Construction Management
Construction management involves the contractor as part of the project team prior to the
construction phase. The construction manager (CM) may be involved in project conception,
early design, detailed design, and construction document preparation. The use of a construction
manager allows the project team to capitalize on the construction expertise of the contractor.
Construction management not only provides a means of integrating the design and construction
processes but also provides a remedy for the strictly sequential nature of the design-bid-build
delivery method.
Construction management occurs in primarily in three different forms: at risk, as agent, or
as owner's representative. Each form specifically defines the role of the contractor in terms of
project responsibility and risk allocation.
38
Figure 3.2 - ConstructionManagement (At Risk) OrganizationStructure
Owner
OwnerCO
Architect
CM(O/A)
Architect
Engineers
Subcontractors
Engineers
Subcontractors
Figure 3.3 - ConstructionManagement (As Agent / Owner's Rep) OrganizationStructure
3.2.1.2.2.1. At Risk
When the construction manager assumes financial responsibility for a project though a
contract, such as a lump sum or GMP contract, the delivery method is referred to as construction
management at risk (CM(R)). Construction management at risk is an appealing contract form
because it sheds risk away from the owner; placing it on the construction manager. The
construction manager is more willing to bear the risk because the contractor can exercise
influence on the scope of the project and is better informed regarding the nature and extent of the
project due to early involvement. As a construction manager at risk, the contractor maintains
control over the construction process (see Figure 3.2).
3.2.1.2.2.2. As Agent / Owner's Representative
In construction management as agent (CM(A)) or as owner's representative (CM(O)), the
contractor bears little risk. As an agent the contractor works as an official "agent" of the owner
39
Figure 3.4 - Design-Build Organization Structure
and is awarded discretionary power similar to the power afforded a legal "power of attorney."
The agent performs services directly for the owner including money management and oversight
of financial transactions. As an owner's representative the contractor serves as the eyes and ears
of the owner, observing and monitoring the performance of the construction team. A fee
contract is generally associated with this delivery method, protecting the contractor's fiduciary
responsibility to the owner. The amount of authority granted to a construction manager, as agent
or as owner's representative, is at the discretion of the owner. However, more often than not,
agents are included in the project team "chain-of-command" while owner representatives
generally serve in purely an advisory capacity to the owner without direct authority over the other
agents (see Figure 3.3).
3.2.1.2.3. Design-Build
The design-build (DB) delivery method is a unique delivery method that explicitly
attempts to integrate the design and construction processes. Either of the two primary agents (the
designer or the contractor) or both agents (e.g. joint venture) can take the lead role and deal
directly with the owner for both agent organizations. The owner benefits by dealing with a single
point of contact for design and construction services but is exposed to possible agent collusion
due to the absence of inherent checks-and-balances found in other delivery methods. The agents
are positioned to capitalize on gains made from integrated design and construction processes. On
the other hand, the use of the design-build delivery method does not guarantee an integrated
40
process or the realization of any gains. This delivery method only provides the opportunity for
integration and the resulting improvements in the construction process.
3.2.1.3. PROJECT COMPLEXITY
Identifying project complexity helps identify specific costs on a construction project and
provides a basis for explanation of team member actions and decisions in relation to their
contractual responsibilities. Project complexity is divided into five different categories: site
access, transportation,construction, contractual, and social (Dodd 2000). Site access
complexity indicates an inability to easily reach the actual point where construction work needs to
be performed, such as performing construction work underneath a thirty-story building.
Transportationcomplexity describes construction projects where transportation of construction
equipment and material to the project site is extremely difficult or costly when using
conventional methods. Construction complexity is used to describe a project that requires
construction activity of a larger size, shorter duration, or at a state-of-the-art that is over and
above a typical construction project. Contractualcomplexity indicates the use of non-standard
contracts or procedures within a construction project team. Social complexity is a reflection of
external sociopolitical factors that have a significant impact on the construction project. Traffic
control, noise pollution, and other environmental factors significantly impact the local area that
in turn can affect the success of the project.
3.2.1.4. PROJECT DRIVERS AND INNOVATION DRIVERS
Cost, schedule, construction performance, buildingperformance, and social factors can
be drivers for a project as well as the reason for innovation use. A "driver" is defined as a
primary factor upon which significant project-related decisions are based. A project that has a
constrained budget that requires cost-moderating actions is driven by cost. A project with tight
time constraints is driven by schedule. Constructionperformance pertains to the performance of
construction activities. A new crane with greater lift capacity would be an innovation designed
to improve construction performance. Building performance refers to performance of the final
constructed facility. If an owner desires a "landmark" building, that requirement could serve as a
driver more important than cost or schedule. Social drivers generally address sociopolitical
41
factors surrounding the project site. A new, noise minimizing pile driver developed for use on a
project located in a residential neighborhood would be considered driven by social factors.
An examination of project and innovation drivers is another means to analyze expected
transaction costs and the distribution of benefits among the various team members. The drivers
of a project can identify which parties are most likely to encourage innovation and are willing to
assume specific transaction costs to pursue the innovation. Analyzing innovation drivers
provides a means of observing whether the innovation is the result of a project driver, the
solution to a specific project complexity, or satisfies some other purpose.
3.2.2. Inter-organizational Cooperation
3.2.2.1. PROJECT TIMELINE
The timeline of project events, including the entry of the contractor and relevant subcontractors, is indicative of the relative involvement of each team member in the innovation
process. Timing of entry is recorded as either early or late. Early entry is defined as entry during
either the conception or design phase of a construction project. Late entry refers to entry during
either the pre-construction (including detailed design) or construction phase of a project. Early
entry allows greater opportunity for collaboration and integration of the design-construction
process. Greater collaboration and integration is expected to lead to greater innovation in
number and extent.
3.2.2.2. SUPER-ORDINATE GOALS
A super-ordinate goal is a goal "that is urgent and compelling for all groups involved but
whose attainment requires the resources and efforts of more than one group" (Pinto, et al. 1993).
Given the nature of the construction project team, there are several typical super-ordinate goals
for every construction project. These goals often relate to staying under budget (cost),
completing the project on time (schedule), and delivering a functional built facility (quality or
performance). For the purpose of this study, these "traditional" goals are not recognized as
super-ordinate goals. A super-ordinate goal, for this study, is defined as either a pronounced
emphasis of one or more of the traditional construction project goals in conjunction with extreme
42
circumstances or a pronounced project goal outside the realm of the traditional construction
project goals. Completing a project on schedule would not be considered a super-ordinate goal,
whereas, attempting to construct a courthouse in less than a year when a typical courthouse
requires three years to complete would be considered a super-ordinate goal.
3.2.2.3. CO-LOCATION
This measure indicates the presence of significant team members being located within
close physical proximity of one another for the express purpose of team cooperation. For
example, co-location could require the designer and the contractor to both be located on the
construction site to respond quickly to unexpected or unforeseen events.
3.2.2.4. TEAM INTEGRATION
Team integration describes the level of cooperation between various team members
serving as a direct measure of the type and intensity of cooperation occurring within a project
team organization. The level of team integration is captured to differentiate the level of activity
required for the development and implementation of the various innovations. The level of team
integration is divided into three categories: communication, coordination,and collaboration.
Communication is primarily the passing of information in one direction between two parties.
The information is generally communicated along project team organization lines. Coordination
requires two-way communication to ensure successful completion of required tasks and often
requires stepping outside the bounds of the project team's formal lines of communication. For
example, an electrician may talk directly with the electrical engineer to clarify specific points in
the construction drawings. Collaborationis similar to coordination except that the form of
communication requires some type of joint problem solving between multiple parties where each
party provides valuable input in developing and/or using an innovation. An example of
collaboration would be a open discussion between a construction manager, a structural engineer,
and a steel erector exploring conceptual designs for the erection of a non-standard structural
system.
43
3.2.3. Networks
For this research, the project team is viewed as the physical manifestation of a network of
multiple design and construction firms. The following specific measures attempt to recognize
the persistence of any "quasi-firm" networks despite the temporary nature of each individual
project.
3.2.3.1. TEAM RELATIONSHIPS
Three contractor relationships are examined regarding specific project innovations.
These include the relationship with the owner of the construction project, the relationship with
the designer or vendor responsible for "creating" the innovation, and the relationship with the
sub-contractors (if any) responsible for the implementation of the innovation on the construction
site. The degree of each relationship is categorized as strong, stable, or new. The relationship is
considered strong if the two parties have worked on five of more projects together within the last
ten years and maintain a positive working relationship. The relationship is considered stable if
the two parties have worked together on two to five projects within the last ten years. The
relationship is considered new if the two parties worked together on only one project or less
within the last ten years.
3.2.3.2. TEAM MEMBER SELECTION
In the construction industry, owners have a variety of ways of selecting their agents. For
this study, contractor selection was recorded as open bid, short list, or negotiated. Open bid
indicates that any contractor could bid to participate in the project. Although the candidates may
have been narrowed down through a screening process, the distinction remains that any party
could initially participate. Short list indicates that a limited number of contractors were
approached by the owner and subsequently competed with one another in terms of cost and
capability to participate in the project. Negotiated indicates that the contractor was directly
approached by the principal to participate in the project and did not have to compete for the job.
The selection of team members is another indicator of relationships between various firms and is
indicative of an informal construction team network as well as a measure of trust between the
team members.
44
3.2.3.3. REPEAT PROJECTS
This measure captures the intention of the project team to work together in the future on a
similar project. Repeating a project changes the expected longevity of the team's relationships as
well as creates a different perspective when analyzing the distribution of costs, benefits, and risks
on a construction project, specifically when the benefits of an innovation can be extended over
more than one project.
3.2.4. Organizational Learning
The following variables capture the construction manager or general contractor's
"innovative posture" and knowledge processes relating to innovation.
3.2.4.1. ORGANIZATION CAPABILITY
Several measures are used to obtain a sense of a contractor's capabilities in terms of
resources and decision-making processes.
The organization's approach to managing personnel with respect to project teams is
indicative of the company's approach to cultivating employee knowledge. Contractor project
teams (typically the project executive, project manager, and project superintendent) are
categorized as either temporary or permanent. Permanentteams lead to specialization of
personnel in specific niches in the construction industry while temporary teams emphasize the
need for organization personnel to develop diverse backgrounds.
The depth of an organization is representative of the expertise available to the
organization. It is also indicative of the organization's willingness to keep a reserve of resources
to deal with unforeseen circumstances. Contracting organizations typically employ project
executives, project managers. project engineers, superintendents, foremen, and laborers.
The purchasing activity of a contractor is categorized as either centralized, decentralized,
or balanced. Decentralization is indicative of the autonomy and flexibility provided the project
team, while centralized procurement indicates an emphasis on efficiency and streamlining. A
balanced procurement operation allows individual project managers to "shop" their own project
45
while a small group within the parent contracting organization provides procurement support to
the project team.
3.2.4.2. INNOVATIVE CAPABILITY
Seven specific attributes of each contracting organization characterize the organization's
"innovative posture." Each attribute is evaluated with respect to its degree of formalization,
specifically asformal or informal in nature or as not present. The following attributes are
investigated specifically regarding innovation: a specific organizationpolicy; organization
teams for innovation, knowledge management, benchmarking, and best practices; in-house
research efforts; and individual and organizationalincentive and reward structures.
Eleven "knowledge processes" characterize the organization's capacity to capture, store,
and disseminate information. These attributes are also evaluated according to their degree of
formalization in the organization. The following knowledge processes are examined: the
development and use of a company intranet,use of data warehousing,development and use of
decision support tools, possession and use of groupware,use of internal and external networks,
mapping of expertise across the organization, designation of mentors, conduct of knowledge
training, use of learning-orienteddiscussions, and conduct of internalassessments and audits.
Knowledge training, which is often misinterpreted as standard job training, is training
organizational personnel to use information management systems, explaining why information
management is important, and demonstrating how to maintain the information system so that it is
useful.
3.3. DEPENDENT VARIABLES
Each innovation in this study is matched to an innovation type and an innovation model
to use for comparative analysis.
3.3.1. Innovation Types
Each innovation is classified as a product or process innovation. In order to clarify the
nature of the innovation, each category is further refined into two additional categories. A design
innovation (a subset of product innovation) is strictly an innovative design. Product innovation
46
is a physical manifestation of an innovation. Process innovation refers to innovative changes in
physical construction processes while management innovation (a subset of process innovation)
refers to innovation in the administration of the construction process.
3.3.2. Innovation Models
Innovation models define the nature and the impact of an innovation on the construction
project team. Innovation models also identify the type and the amount of risk associated with the
innovation. Each innovation is evaluated from the perspective of the contractor. Innovations are
identified as either incremental,modular, architectural,systemic, radical,or as having no impact
(on the contractor). Innovation models are also recorded considering the perspective of the
owner and the team member responsible for an innovation's implementation (see Appendix B).
3.3.3. Innovation Clusters
Analyzing relationships between multiple innovations used on the same project provides
another perspective for understanding a project team's development and use of innovation.
Multiple innovations identified on projects in the sample are categorized as systemic, actualizing,
complementary, or not related.
47
4. METHODOLOGY
This study was conducted using a methodology to ensure the collection of valid, accurate,
and reliable data. The research process was purposely structured to allow this study to be
replicated for validation, refinement, and future exploration.
4.1. A CASE STUDY APPROACH
This investigation is predominantly exploratory in nature and requires a 'broad-brush'
approach to identify the relevant factors influencing multi-organizational project team
innovation. Case studies are used to explore the rich contextual nature of each construction
project in the study. Each project is complex and its outcome is often dependent upon a number
of different variables - including unforeseeable events such as the presence of difficult
underground conditions, delays and disruptions due to weather, and project team disputes.
Knowledge about means and methods in the construction industry is considered very tacit
in nature. Most construction industry professionals acquire their professional knowledge
primarily through experience. In this "hands-on" environment, the use of case studies provides
the opportunity to uncover rich sources of information not recorded in any other form. The case
study approach also "generalizes" the construction projects allowing parallels to be drawn to
other industries.
4.2. AN EMPIRICAL STUDY
This study uses empirical data derived from real construction projects to identify and
analyze factors that influence multi-organizational project team innovation. The data for this
study is generated from the shared experiences of the various project team members interviewed
for this research. The data was collected and organized to allow for simple statistical analysis to
identify the relevant factors that influence multi-organizational project team innovation.
49
4.3. LITERATURE REVIEW
The first step in this research required an extensive review of existing literature regarding
inter-organizational collaboration, project team organization, and innovation. Several areas of
academic theory were reviewed in order to thoroughly capture the dynamic nature of this subject,
including organization, economic, management, and innovation theory (see Chapter 2). This
review of current literature enabled a rough approximation of the factors considered influential
on multi-organizational project team innovation (see Chapter 3).
4.4. PROJECT SELECTION
This research specifically focuses on the general contractor and the construction manager.
The difference between a construction manager and a general contractor is subject to debate. As
a construction manager, the contractor provides services to the owner in the form of construction
expertise. The contractor, aside from assembling and managing the construction team, is
expected to act in the owner's best interest and assist the owner in making project-related
decisions. The construction manager is often made a part of the construction project team early
in the project cycle so that the contractor's contribution to the project team is maximized.
The general contractor, on the other hand, primarily serves to assemble and manage the
construction team. The design and construction processes are more clearly divided. The
designers complete the design and "toss it over the wall" to the general contractor. The general
contractor has little input during the design process and once on board, focuses primarily on
completing the project by the most efficient and effective means possible. For the general
contractor, making decisions in the best interest of the owner is not so much a responsibility as it
is just good business practice. Although the difference between the terms "construction
manager" and "general contractor" is debatable, the two terms generally encompass the same
duties and responsibilities on the construction site and are presumed to be synonymous for the
purpose of this research.
In almost every situation, the contractor is ultimately responsible to the owner for the
delivery of a fully functional, built facility. The contractor is responsible for the transformation
of a design into a physical product. The contractor assembles and manages the construction
50
team, managing all construction operations with an eye on controlling cost, quality, and schedule.
The contractor also serves as the interface between the owner and the rest of the construction
team. As a result, the contractor is generally the most knowledgeable project team member
regarding project procedures, timelines, and events. The contractor is also the most likely to be
familiar with the project team organizational structure, the various contract relationships, and the
details pertaining to the participation of relevant team members in the development and
implementation of innovation. The centralized nature of the contractor'role provides sound
reasoning for centering this study on the role of the contractor.
4.4.1. Reducing the Field
In order to eliminate the varying factors of different types of construction, the sample
concentrates on large occupied buildings constructed for non-industrial activities (e.g. office
administration, education, research and development, and entertainment). The research is also
limited to the geographic region of New England to reduce the influence of geographical and
environmental factors on project performance as well as to facilitate timely and thorough
collection of project data.
4.4.2. Organizational Structure and Capacity
To determine if organizational structure, size, and/or capacity has an effect on project
team collaboration, the contractor's participating in this study are deliberately selected with
respect to the extent of their geographic market (see Table 4.1). Each contractor brings a
different perspective and a different set of capabilities to the construction process.
4.4.3. The Data Sample
The companies participating in this study were approached and presented with the
description and objectives of the intended research. After each company agreed to cooperate and
participate in the study, an interview was scheduled with an appropriate company representative
(see Table 4.2). A brief interview was conducted with the company representative to ascertain
which recent construction projects either explicitly used innovation or would most likely have
51
Company
Bovis, Inc.
Beacon Skanska USA
Gilbane
Tishman Construction Corporation
Turner Construction Company
George B. H. Macomber Construction
Kennedy & Rossi, Inc.
*
Geographic Market
International
International
National
National
National*
Local
Local
During the course of this research, Turner Construction
Company has become a wholly owned subsidiary of
HOCHTIEF AG, an internationalconstruction company.
Table 4.1 - Research Participants and Geographic Market
Name
James M. Becker
Joseph R. Farrell III
Denise M. Marien
Tom Comeau
Kenneth H. Stowe, P.E.
Daniel P. McQuade
William F. Sowa
Company
Beacon Skanska USA
Bovis, Inc.
Gilbane
Kennedy & Rossi, Inc.
GBH Macomber
Tishman Construction
Turner Construction
Position
President / CEO
Senior Vice President
Marketing Manager
Vice President
Marketing
Senior Vice President
Deputy Operations Manager
Location
Boston, MA
Boston, MA
Providence. RI
Lexington, MA
Boston, MA
Boston. MA
Boston, MA
Table 4.2 - Senior Management Contacts
included the use of innovation. A minimum of three projects from each company was selected
for detailed investigation.
4.5. CASE STUDIES
Based upon the literature review, a semi-structured interview was generated to acquire
relevant information about each construction project.
4.5.1. Primary Interviews
Primary interviews were conducted in person or by phone at the convenience of the
person being interviewed. The primary interviews were conducted with the contractor's project
manager, or designated representative, for each project in the study (see Table 4.3). The project
manager was often accompanied by either a representative of the owner's organization or the
52
Project
Boys & Girls Club
Brockton Trial Court
GelTex Laboratory
Harvard Housing
Hilton Hotel - Logan
SFX Pavilion
10 St. James Place
Basketball Hall of Fame
Millennium Place
Brookline High School
Cambridge Hospital
The Learning Corridor
Pearle River Data Center
Genzyme Tissue Repair
MIT - Building 11
Perceptive Biosystems
Tufts Medical Health Center
Dartmouth Science Complex
EMC - Franklin
Boston College - Higgins Hall
IMAX Theater
4 Times Square
Elevated Walkways
Hilton Hotel - Logan
Wang Theater
Astra Gate House Park
Trinity Condominiums
Northeastern University Dorms
WTC - East Office Building
Company
Beacon Skanska USA
Beacon Skanska USA
Beacon Skanska USA
Beacon Skanska USA
Beacon Skanska USA
Beacon Skanska USA
Bovis. Inc.
Bovis, Inc.
Bovis, Inc.
Gilbane
Gilbane
Gilbane
Gilbane
Kennedy&Rossi, Inc
Kennedy&Rossi, Inc
Kennedy&Rossi, Inc.
Kennedy&Rossi, Inc.
GBH Macomber
GBH Macomber
GBH Macomber
GBH Macomber
Tishman Construction
Tishman Construction
Tishman Construction
Tishman Construction
Turner Construction
Turner Construction
Turner Construction
Turner Construction
Name
Bill Cunniff
Derrick Menier
Bill Cunniff
Raymond Chesley
Todd Kotay
Gino Barroni
Jeff Higdon
Bob Sanders
Bob Sullivan
Sue Kwalanf
Dick Royal
Mike Small
Scott Goode
Bryan Baynes
Rich MacNamara
Bryan Baynes
Tom Winterhalter
Dan Lenyo
Alan Steinberg
Jim Loud
Dan Lenyo
Mel Ruffini
Deborah Caminiti
Jack Rosetti
Randy Pitts
Dave Page
Tom Duckett
Mike Gallivan
Ted Fire
Position
Project Manager
Project Manager Project Manager
Project Manager
Asst. Project Manager
Project Executive
Project Manager
Project Manager
Project Manager
Project Executive
Project Manager
Project Manager
Program Manager
Project Manager
Project Manager
Project Manager
Project Manager
Project Manager
Project Manager
Project Manager
Project Manager
Senior Project Manager
Project Manager
Project Manager
Project Superintendent
Project Manager
Project Engineer
Project Manager
Project Manager
Table 4.3 - Primary Interviews
project site superintendent to ensure that project information discussed during the interview was
accurately communicated. The primary interviews were used to obtain as much project
information as possible, to identify innovations used on the project site, and to 'get the story'
behind the development and implementation of any project innovations.
4.5.2. Secondary Interviews
Secondary interviews were conducted with other project team members in order to 'round
out' the information concerning the development and implementation of any project innovations
and to corroborate the information obtained from the primary interviews (see Table 4.4).
53
Project
Boys & Girls Club
Boys & Girls Club
Brockton Trial Court
GelTex Laboratory
GelTex Laboratory
Harvard Housing
Harvard Housing
SFX Pavilion
10 St. James Place
Basketball Hall of Fame
Millennium Place
Brookline High School
Brookline High School
Cambridge Hospital
Pearle River Center
Genzyme Tissue Repair
MIT - Building 11
Tufts Medical Health Center
Dartmouth Science Complex
EMC - Franklin
EMC - Franklin
EMC - Franklin
IMAX Theater
4 Times Square
Elevated Walkways
Hilton Hotel - Logan
Wang Theater
Astra Gate House Park
Trinity Condominiums
WTC - East Office Building
WTC - East Office Building
Company
Beacon Skanska USA
LeMessieur Consulting Engineers
Beacon Skanska USA
Beacon Skanska USA
GelTex Laboratories
Beacon Skanska USA
CBT
Bureau Happold
Bovis, Inc.
Bovis, Inc.
Bovis, Inc.
Richard D. Kimball Company
Jupiter Electric
Gilbane
Gilbane
Air Flow Associates. Inc.
Kennedy&Rossi, Inc
Zaldastoni
GBH Macomber
CanAm Steel
Gorman Richrdson Architects
Shooshonian Engineer Associates
GBH Macomber
Earth Day New York
Tishman Construction
Tishman Construction
MARR Scaffolding Company
Richmond Group, Inc.
Turner Construction
Turner Construction
Pembroke Real Estate
Name
Bob Shaker
Phil Banning
Bernie Morrisey
Bob Shaker
Charlie Boyd
Eric Ewer
Jim McBain
Craig Schlitter
Mike Lally
Steven Lew
Tim Irving
Greg Kittering
Jimmy Marshal
Alan Burne
Richard Slosher
Steve Paccioretti
Rich MacNamara
Ben Gunther
Dan Lenyo
John Snow
Andrew Deshains
Paul Taylor
Kenneth Stowe
Pamela Lippe
John Barry Chase
Tom Ericson
Bill Triscoll
John Wiley
Mark Dirksmeier
Mark Dirksmeier
Bob Wells
Position
Project Executive
Structural Engineer
Project Executive
Project Executive
Facility Manager
Project Superintendent
Architect
Structural Engineer
Geotechnical Engineer
Structural Engineer
Project Engineer
Electrical Engineer
Owner
Program Manager
Electrical Engineer
Airflow Technician
Project Manager
Structural Engineer
Project Manager
Fabricator
Architect
Engineer
Project Executive
Consultant
Senior Project Manager
Senior Project Manager
Sales Representative
Architect
Project Executive
Project Executive
Vice President
Table 4.4 - Secondary Interviews
4.5.3. Case Studies
The information obtained from the interviews was compiled into case studies (see
Appendix A). Each case study consists of a brief description of the project, descriptions of any
identified innovations, and an organization chart and timeline specifically regarding the
development and use of innovation.
54
4.6. DATA ANALYSIS
The collected data was arranged in matrix form (see Appendix B) to simplify analysis.
The data was analyzed using simple frequency statistics to identify the factors that influence
multi-organization project team innovation. The statistical results are enhanced by the rich
contextual case studies that provide 'the story'behind significant findings and assist in the
explanation of anomalous results.
4.7. DATA VALIDATION
The primary source of information for each project was the project manager of the
appropriate contracting organization. The project manager, central in overseeing and managing a
project, is a logical choice for conducting a primary interview. Secondary interviews were
conducted with other project participants to confirm the validity of the information from the
primary interviews as well as to obtain 'the whole story' regarding project-specific incidents or
events.
In construction, the innovation development and implementation process is complex and
dynamic. The use of a relatively small sample of detailed case studies is appropriate because it
allows for a more comprehensive investigation of the variables that influence multiorganizational project team innovation. This approach is particularly effective for this line of
research since the variables are yet undefined.
4.8. DATA REPRESENTATION
Even though the projects chosen for the case studies were restricted by type and location,
the data collected for this research is representative of many projects in the construction industry.
The data is also representative of projects in other industry sectors, specifically where project
teams are composed of multiple organizations that are temporarily joined to deliver specific
products and/or services. Many of the project factors analyzed in this study, including contracts,
project team organization structure, and project context, are common to all project efforts,
regardless of project type or location.
55
5. RESULTS
Project case studies can be found in Appendix A. Each case study contains a summary of
one construction project and any innovations identified in conjunction with the project. Project
organization charts and timelines are also included. Appendix B contains a table with the
specific outcomes of the various measures for each project and innovation.
5.1. THE PROJECTS
The following discussion characterizes the construction projects and project teams
included in this study. Project complexity and project drivers provide a general description of the
various projects. Contract types and delivery methods characterize the nature of the different
project teams.
5.1.1. Agency Theory
5.1.1.1. CONTRACTS
The contract types, both project and innovation specific, provide information regarding
the allocation of risk and responsibility.
5.1.1.1.1. Project Contracts
In the projects reviewed, the GMP contract is clearly the preferred project contract over
other contracting methods (see Table 5.1). This finding, coinciding with agency theory,
identifies what appears to be the optimal contract generally used in the construction industry.
The GMP contract represents "middle ground" for both the owner and the contractor. The GMP
contract reduces the risk of the owner, limiting the owner's financial exposure. The contractor is
amenable to the GMP contract because it provides a financial "buffer" in the form of a
"maximum" price as opposed to a more restrictive lump sum contract.
A closer analysis of the other contract types provides a reasonable explanation of
"deviation" from the optimal GMP contract. The lump sum contracts in the study result from
public procurement laws that oversee public or quasi-public projects. Lump sum contracts are
57
Contract Type
Number of Projects
Lump Sum
Guaranteed Maximum Price (GMP)
Cost Plus
Fee
TOTAL
Percentage
2
7%
19
2
6
29
65 %
7%
21 %
100%
Table 5.1 - Project Contracts
used on projects because they are specified by procurement regulations. These contracts are very
risky for the contractor and appear to be used only when no other alternative is available.
The projects in this study that utilize cost plus fee contracts are exemplary of the
"incomplete" contract explained by agency theory. One cost plus fee contract is used in a
renovation of a facility registered as a historic landmark where the exact extent of the work
necessary to protect the landmark during renovation could not be determined before initiation of
the actual construction work. The other cost plus fee contract involved the design and erection of
a structural system so unique in concept and design that the exact cost of construction could not
be determined. In both cases, the owners were willing to bear a preponderance of the risk in
undertaking the projects.
Although fees were the second most used form of contract, the large number of fee
contracted projects is slightly misleading. Four of the fee-contracted projects are performed by a
contractor that prefers to serve as an agent or owner's representative maintaining a fiduciary
relationship with the owner. Two other projects that use a fee contract are public in nature where
the contractor was hired for "design services" to serve on behalf of the owner. Use of a fee
contract on a public project minimizes potential adversarial tensions between the owner and the
contractor by eliminating the constriction of a lump sum contract typically specified by
procurement regulations.
The remaining projects that use fee contracts result from a particular strategy utilized by
one of the contractors. The contractor generally serves as a construction manager as an owner's
representative (a program manager) for large institutional clients. When a specific project is
initiated, the contractor migrates into the role of a construction manager at risk, working under a
GMP contract. In the remaining fee-contracted projects, the contractor did not make the
58
Contract Type
Number of Innovations
Percentage
31
15
62%
30%
LumpSum
GMP
Cost Plus
Fee
Unit Price
TOTAL
2
1
1
4%
2%
2 %
50
100%
5
7
11
2
2
13
4
1
2
1
1
1
13
13
2
19
2
2
Table 5.2 - Innovation Contracts
transition from construction manager as owner's representative to construction manager at risk.
In one project, the owner opted to directly contract the construction project to a third party while
keeping the contractor as an owner's representative in strictly an oversight role. In the other
project, the contractor served as a construction manager as agent in compliance with procurement
specifications regulating the project.
5.1.1.1.2. Innovation Contracts
The party responsible for the actual implementation of an innovation faces a large amount
of the uncertainty induced by an innovation and shoulders a large part of the responsibility for the
innovation's success. For example, an electrician may be responsible for the installation of a
new thermostat while the contractor is responsible for the implementation of an innovative "upup" construction sequence.
Almost all of the innovations were implemented by project team members under either a
lump sum or GMP contract (see Table 5.2). The contract forms are outcome-based contracts and
their use in delivering innovations appears to contradict agency theory. Under outcome-based
contracts, agents are expected to reluctantly perform their duties and are expected to take extra
care to avoid risk. Agency theory predicts use of outcome-based contracts would discourage an
agent from participating in innovative activity. Contract types are reflective of the extent of
innovation, with a few exceptions. One of the radical innovations is a social solution on a project
59
Delivery Method
Design-Bid-Build
Construction Management (Risk)
Design-Build
Construction Management (O/A)
TOTAL
Number of Projects
3
16
2_7
8
29
Percentage
10 %
55 %
-
%
28 %
100%
Table 5.3 - Project Delivery Methods
far removed from the nature of construction (a simple solution, but radical.) The other radical
innovation was implemented by the creator of the innovation (less risk). The innovation causing
no impact but implemented under a cost plus contract was a situation where an owner directly
hired a specialty subcontractor in conjunction with the project team. The difficult innovation
work was natural for the subcontractor (no impact) but would have been difficult for the general
contractor of construction manager to oversee (architectural at a minimum). Agency principles
hold true.
5.1.1.2. DELIVERY METHODS
Construction manager at risk is the predominant choice of delivery method followed by
construction manager as agent or owner's representative with design-bid-build and design-build
following far behind (see Table 5.3). Agency theory provides a nice framework for the results,
but instead of centering on an optimal contract, the discussion turns to an optimal project
organization concerning the allocation of risk distribution, incentives and rewards. Construction
management at risk is effective in benefiting the owner in the form of early contractor input as
well as placing the risk where it can best be managed, on the contractor.
Use of the other delivery methods can be explained as an effort to optimize the project
organization to address specific project concerns. One of the three design-bid-build projects is
mandated by public procurement regulations. The other two design-bid-build projects are
renovations conducted by a contractor, reputed for solid renovation work, where the extent and
nature of the renovations were easily determinable. The observance of two design-build delivery
projects is misleading. The projects are labeled as design-build deliveries because the contractor
and design agent work together as a single entity but the agents are unable to capitalize on the
60
1
GMP
2
16
1
2
19
_ LumpSum
Design-Bid-Build
CM(R)
Design-Build
CM(O/A)
TOTAL
1
Cost Plus
Fee
2
6
2
6
TOTAL
3
16
2
8
29
Table 5.4 - Cross-Tabulation of Project Delivery Methods and Project Contracts
integration of the design and construction functions. The projects are so explicitly detailed that
the design-build teams are prohibited from being truly involved in the design process.
5.1.1.3. DELIVERY METHODS AND PROJECT CONTRACTS
Matching project contracts to project delivery methods highlights the nature of
construction projects to be consistent with the premises of agency theory. The most popular
match is the marrying of the GMP contract with the construction manager at risk delivery method
(see Table 5.4). This combination provides a unique balance of distributing responsibility risk
while providing the benefits of early cross-functional integration as well as a financial reserve for
unexpected contingencies. Fee contracts and construction manager as agent or owner's
representative is the second most prevalent match. This popular combination places the
contractor in a fiduciary role serving the owner under a behavior-based contract. The other
outlying pairs can be cited as responses to specific project conditions or resulting from specific
contractor strategies as explained earlier. The most unlikely match recorded is the use of a lump
sum contract with a design-build contract. This match-up restricts the design process by placing
a "low-end" cap on the overall project. The construction team on this project had a difficult time
dealing with the tough financial constraints on the project, and so, the project team innovated to
resolve the issue.
Using the results from the project sample, defining the contractor's level of responsibility
is the key to explaining the match between a project contract with a specific project delivery
method. When the contractor is responsible for the outcome of the project (e.g. design-bid-build,
construction manager at risk, design-build) the contractor is contracted under an outcome-based
contract. When the contractor is not responsible for the outcome of the project (e.g. construction
61
Project Complexity
Access
Transportation
Construction
Contractual
Social
None Identified
*
Number of Projects
10
3
13
1
9
1
Percentage*
34 %
10 %
49 %
3%
31 %
3%
Total does not equal "100%" because some projects have
more than one form of complexity.
Table 5.5 - Project Complexity
management as agent or owner's representative) the contractor is contracted under a behaviorbased contract.
5.1.2. Project Descriptors
5.1.2.1. PROJECT COMPLEXITY
The most common forms of complexity found across the different construction projects
are access, construction, and social forms of complexity (see Table 5.5). Examples from the
project sample of site access complexity include skyscraper construction in Times Square, New
York and installment of a swimming pool and new basement floor in an existing, one-hundred
year-old, multi-story building. Construction complexity revealed itself on challenging projects
like the one project located over a body of water. Social complexity was evident in many various
forms such as in the project that required construction across town lines and was governed by
two separate local building codes.
5.1.2.2. PROJECT DRIVERS
The high number of projects driven by specific building performance is surprising given
the amount of focus often placed on cost and schedule in the construction industry (see Table
5.6). Overall, the drivers discovered on the projects were present in many various forms except
for construction performance. This result is to be expected. Not many projects require superb
construction at the expense cost, schedule, or quality. The one project where construction
performance was crucial to success involved the construction of a new addition to an "active"
laboratory where critical life-preserving work was being performed. The relatively high number
62
Project Drivers
Cost
Schedule
Construction Performance
Building Performance
Social
None Identified
*
Number of Projects
6
7
1
9
4
6
Percentage*
21 %
24 %
3%
31 %
14 %
21 %
Total does not equal "100%" because some projects have more
than one form of project driver.
Table 5.6 - Project Drivers
Innovation Type
Design
Product
Process
Management
TOTAL
Number of Innovations
18
8
16
8
50
Table 5.7 - Innovation Types
of projects with no identified drivers was specifically due to one contractor unwilling to place
any driver as more important than any other on any specific project.
5.2. INNOVATION OUTCOMES
5.2.1. Innovation Types
Design and process innovations were the most prevalent types of innovation found in this
study (see Table 5.7). This result is most likely influenced by the fact that this study is conducted
from the perspective of the contractor. Design and process innovations inherently cut across firm
boundaries within the project team and are the most visible from the perspective of the
contractor. Studying these projects strictly from the viewpoint of the construction manager does
not guarantee the identification of all innovations used in the data sample. Other innovation
types utilized by other project team members could have been completely missed, such as new
contractor tools (product innovations) or the use of new collaborative design technology by the
designers (management innovations). The innovations observed in this study should be regarded
63
Innovation Model
No Impact
Incremental
Modular
Architectural
Systemic
Radical
TOTAL
Number of Innovations
4
22
4
15
2
3
50
Table 5.8 - Innovation Models
for what they are, innovation types that are specifically relevant to the contractor in the
performance of the contractor's duties, more specifically, innovations that are critical to the
overall function of the final built facility.
5.2.2. Innovation Models
The innovations in this study are categorized with respect to their impact on the
contractor. (The innovations are also classified with respect to their impact on owners and
innovation implementers, see Appendix B). Most of the innovations were incremental in nature
and reflect a general increase in performance or productivity without requiring major changes to
accommodate the innovation (see Table 5.8). The high number of architectural innovations is
partially misleading, resulting from the high number of design innovations found in the sample of
construction projects observed.
5.2.3. Innovation Models and Types
Comparing innovation models with their specific type provides a sense of the overall
impact of innovation on the contractor (see Table 5.9). A majority of the innovations are either
incremental or architectural in nature and appear as a number of different types. It is clear that
some design and product innovations can have no impact on the contractor while process and
management innovations generally impact the contractor, a reasonable finding considering the
nature of design and product innovation and the contractor's centralized role in the construction
process. The two systemic innovations in the sample are embodied in the form of final built
facilities. In a sense, these systemic innovations can be repeated elsewhere with the same
64
Innovation Model
Design
Product
No Impact
3
1
Incremental
7
2
Modular
2
2
Architectural
5
1
Systemic
Process
Management
TOTAL
4
7
6
22
8
1
15
1
16
1
8
4
2
2
1
Radical
TOTAL
18
8
3
50
Table 5.9 - Cross-Tabulation of Innovation Models and Innovation Types
Number of Projects with Innovation Clusters
12
Percent
41 %
Number of Innovations
36
Percent
72%
Table 5.10 - Projects with Innovation Clusters
Number of Projects
Percent
2
1
4
5
17 %
8%
33 %
42 %
System Innovations
Actualizing Innovations
Complementary Innovation
No Relation
Table 5.11 - Innovation Clusters by Type
innovations to create essentially the same "product." Radical innovations, while few, also appear
as a wide array of innovation types.
5.2.4. Innovation Clusters
Approximately one-half of the projects in the sample account for almost three-quarters of
the innovations observed in the data sample (see Table 5.10). A project by project analysis
demonstrates that innovations do "cluster" on construction projects. Multiple innovations can be
found on twelve different projects (see Appendix C - projects 4, 5, 6, 12, 17, 19, 20, 21, 22, 23,
24, and 29). The innovation clusters beg the question of whether or not the innovations within a
cluster are related (see Table 5. 11). Of the twelve innovation clusters, only two projects contain
multiple innovations that are explicitly related to one another, that is, the innovations are
systemically linked and depend on the existence of the other innovations to be effective. One
"actualizing" relationship was discovered where the use of one innovation on a project led to the
65
use of a separate innovation on the same project, where the second innovation would not have
been implemented if not for use of the first innovation. Four innovation clusters were found to
be goal-oriented, that is, the multiple innovations work together independently to achieve the
same desired goal. This goal-oriented clustering is evidence of the use of super-ordinate goals to
foster innovative activity. The remaining five innovation clusters do not demonstrate any
significant relationships among the innovations in their respective clusters.
5.3. THE CONTRACTOR
5.3.1. Innovation "Orchestrators"
Identifying the roles of team members involved in the development and implementation
of an innovation becomes difficult to establish if the development and the implementation of the
innovation involves multiple team members. For example, one construction project required
incoming utility lines to be shielded to protect the facility from unwanted electrical emissions.
The owner specified the performance requirement. Engineers and designers refined the
specifications (specifying insulation materials and dimensions). The contractor, unable to
acquire any prefabricated conduits meeting the required specifications, enlisted the help of the
subcontractors already on-site to fabricate the specified conduits. In such a situation, it is
difficult to identify a clear "innovator." Instead, for the purpose of this study, specific roles were
defined to describe the participation of the various project team members. The above example
results in the following innovation participants: innovation designers (the engineers), innovation
implementers (the subcontractors), and innovation "orchestrators" (the construction manager).
An "orchestrator" is defined as the team member who acts as the central decision authority that
directs the development or use of an innovative process or product.
The contractor acts as the innovation orchestrator in almost one-half of the innovations
found in the project sample (see Table 5.12). This orchestration is reflective of the primary
responsibility of the contractor to organize and manage the construction process. The contractor
has a primary responsibility to ensure that an innovation works within the context of a
construction project when the innovation is critical to the successful completion of the project.
Designers and owners also prove to be relevant innovation orchestrators in the construction
66
Orchestrator
Owner
Designer
GC/CM
Subcontractor
TOTAL
Number of Innovations
9
13
24
4
50
Percent
18 %
26 %
48%
8%
100%
Table 5.12 - Innovation "Orchestrators"
Number of Innovations Planned
Number of Innovations Created In-progress
Total
45
5
50
Table 5.13 - Planned vs. In-progress Innovations
process. Designers orchestrate innovation by creating new designs and remain the orchestrator if
the innovation has little or no impact on the construction team. If the design dramatically affects
the operations of the construction team, the contractor takes over as the innovation orchestrator.
Owners orchestrate innovation by becoming significantly involved in the project by overseeing
team selection, by specifying specific project-related activities, or by directly hiring
subcontractors to work in conjunction with the project team. Sub-contractors orchestrate
innovation when implementing trade-specific innovations that do not impact any other team
members.
5.3.2. Planned vs. In-progress Innovations
A majority of the innovations in this study are "planned" (see Table 5.13). The project
team members are cognizant of the fact that in some way the project is "new." Because the
innovations are planned before construction begins, the uncertainty regarding the use of the
innovation is somewhat reduced. On the other hand, five innovations from the project sample
are developed or utilized after construction is initiated and "in-progress." A majority of these
innovations are responses to unforeseen conditions encountered on a project and result in the use
of an innovation to resolve the issue. In this set of projects, owners contribute to the innovation
process by orchestrating the use of design, product, process, and management innovations (see
Table 5.14). Designers contribute predominantly through design innovation. Contractors
67
Orchestrator
Owner
Designer
Design
1
13
GC/CM
Subcontractor
TOTAL
4
18
Product
4
Process
2
Management
2
TOTAL
9
13
Percent
18 %
26%
1
1
6
11
5
17
34%
7
6
45
12 %
90%
1
14
Table 5.14 - "Orchestrators" of Planned Innovations
Orchestrator
Design
Product
Process
Management
TOTAL
Percent
1
1
2
1
5
10%
1
1
2
1
5
10%
Owner
Designer
GC/CM
Subcontractor
TOTAL
Table 5.15 - "Orchestrators" of In-progress Innovations
Meets Project Complexity
Satisfies a Project Driver
Accomplishes Both
No Clear Match
Number of Innovations
14
24
4
8
Percentage
28 %
48 %
8%
16 %
Table 5.16 - Innovation, Project Complexity, and Project Drivers
contribute by predominantly orchestrating process and management innovations. Subcontractors
make contributions to the team with design, product, and process innovations.
The significant difference between planned innovations and in-progress innovations is
that while all team members contribute to the innovation process with respect to planned
innovations, it is the contractor that is the sole team member that orchestrates any innovative
effort once a construction project is underway (See Table 5.15).
5.3.3. Innovations, Project Complexity, and Project Drivers
In the projects studied, approximately one-half of the innovations explicitly satisfy project
drivers, either the traditional drivers of "cost, schedule, and/or quality" or the more pervasive
super-ordinate goals (see Table 5.16). Over one-quarter of the innovations are used to meet
68
Orchestrator
Solution
Owner
Designer
GC/CM
Subcontractor
TOTAL
*
6
17
4
27
Opportunity
TOTAL
9
9
5
5
2
21
11
22
6
48*
Total is not "50" because two innovations are the result
of "serendipity."
Table 5.17 - Innovation Solutions and Innovation Opportunities
complexities encountered on specific projects and almost one in ten innovations satisfy both
project complexity and specific project drivers. The innovations that accomplish both are
primarily innovations that satisfy project complexities of a social nature that also reinforce
project drivers that demand socially responsible project conduct. While the vast majority of the
innovations respond to specific project requirements, several innovations do not appear to
explicitly match either project complexity or satisfy a project driver. These outliers suggest that
some innovations are opportunistic in nature.
5.3.4. Innovation and Opportunity
An innovation solution refers to use of an innovation to solve specific project related
issues. An innovation opportunity is the use of an innovation to try something new or different
to obtain unique benefits, performance characteristics, minimize project complexity, or satisfy a
project driver that is not required for the successful completion of the project. The use of
photovoltaics on a speculative office building is considered an opportunistic innovation while
using a goldhoffer (a hydraulic powered lift specifically designed as a missile transport) to move
oversized truss frames is considered a solution innovation.
The sample demonstrates that each project team member is willing and able to capitalize
on innovative opportunity (see Table 5.17). Over two-thirds of the innovations orchestrated by
contractors and subcontractors are also solution based. Approximately one-half of the designer
orchestrated innovations are solution based as well. The owner is clearly in a unique position to
focus on opportunistic innovation leaving problem solving to the rest of the project team.
69
GC/CM
A
B
C
D
E
F
G
Number of Projects with
Opportunistic Innovation
1
0
4
2
1
5
0
Percent of Total GC/CM Projects
25%
0%
100%
50%
25%
83%
0%
Table 5.18 - Contractors and Opportunistic Innovation
As a quick side note, a pair of innovations in the project sample is the result of neither
seeking a solution nor capitalizing on an opportunity but rather the result of serendipity. A
designer made conventional decisions to obtain a certain visual effect and as a by-product
obtained acoustic attributes in building performance that were also desirable but not explicitly
sought.
Some contractors appear to explicitly capitalize on innovation opportunity (see Table
5.18). Upon closer inspection, the two contractors associated with the highest number of
opportunistic innovations use two very different strategies in seeking or using opportunistic
innovation. One contractor openly scans for projects that are likely to include innovation based
on the scope of the project while the other contractor takes it upon itself to develop innovations
in-house and bring them to the project team.
5.4. INNOVATION MECHANISMS
5.4.1. Super-ordinate Goals
The results show a marked difference in the number of innovations generated per project
with and without super-ordinate goals (see Table 5.19). Use of super-ordinate goals appears to
significantly encourage the use of innovation.
70
Super-ordinate Goals
Present
Not Present
Number of Projects
Number of Innovations
Average Innovations Per Project
8
21
23
27
2.9
0.8
-
Table 5.19 - Super-ordinate Goals and Innovation
Number of Projects
Number of
Innovations
Average Number of
Innovations Per Project
Early
18
31
1.72
Late
11
19
1.73
Timing of GC/CM Entry
Table 5.20 - Early vs. Late Contractor Entry and Innovation
GC/CM Entry
Number of Opportunistic Innovations
Percent*
Number of Solution Innovations
Percent*
Early
15
30%
16
32%
Late
5
10%
11
22%
*
Total does not equal "100%" because two innovations are the result of "serendipity."
Table 5.21 - Early vs. Late Contractor Entry and Opportunistic Innovation
5.4.2. Inter-organizational Cooperation
5.4.2.1. PROJECT TIMELINE
Whether the contractor joins the project team early or late seems to have little impact on
the total number of innovations generated on any particular project (see Table 5.20). The fact
that three projects with early contractor involvement did not generate any innovation reinforces
the fact that early involvement by itself is not a guarantee of innovative activity.
Although early contractor involvement does not lead to more innovation, there is a
significant increase in the use of opportunistic innovation when the contractor joins the project
team early in the design-construction process (see Table 5.21). The earlier a contractor is
involved in the design process, the more "complete" the information the contractor has about the
project, which in turn reduces the uncertainty with regard to the project and any use of planned
innovation.
71
Cooperative Intensity
Collaboration
Number of Innovations
Early GC/CM Entry
12
Coordination
Communication
Percent
24 %
8
16 %
11
22 %
Number of Innovations
Late GC/CM Entry
5
Percent
10 %
%
2_4
12
24 %
Table 5.22 - Early vs. Late Contractor Entry and Cooperation Intensity
Selection of GC/CM
Number of Projects
Number of Innovations
4
Average Innovations Per Project
1.3
Open Bid
3
Short List
12
17
1.4
Negotiated
14
29
2.1
Table 5.23 - Contractor Selection and Innovation
Early entry of the contractor also appears to encourage more innovations requiring more
intensive forms of cooperative activity (see Table 5.22). A closer analysis of the costs, risks, and
rewards provide an explanation for the surprising high number of late collaborative innovation
efforts. Four of the five collaborative innovations associated with late contractor entry involve
modified construction sequence activities requiring collaboration regarding a facility's structural
design. The centralization of late-entry collaborative innovations around a specific system
suggests that such late collaboration is conventional in the construction industry and is
considered "business as usual." The process may require redesign but the end result is generally
an immediate payment of a small premium for future benefits of cost, schedule, and risk
minimization.
5.4.2.2. CONTRACTOR SELECTION
The use of negotiation in team selection implies an owner's recognition of a competent
contractor. That recognition is due to either the reputation and professionalism of the contractor
or it is developed over a long-term owner-contractor relationship in the form of trust. While the
projects are almost evenly split between selection of a contractor through a competitive process
(open bid and short list) and straight forward negotiation, the number of innovations per project
is significantly greater where contractors are directly approached for specific projects (see Table
5.23).
72
Innovation Model
No Innovation
No Impact
Incremental
Modular
Architectural
Competitive Selection
3
4
8
2
6
Systemic
Negotiation
1
14
2
9
2
Radical
1
2
Table 5.24 - Cross-tabulation of Contractor Selection and Innovation Models
Relationship
New
Stable
Strong
Number of Projects
14
6
10
Number of Innovations
17
11
22
Average Innovations Per Project
1.2
1.8
2.2
Table 5.25 - Owner-Contractor Relationships and Innovation
The innovations on the projects where the contractor is selected through direct
negotiation tend to be more "radical" than the innovations on the projects where the contractor is
selected by competition (see Table 5.24). The outlying radical innovation generated by the
competitive selection process is explicitly developed and implemented by the contractor.
5.4.2.3. TEAM RELATIONSHIPS
Although all owner-contractor relationships demonstrate an ability to produce innovation,
projects with solid relationships between the owner and contractor appear to create opportunity
for generating more innovation (see Table 5.25). The strongest owner-contractor relationships,
present on one-third of the projects observed, generate almost one-half of the innovations in the
research sample.
Strong relationships also allow the project team to pursue more dramatic innovation (see
Table 5.26). Again, the only radical innovation generated by a new relationship is an innovation
specifically developed and implemented by the contractor. Four of the five architectural
innovations in new owner-contractor relationships refer to modified construction sequencing
activities requiring collaboration concerning the facility's structural design.
73
Innovation Model
No Impact
Incremental
Modular
Architectural
Systemic
Radical
New
1
8
2
5
Stable
2
7
2
Strong
1
7
2
8
2
1
2
Table 5.26 - Cross-tabulation of Owner-Contractor Relationships and Innovation Models
Co-Location
In Effect
Not In Effect
TOTAL
*
Number of Projects
2
27
29
Number of Innovations
5*
43
48*
Average Innovation Per Project
2.5
1.6
Innovation total does not include the innovation of co-location itself
Table 5.27 - Project Team Member Co-Location and Innovation
5.4.2.4. CO-LOCATION
Team co-location is observed in only two out of twenty-nine projects in the research
sample (see Table 5.27). Permanent co-location of designers and contractors on the construction
site was considered to be an innovation in and of itself due to development and use of extensive
temporary facilities for design and construction operations. Discounting the "co-location"
innovation, projects with co-location still generated a greater average number of innovations per
project compared to the average number of innovations generated by the rest of the sample. The
complex and tacit nature of construction appears to benefit strongly from "face-to-face"
collaboration.
5.4.2.5. REPEAT PROJECTS
When a project team forms and intends to work on several similar projects in the future,
there is an increase in the average number of innovations per project (see Table 5.28). The
expected payoff for successful innovation used on multiple projects is clearly greater than if the
innovation were developed and used for a single project. Project team members display a
74
Team Intent
Number of Projects
7
22
29
Repeat
-No Repeat
TOTAL
Number of Innovations
18
32
50
Average Innovation Per Project
2.6
1.5
.
Table 5.28 - Repeat Projects and Innovation
GC/CM
Number of Innovations
Number of Projects
Average Innovations
Per Project
Project Innovation
Median
A
5
4
1.3
1
B
C
D
E
F
4
10
10
4
14
4
4
4
4
6
1.0
2.5
2.5
1.0
2.3
1
2 or
2 or
0 or
1 or
G
3
3
1.0
1
3
3
I
3
Table 5.29 - Contractor Organizations and Innovation
willingness to use innovation knowing successful innovation will provide benefits over multiple
projects.
5.4.3. The Contractor Organization
Observing the average innovations per project by contractor, some contractors appear
highly proficient in being associated with innovation while other contractors are associated with
a lower level of innovation development and use (see Table 5.29). Of the three contractors with
a high number of innovations per project, two contractors are consistent in participating in
projects that generate or use multiple innovations, while a third contractor performs in a "hit or
miss" fashion with regard to participating in innovation generating projects (as evidenced by
analysis of the median for project innovation - contractors C, D, and F).
5.4.3.1. CONTRACTOR ORCHESTRATED INNOVATION
Most contractors appear to make an honest effort in orchestrating innovation for the
project team (see Table 5.30). One contractor stands out from the other contractors in terms of
taking the lead in innovation orchestration primarily by introducing innovation to the project
team. Another contractor performs significantly less then the other contractors in terms of
75
GC/CM
A
B
C
D
E
F
G
TOTAL
Number of Projects
6
3
4
4
4
4
4
29
Number of Innovations
Orchestrated by the GC/CM
Average Innovation Per Project
2
0.3
2
0.7
3
0.8
2
0.5
5
1.3
3
0.8
2
0.5
19
1
Table 5.30 - Contractor Orchestrated Innovation
Relationship
New
Stable
Strong
GC/CM Orchestrated Innovations
7
3
9
Percent
37%
16%
47 %
Table 5.31 - Owner-Contractor Relationships and Contractor Orchestrated Innovation
orchestrating innovation, but makes up for the lack of performance by being involved in some of
the more innovative projects where other team members orchestrate the innovations.
Contractors take an active role in orchestrating innovation either early in a relationship
with an owner or after the relationship has been long established but appear reluctant to take such
an active role in the innovative process when the relationship is stable (see Table 5.31). Not only
are the innovation orchestrations less abundant during this phase of the relationship, they also
tend to be less "radical" (see Table 5.26). The dip in innovation orchestration once an ownercontractor relationship is established, suggests a customary probationary period where the
contractor focuses on solid performance to establish and build trust with the client and is
therefore less willing to assume uncertainty associated with innovation. As for new
relationships, contractors appear willing to risk orchestrating an innovation in an effort to win
new clients. For example, one contractor developed a new activity tracking method to meet the
needs of a specific new client. Once trust is established and a relationship is strong, only then is
the contractor once again willing to assume the role of innovation orchestrator.
76
GC/CM
G
A
C
F
B
D
E
Procurement
Centralized
Balanced
Balanced
Balanced
Decentralized
Decentralized
Decentralized
Number of Projects
4
6
4
4
3
4
4
Number of Innovations
4
14
5
10
3
4
10
Number of Innovations Per Project
1.0
2.3
1.3
2.5
1.0
1.0
2.5
Table 5.32 - Contractor Procurement Policy and Innovation
5.4.3.2. ORGANIZATION PROCUREMENT
The contractors that pursue a balanced procurement policy seem to fare best when it
comes to increasing the number of innovations on a project (see Table 5.32). Allowing project
managers to procure the construction team allows for a professional exchange of mutual
commitment. The influence of decentralized procurement is evident by the fact that three of the
four innovations generated by the contractor with a centralized procurement program were
actually generated on an atypical project where circumstances permitted the project manager to
select the construction team. The contractor that uses a decentralized procurement process but
still generates a high number of innovations per project is due to the fact that most innovations
associated with this particular contractor are developed in-house.
5.4.3.3. ORGANIZATIONAL LEARNING
Interestingly, not one contractor in the study has a formal innovation policy (see Table
5.33). The learning mechanisms predominantly formalized and used by the various contractors
include data warehousing, mentoring, and conduct of learning-oriented discussions such as
project back-briefs, seminars, and monthly progress meetings, validating the study by Kululanga,
et al. (1999). A variety of informal learning mechanisms are used by the various contractors but
no particular mechanism seems to be preferred. All of the contractors perform at least some sort
of data warehousing as well as utilize some form of learning-oriented discussion to foster
organizational learning.
When analyzed individually, three contractors show a significant use of learning
mechanisms to capture information regarding construction innovation. Of the three contractors,
77
Learning Mechanism
Innovation Policy
Innovation Team
Knowledge Team
Benchmark Team
Best Practice Team
Research & Development
Incentives
Intranet/E-mail
Data Warehousing
Decision Support Tools
Groupware
External Knowledge Network
Internal Knowledge Network
Expertise Mapping
Mentoring
Knowledge Training
Learning-Oriented Discussions
Internal Assessments and Audits
Formal
0%
43 %
57 %
14 %
43 %
43 %
43 %
72 %
72 %
29 %
29%
57 %
14 %
29 %
71 %
0%
86 %
29 %
Informal
57 %
43 %
0%
29 %
14 %
14 %
43 %
14 %
28 %
14 %
14%
29 %
43 %
42 %
0%
57 %
14 %
29 %
None
43 %
14 %
43 %
57 %
43 %
43 %
14 %
14 %
0%
57 %
57%
14 %
43 %
29 %
29 %
43 %
0%
42 %
Table 5.33 - Contractor Learning Mechanisms
two contractors consistently work on projects with a high number of innovations. The third
contractor, while displaying solid performance, demonstrates a significantly lower amount of
innovation in association with its participation in various construction projects. The main
difference between the contractors is that the first two contractors engage in "knowledge
creating" mechanisms (i.e. innovation teams) while the third contractor focuses on "knowledge
capturing" mechanisms (i.e. data warehousing).
The remaining four contractors are less aggressive in capturing information. Of the four
contractors, one contractor stands out by being associated with a higher average number of
innovations per project than the other contractors, rivaling the two high performing contractors
who utilize significantly more learning mechanisms. A possible explanation for this contractor's
performance is the presence of a strong leader who actively takes an interest in innovation, even
acting as a gatekeeper for the rest of the organization. This contracting organization, under the
leadership of an innovation-oriented manager, actively seeks out challenging projects that are
likely to demand the use of innovation.
78
Number of Projects
29
Number of Projects with an "End-Run"
8
Percent
28 %
Table 5.34 - Owner "End Runs"
5.4.4. Owner "End-Runs"
During the interview collection process, it was discovered that the owner occasionally
champions a specific innovation from a specific specialty subcontractor and arbitrarily makes the
subcontractor part of the construction team or hires the subcontractor directly. Over one out of
four projects in the sample is subjected to an owner "end-run." A major part of the contractor's
responsibility as a general contractor or construction manager is to select and organize the
construction team. Although the owner usurping some of the contractor's control in such a
limited fashion does not threaten many contractors, there may be reason for alarm as suggested
by Chesbrough and Teece (1996). When the owner becomes integrally involved in selecting and
hiring specialty subcontractors, the contractor remains solely responsible for managing the nonspecialized portions of a construction project. Although managing non-specialized construction
still requires specialized construction skills, the role of the contractor is relegated to the provision
of a commodity service; a situation that will eventually, and ultimately, hurt the contractor's
bottom line.
79
6. CONCLUSION
6.1. SUMMARY
The purpose of this research was to identify factors that enhance multi-organizational
project team innovation. The construction industry was selected to serve as an "open laboratory"
based on its inter-organizational nature where allied firms join together for the express purpose
of completing large, complex projects. A review of existing literature provided a number of
independent variables to examine and measure for comparison and analysis to determine their
effect on innovative activity, both in terms of amount of innovation generated as well as the
nature of the innovation used on the construction projects in the data sample.
Agency theory emphasized the importance of the principal-agent relationship, contracts,
and project team organization (as dictated by project delivery method) in assigning
responsibilities, inducing agent performance, and allocating project risk. Inter-organizational and
cross-functional cooperative theory identified mechanisms that can be used to enhance
innovative activity. Team and network theory provided a framework for understanding the
nature of the inter-organizational project team emphasizing the importance of trust and necessity
to consider cultural circumstances in understanding team dynamics. The organization literature
highlighted the importance of organizational learning when conducting innovative activity and
identified mechanisms that can be used to improve the learning process. Innovation theory
provided the barometer for measuring innovation activity. Categorization of innovation types,
models, and the rate of innovation generation per project team provided the basis upon which the
other project factors could be evaluated.
Twenty-nine different construction projects from seven different construction firms were
researched through semi-structured interviews with actual project team members. Fifty
innovations were identified and associated with twenty-five of the construction projects studied.
81
6.2. CONCLUSIONS
One of the most difficult tasks in undertaking this line of research was reviewing the
literature to determine appropriate variables to use in the course of the study. Information had to
be culled from a number of academic disciplines including organization, economic, behavioral,
and innovation theory. Although powerful theories, the emerging literature on cooperation, interorganizational relationships, and networks is still developing and are a bit disjointed. Hopefully,
this research is a step in helping to alleviate the situation.
Agency theory turned out to be a powerful tool in understanding the reasoning behind the
selection of various contracts and project delivery methods. Although the principal-agent
relationship focuses primarily on the contract, the basic arguments of assigning responsibility,
inducing performance, and allocating risk can be extended to multi-organizational project team
organizational structures. For specific jobs, there are appropriate team structures to accomplish
the job efficiently and effectively. Just like creating an effective contract, it is also important to
create an effective project team organization.
Using seven different construction firms in the study provided a unique opportunity to see
how different firms utilize different strategies to create competitive advantages by seeking out (or
not seeking out) innovation. The approaches taken by each contractor in dealing with innovation
was interesting to observe in terms of contrast and comparison. Clear differences could be
observed between the various contractors in their approach to developing, implementing, and
using innovation to their advantage. Although it has been noted that innovation tends to suffer
when the process in formalized, the failure of any contractor to have a specific innovation policy
was disturbing. At the very least, a basic vision statement pertaining to innovation could serve
the organization well in focusing the energies of the company on increasing its competitive
advantage through innovation.
6.3. FINDINGS
The general nature of the inter-organizational project teams in this sample, in terms of
contract design and organization selection, adheres to the basic principles of agency theory.
Properly allocating risk on a project appears to be the most dominant factor driving project
82
contract forms. Decisions concerning delegation of responsibility appear to drive the selection of
the delivery method for the project.
At first glance, the use of outcome-based contracts for sub-agents appears to be
contradictory to agency theory, but a closer analysis shows differently. Due to an agent's inherent
avoidance of risk, it is implied that the agents should not be participating in innovation, but even
under outcome-based contracts, the agents do participate in innovation. Evaluation of the nature
of the innovations within the context of the project case studies reinforces the importance of
recognizing risk from the appropriate viewpoint and designing contract and organization forms
based on responsibilities, capabilities, and proper risk allocation. The contract form does not
inhibit innovative activity per se, but rather tends to moderate its extent (degree of "radicalness").
It is interesting to note that with all the emphasis on cost savings and decreasing project
life cycles, the majority of the innovations related to specifically improving building
performance. Possible reasons for this finding could be the maturity of the construction business
in terms of already maximizing cost-cutting and schedule-reducing innovations to the state-ofthe-art or it could be reflective of an unwillingness to induce uncertainty through the use of
innovation unless strongly encouraged from the owner. The data collected for this research is not
detailed enough to provide a thorough explanation.
The value of the general contractor and the construction manager is clearly demonstrated
in the analysis of planned versus "in-progress" innovation. While all team members contribute to
the innovation process before construction begins, it is the contractor who takes the lead in
directing innovation activity once construction is underway.
The absolute stunning effect of a tripled increase in innovation associated with the use of
super-ordinate goals attests to the power of a well-focused project team. This finding reinforces
the findings of Pinto, et al. (1993) who found that super-ordinate goals lead to enhanced
cooperation.
Reiterating the author's recommendation. "Project managers would be well advised
to make use of existing organizational goals or to develop specific, project related goals as a
rallying point under which members of diverse disciplines.. .can share common purposes and
achieve cooperation."
83
A surprising result was the indifference of the rate of innovation generation whether the
contractor joined the project team early or late in the design-construction process. As suggested
by the evidence, the main advantage to having the contractor join the project team early in the
design process, specifically with regard to innovation development and use, is the ability develop
and use innovations that are more pervasive in nature, that is, the innovations tend to cut across
discipline boundaries and require a more comprehensive understanding of the impacts and
requirements to successfully develop and implement the innovation.
The advantages of long-term relationships and repeat projects in the construction industry
are fairly easy to understand and they are reinforced by the results generated form the project
sample. Both long-term relationships between the owner and the contractor as well as projects
where the team plans to work together over several similar projects provides opportunities to
pursue innovation. The interesting part of relationships is that relationships show a pattern with
regard to innovative activity similar to that of young lovers. In the beginning there is a courtship
phase where the contractor is willing to participate in more innovative activity to win "the love"
of the owner. After the relationship is established, the contractor retracts and focuses on ensuring
solid performance to keep the owner interested. Once the hard work of establishing trust is
complete, the contractor and the owner can progress into their "golden years" where they can
pursue more dramatic and more numerous innovations.
A final word on the contracting companies who participated in the study. Examining the
organizations in terms of their procurement operations and their use of mechanisms to capture,
create, and disseminate information, specifically knowledge about innovation, clearly reflected
the overall strategies of the various contracting organizations. With regard to innovation, some
contractors are very conscientious of the power of innovation while others simply admit that
innovation is a "good thing." Some contractors actively seek out new products, processes, and
even develop their own innovations while other contractors choose to let innovation take its own
course. Neither strategy is right nor wrong, and either way, when innovation is used, the entire
construction industry benefits. But those who benefit the most are those who are doing the actual
innovating. It is the innovators who are gaining the experience.. .and experience is what the
construction industry is all about.
84
6.4. RECOMMENDATIONS FOR FURTHER STUDY
This research was challenging, but interesting, due to the wide range of theory that can be
utilized to study the dynamics of multi-organizational project teams. There are so many different
ways to analyze the project team and there are so many areas that must still be investigated
before the nature of the multi-organization project team is truly understood.
First and foremost, the general contractor or the construction manager is only one of
many members of the project team. A similar study, comparable to this one, from the
perspective of a different project team member is likely to turn up rich new information that can
provide insight into multi-organizational project team innovation. Based on this study, owners
would make an interesting candidate for study in that they seem to be uniquely poised to
capitalize on opportunistic innovation. A study of designers would likely provide a clearer
picture of the early conceptualization and design processes including the process of creating and
rejecting innovative ideas. A study of subcontractors would likely identify different types of
innovations (i.e. development of new trade tools or incorporation of ISO standards) and
influential factors missed by the larger "macro" studies of the construction team.
Further investigation into the use of cooperation mechanisms is also recommended. This
study clearly shows that super-ordinate goals are a powerful tool in generating innovation.
Unfortunately, there is no clear framework on how super-ordinate goals work, why they work, or
when they should even be employed. Co-location also hints at being a useful tool in generating
innovation but the occurrences in this study are rare; a more thorough investigation may provide
some interesting findings.
85
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89
APPENDIX A
Project Case Studies
Appendix A
Beacon Skanska USA
Boys and Girls Club - South Boston
The Boys and Girls Club of South Boston, Massachusetts required an extensive
renovation to upgrade its facilities. The renovation included dismantling and replacing existing
floors, upgrading outdated electrical and mechanical systems, and constructing a swimming pool
in the bottom basement floor. Beacon Skanska secured the job as the lead agent in a joint
venture design-build team.
The Boys and Girls Club facilities are located in the lower floors of two downtown multistory office buildings. The site was extremely restricted considering the amount and type of
construction that had to be completed. Building the indoor pool required punching a hole in an
exterior wall of the existing building, reinforcing the stone masonry with a temporary beam
frame, underpinning the building's foundation and excavating the unwanted earth using a
miniature front loader.
Multiple Stories
Rebuilt Floor
Pool
Grade
75 feet x 30 feet
O
Original Floor
125 feet x 75
Foundation
Pool
Elevation View
Plan View
The owner requested that the construction-design team use FirstLine T, a computer based
management tool similar to LotusNotesTm developed specifically for the construction industry
(innovation #1). FirstLine is provided by Collaborative Systems, Inc. who provides the
software and technical support to construction teams using the FirstLineTM product. FirstLine T
was expected to benefit the construction team and owner by improving communication among
the project team members. The innovation proved useful when unexpected conditions occurred
on the project site and project team members were able to respond quickly to the situation .
93
Appendix A
Beacon Skanska USA
Boys and Girls Club - South Boston
Project Team Organization
1 - new
3 - strong
2 - stable
The number of lines that attach one team member to another
represents the strength of the relationship between the two team
members: 1 - new, 2 - stable, 3 - strong.
94
Appendix A
Beacon Skanska USA
Boys and Girls Club - South Boston
Timeline
Conceptual
Design
Beacon Skanska USA and Leers Weinzapfel
Associates (architect) awarded design-build contract.
CM agrees to use FirstLineTM.
4
Detailed
Design
Pre-Construction
Collaborative Structures, Inc. provides FirstLineTM
technical support.
Construction
FirstLineTM used by project team.
95
Appendix A
Beacon Skanska USA
Commonwealth of Massachusetts Trial Court - Brockton
A new state courthouse was constructed in the center of downtown Brockton,
Massachusetts. The courthouse functions as three separate buildings under one roof. One
section of the building houses court administrative operations and judicial offices. Another
section of the building serves as a high level security detainment center for criminal detention
during court proceedings. The remaining section of the building houses several municipal
administrative offices and is open to the public. All three different "sections" connect to each
other by means of the facilities' central courtrooms.
In an effort to speed the design and construction of the state courthouse, the
Commonwealth of Massachusetts decided to deliver the construction project using a design-build
delivery system. To limit liability and risk, the state locked Beacon Skanska into a lump sum
contract early in the design process. In order to mitigate the risk of the tight contractual price
constraints, the contractor brought the primary sub-contractors (e.g. HVAC and MEP) on board
early in the design process and then sub-contracted the various designers and engineers to work
for the sub-contractors (innovation #1). In essence, the construction manager employed "designbuild sub-contractors."
97
Appendix A
Beacon Skanska USA
Commonwealth of Massachusetts Trial Court - Brockton
Project Team Organization
Commonwealth
of Massachusetts
98
Appendix A
Beacon Skanska USA
Commonwealth of Massachusetts Trial Court - Brockton
Timeline
Conceptual
Design
Beacon Skanska USA and BKA (architect) awarded
design-build contract.
Detailed
Design
Primary sub-contractors join the design team.
- Designers are subcontracted to the prime subcontractors to enforce cost control.
Pre- Construction
Construction
99
Appendix A
Beacon Skanska USA
GelTex Laboratories
An old bakery in Waltham, Massachusetts was renovated into a new laboratory facility to
accommodate expansion of the GelTex company. The renovated two-story facility contains
laboratory space and administrative offices.
The GelTex laboratory is fitted-out with an extensive direct digital control (DDC) system
used to monitor and control all building operations - from lawn water sprinklers to overhead
laboratory fume hoods (innovation #1). The DDC system allows the GelTex facility manager to
maintain the facility with fewer personnel as well as receive a major rebate from the local
electrical company.
The GelTex facility manager was an integral part of the selection, design, and renovation
of the new facility. The majority of the renovation was performed by Beacon Skanska but the
owner decided to sub-contract the DDC system directly to American Energy Management
(AEM), a specialty contractor. The facility manger had worked with the AEM before on similar
projects and felt comfortable in directly contracting the specialty sub-contractor.
101
Appendix A
Beacon Skanska USA
GelTex Laboratory
Project Organization Chart
102
Appendix A
Beacon Skanska USA
GelTex Laboratory
Timeline
Conceptual
Design
Detailed
Design
Clifford Hoffman (architect) hired.
Pre-Construction
AEM directly sub-contracted by GELTEX.
Beacon Skanska USA awarded contract.
Construction
103
Appendix A
Beacon Skanska USA
Harvard Business School Executive Housing
The Harvard Business School needed a new facility to house attendees of a new ninety
day education program for working business executives. The new facility is located on the
Harvard Business School campus.
The program directors at Harvard desired a facility that would enhance the learning
experience of the students. In conjunction with CBT, the architect, a Boston based architectural
firm, the owner and designer conceived a "smart lounge" design (innovation #1). The unique
design minimizes personal areas, such as sleeping quarters, and emphasizes communal areas (the
smart lounge) where students work together. A typical arrangement is eight small bedrooms with
personal bath facilities located on the perimeter of a large conference-like workroom. In addition
to the lounge design, the facility is fully computer integrated. All daily functions, from ordering
lunch to requesting dry-cleaning for clothes, must be executed through the facility's integrated
computer system.
The Harvard Business School explicitly desired a practical, functional, high quality
building. In concert with the CBT and Beacon Skanska, the owner approved an extensive use of
mock-up construction to ensure the facility would meet expectations (innovation #2). Fully
functional replicas of everything from reception desks to full room arrangements were built offsite and tested by the actual people for whom the facilities were intended. Even clients were
asked to test and comment on fully functional room mock-ups.
The new Harvard facility was constructed adjacent with one side of the building facing a
major city traffic way. Noise abatement was considered critical to the success of the facility.
The architects created a design that used two windows, one behind the other to reduce street
noise. Upon inspection of the window mock-up, facility maintenance personnel expressed
concern over the conflict between clientele privacy and the need to access rooms in order to
maintain the interior windows. The construction manager resolved the problem by finding a
window manufacturer, the EFCO Corporation, that provided an energy efficient double-paned
window known as Heat Mirror T, generally used for energy specific reasons, that fulfilled the
sound transmission specifications needed for the new building (innovation #3).
An old utility tunnel that supplies power to a large portion of the surrounding
neighborhood was located directly beneath the project site and had to be passed over to get to the
construction site. The tunnel was not strong enough to support construction equipment so the
contractor required the subcontractor with the heaviest equipment, the Charles Anthony
Company (the pile driving subcontractor), to build a temporary bridge at ground level that would
allow construction equipment to pass over the tunnel during the duration of the project
(innovation #3).
105
Appendix A
Beacon Skanska USA
Harvard Business School - Executive Housing
Project Team Organization
106
Appendix A
Beacon Skanska USA
Harvard Business School - Executive Housing
Timeline
Conceptual
Design
Detailed
Design
CBT( architect) hired.
CBT creates "Smart Lounge" design.
Beacon Skanska USA awarded contract.
Mock-ups constructed and evaluated.
Pre-Construction
Beacon Sknaska USA identifies utility tunnel as a
project complexity.
Construction
Charles Anthony Company hired.
Heat Mirror windows from EFCO Corporation
selected to abate street noise.
107
Appendix A
Beacon Skanska USA
Hilton Hotel - Logan International Airport
As part of the on-going upgrade of Boston's Logan International Airport, the Hilton Hotel
Corporation was permitted to construct a new hotel as the airport's centerpiece. The new multistory hotel is located on a site between the new central parking garage and the recently
constructed central chilling plant. The hotel is also closely surrounded by the airport's
"spaghetti-like" inter-terminal roadways and city highways.
This project was overseen by the Massachusetts Port Authority (MASSPORT) which
oversees all construction at Logan International Airport. Tishman Construction acted as
MASSPORT's representative on the site. The Hilton Hotel Corporation initially selected a
different construction manager to assist in pre-construction activities and follow-on work but a
personnel change in corporate management led to a change in corporate strategy and the job was
placed out for open bid.
The building design required piles of up to one-hundred and ten feet in length due to the
unstable ground conditions at the airport. Access is only available through underground highway
tunnels from the west or through a dense residential area from the north. In order to use the
highway tunnels, the piles had to be reduced in size, transported to the project, and assembled onsite. The general contractor relied on the pile manufacturer to develop a design to allow the piles
to be spliced and assembled on-site (innovation #1).
Cambridge 7 Associates, the architect, made the decision to conceal the building's
window frames primarily for visual reasons. The designer desired to break-up the "lines" caused
by the numerous windows in the building's facade. When reviewed by the acoustic engineer, it
was determined that hiding the window frames also reduced the sound transmitting
characteristics of the entire window (innovation #2). The reduced sound transmission
characteristics were very beneficial to the hotel which was located in the center of a busy airport.
"Serendipity" is credited as the "driver" behind this particular innovation.
Hilton Hotel owners specified that the hotel be equipped with "smart room technology"
from CenterCom (innovation #3). The integrated system uses an infrared thermostat and other
sensors to relay information on a room's status. The integrated system controls overhead costs
by monitoring air conditioning, heating, and lighting based on room occupancy. The system also
fosters improved hotel service by providing discrete information to hotel personnel; customers no
longer need be disturbed by unwelcome knocking at the door by intrusive maid or other room
services. Hilton had worked with CenterCom previously on other similar projects.
109
Appendix A
Beacon Skanska USA
Hilton Hotel - Logan International Airport
Project Organization Chart
110
Appendix A
Beacon Skanska USA
Hilton Hotel - Logan International Airport
Timeline
Conceptual
Design
Cambridge 7 Associates (architect) hired.
Detailed
Design
Acoustic engineer determines concealed window
frame abates noise.
Tishman performs as an agent for MASSPORT.
Pre-Construction
Beacon Skanska USA awarded GC contract.
.t
Construction
Beacon Skanska USA directs subcontractor to splice
pi.
piles.
Window frames are embedded in the facilitie's
enclosure system.
Hilton Hotel decides to incorporate "smart room
technology" from CenterCom.
I1
Appendix A
Beacon Skanska USA
SFX Pavilion
The SFX Pavilion located in Boston, Massavhusetts' South Shore district is a unique
open-air venue primarily used for local music events and concerts. The venue's primary sellingpoint is that it is a "column-less" venue without any "obstructed seating." The "column-less"
venue was the brainchild of the Don Law Company, a local Boston developer, who eventually
sold the project to SFX Entertainment, a national entertainment company.
Beacon Skanska had participated with the Don Law company in a previous effort to
develop a viewing venue in Boston's South Shore district. It was known from the outset of this
project that the venue was to be unique in character and quality.
A number of innovations work together as a system to create the "column-less" venue
(innovation #1). The entire facility is supported by a single arch that flies over the top of the
facility (innovation #2). The truss arch supports a significant portion of the fabric roof load. The
venue stage is used to anchor a portion of the fabric roof. To properly anchor the roof, the venue
stage was designed similar to the abutments designed for suspension bridges (innovation #3).
The process of erecting such a unique facility was a challenge for the steel erector. The task of
erecting the facility also included the responsibility for designing and constructing the fabric
roof. The subcontractor who won the design-build package decided to turn the ends of the main
truss arch into ball-and-socket hinges and use a socket-hinges to lift the truss and fabric roof into
place (innovation #4). Although the socket hinge design was incorporated into the project, it was
not actually used during the erection process.
The main truss arch is erected. The stage (right foreground) serves as an abutment to anchor
the fabric roof which will be suspended from the main arch.
113
Appendix A
Beacon Skanska USA
SFX Pavilion
Project Team Organization
114
Appendix A
Beacon Skanska USA
SFX Pavilion
Timeline
Conceptual
Design
A Form Architecture (architect) hired.
Detailed
Design
Pre-Construction
Beacon Skanska USA awarded contract.
Design-build steel erection package awarded to subcontractor.
Construction
Steel erector successfully erects the facility but not as
originally planned.
115
Appendix A
Bovis, Incorporated
10 St. James Place
10 St. James Place is a multi-story, multi-use downtown office building in Boston,
Massachuasetts. The construction site is located in a highly congested area. The site was
wedged between two existing buildings with busy city streets on the remaining sides. Minimal
disturbance of the adjacent buildings was a key concern due to the fact that one of the adjacent
buildings housed a library registered as a Boston historic landmark.
The project was initiated by Macomber Development, a local developer, who eventually
allied with a larger partner, Millennium Partners, Inc., in order to secure financing for the project.
Bovis had not worked with the local developer before but maintains a long-term relationship with
Millennium Partners, Inc.
Getting the building completed quickly at the lowest possible cost was a major concern of
the ownership team. Bovis suggested the use of "up-up" construction to meet the needs of the
owner (innovation #1). "Up-up" construction differs from traditional sequential construction by
building up from the bottom basement floor and the ground floor simultaneously rather than
building up strictly from the bottom basement floor. This process shortens the project duration
considerably but attention must be paid to the structural integrity of the facility during
construction. A large amount of cross-bracing is generally needed to support the multi-floor
basement columns as the ground floor is put in place over the basement level.
117
Appendix A
Bovis, Incorporated
10 St. James Place
Project Team Organization
118
Appendix A
Bovis, Incorporated
10 St. James Place
Timeline
Conceptual
Design
Detailed
Design
~
-
Architect is hired.
Bovis awarded contract.
Millenium Partners backs Macomber Development
Associates.
Project team commits to "up-up" construction.
Pre-Construction
Construction
Project team performs "up-up" construction.
119
Appendix A
Bovis, Incorporated
The Basketball Hall of Fame
The Basketball Hall of Fame is being constructed in Springfield, Massachusetts, the
birthplace of basketball. The project is being pursued by a joint venture between the National
Basketball Association (NBA) and the National College Association of Athletics (NCAA). Both
the City of Springfield, Massachusetts, and the Commonwealth of Massachusetts are committing
funds to the development of the project. Bovis was hired as an owner's representative by the
City of Springfield to monitor the design and construction process on the city's behalf. The city
of Springfield, very concerned about budget overspending on the project, instructed the
construction manager that the project must "come in under budget."
The Basketball Hall of Fame is designed to be a landmark building. One of its prominent
features is the large spherical shape of the building, the shape of a basketball, which is over three
stories high. The construction team as a whole was concerned about designing and erecting such
a non-typical structure especially with a very constrained budget. Bovis worked closely with
Weidlinger Associates, the structural engineer, and a reputable steel erector to ensure that the
design was feasible and affordable. The design consists of multiple curved arch beams joining at
the top of the sphere shaped building. A scaffold tower will hold the beams in place until the
critical cross-tie bracing is put in place to support the lateral forces that will be exerted on the
spherical structure (innovation #1).
121
Appendix A
Bovis, Incorporated
Basketball Hall of Fame
Project Organization Chart
Commonwealth
of Massachusetts
City of
Springfield,
Massachusetts
Bovis, Inc.
CM(O)
.........
Hall of Fame of
Properties. Inc.
*
I
Gwathny Saegal
Weidlinger
Associates
GC/CM
I*
::::::::::::::::::::::::::::::::::...
Desig ners
Steel E rector
Sub-Contractors
L--..- - --
*
-----
-
At the time of this study, the construction documents were being put out to bid
and the construction team had not yet been selected.
122
Appendix A
Bovis, Incorporated
Basketball Hall of Fame
Timeline
Conceptual
Design
Gwathney Saegal (architect) hired.
Weidlinger Associates selected as the structural
engineer.
Detailed
Design
Bovis hired by the City of Springfield, MA, to serve as
an owner's representative.
Project team collaborates on facililty's structural
design.
Steel erector provides consultation services, reviews
structural design.
Pre-Construction
Construction
123
Appendix A
Bovis, Incorporated
Millennium Place - Boston
Millennium Place is a two building, multi-story, multi-use complex in Boston. The
construction site is located in the center of downtown Boston in a very dense area. The site is
located among several existing buildings, borders downtown streets and even contends with an
underground subway. The project is owned by Millennium Partners. Inc., a large development
company.
Given the site constraints and the desire to keep the construction schedule as short as
possible, the contractor suggested using the "up-down" method of construction. In "up-down"
construction, the builder drives the piles and basement columns into the ground, places the
ground floor at grade and proceeds to build "upward" above grade while excavating "downward,"
constructing the basement floors along the way.
While investigating the conditions on the site, Haley & Aldrich, the geotechnical
engineer, discovered a large amount of debris from previous buildings located on the site. Even
some bridge piers and dock pilings were discovered from the time when Boston's waterfront
used to be near the area. To avoid the issue of having to remove the debris through a built
ground floor, the contractor devised a scheme to initially excavate one floor down to remove the
majority of the debris and then begin "up-down" construction in earnest, labeling the process as
"modified up-down" construction (innovation #1).
125
Appendix A
Bovis, Incorporated
Millennium Place - Boston
Project Organization Chart
S&F Concrete
126
Trevi Icos
Appendix A
Bovis, Incorporated
Millennium Place - Boston
Timeline
Conceptual
Design
Gary Handel Associates (architect) hired.
Bovis, Inc. awarded contract.
Haley & Aldrich identify poor ground conditions.
Detailed
Design
Bovis, Inc. proposes "modified up-down"
construction.
MARR Erectors provide consultation services, reviews
structural design.
Pre-Construction
Construction
Project team executes "modified up-down"
construction.
127
Appendix A
Gilbane
Brookline High School
The Town of Brookline, Massachusetts, desired to renovate its deteriorating high school.
Even though the project was public in nature and regulated by public procurement laws, the
Town of Brookline Board of Selectman decided to hire Gilbane as a construction manager under
a "design services" contract to assist in the development, design, and management of the project.
The project consisted of new construction and a renovation of the existing buildings' electrical
and mechanical systems.
The project was difficult in terms of mitigating impacts on the local neighborhood.
Construction occurred while school was in session requiring the entire ninth grade class to
relocate to another facility for schooling. Access to the neighborhood is very restricted and
required consultation from a traffic engineer resulting in temporary closures of some streets and
temporary designation of "one-way" streets throughout the neighborhood. Parking for
construction workers also burdened the local neighborhood with additional traffic and
overwhelmed the limited parking space available. Despite the troublesome nature of the social
impacts on this project, no innovations were identified in researching this project.
129
Appendix A
Gilbane
Brookline High School
Project Organization Chart
130
Appendix A
Gilbane
Brookline High School
Timeline
Conceptual
Design
Finegold, Alexander & Associates (architect) hired.
Gilbane hired to provide design services and oversee
construction.
Detailed
Design
Pre- Construction
Construction
131
--
z7-
--
--
Appendix A
Gilbane
Cambridge Hospital
The Cambridge Hospital, located in Cambridge, Massachusetts, required construction of
a new wing. The construction site was located in a dense residential neighborhood which
mandated specific project constraints mitigating noise and dust pollution, including sound
barriers and limited work hours. Gilbane had served as a program manager for the hospital,
providing expertise for facility management and expansion for several years. Despite being a
program manager, Gilbane still competed with other construction firms to win the job as
contractor for construction of the new hospital wing.
In an effort to shorten the duration of the construction project, Gilbane elected to use an
"up-up" construction sequence (innovation #1) after it was suggested by the firm of Haley &
Aldrich. Although the "up-up" construction method has a particular popularity in the Boston
area, Gilbane, headquartered in Providence, Rhode Island, was less familiar than other local
builders with the particular construction process. Although the design of the facility had to be reevaluated for "up-up" construction by the structural engineer, there was no need for redesign of
the facility to support the "up-up" construction sequence and the project proceeded on schedule.
I __I
"Up-up" construction. Concrete, via the pump truck (the concrete pump truck arm extension
is coming in from the right), is being pumped "below" while the superstructure rises "above."
133
RMM
Appendix A
Gilbane
Cambridge Hospital
Project Organization Chart
134
Appendix A
Gilbane
Cambridge Hospital
Timeline
Conceptual
Design
Gilbane serves as program manager to the Cambridge
Hospital.
Detailed
Design
Payette Associates (architect) hired.
Pre-Construction
Gilbane awarded contract.
Haley & Aldrich suggest using an "up-up"
construction sequence to shorten the project duration.
Project team commits to "up-up" construction to
shorten project duration.
Construction
Project team performs "up-up" construction.
135
Appendix A
Gilbane
The Learning Corridor
The Learning Corridor (TLC) is a community rebuilding program for a section of
downtown Hartford, Connecticut. The project was undertaken by a conglomerate consisting of a
local university, a local medical hospital, and the local community (SINA). Gilbane was asked
personally by the head of the local university to serve as a program manager to help devise a
solution for the urban revitalization. Once the project began to take shape, Gilbane competed for
the primary contracting position and won. A worn down community was replaced by a complex
consisting of four buildings that serve as the city's new education center, supporting kindergarten
through twelfth-grade.
The social impacts of the project were tremendous and affected the lives of many families
that lived in the area. The construction project team was very attentive to the impacts of the
construction project on the lives of the disaffected and took the necessary precautions to ensure
success. The project team proceeded diligently and carefully to ensure that displaced families
had a place to move and were equitably reimbursed for their inconvenience.
TLC design is a new way of thinking about community education and its facilities
(innovation #1). TLC was developed to capitalize on the synergy created by the close location of
the various schools. The schools share one building that houses the athletic equipment as well as
the computer education center. The complex even has an auditorium that doubles as a
community theater. The buildings' mechanical and electrical systems are fully automated and
integrated. The entire facility was designed so that the buildings share as much in common as
possible, from class room chairs to light bulbs, to economize the operation and maintenance of
the complex.
The facilities were designed by the Hartford Team, an association of seven local
architects. In order to ensure a consistency of effort and design, Gilbane directed the erection of
a temporary on-site facility to house the design and construction operations (innovation #2). Use
of the trailer complex kept the overall project manageable by co-locating the numerous parties
that were involved in the project.
Gilbane, reputed for its activity in social service, created a program by which local
community citizens who were out of work could participate in a job training program and then
work on the construction project itself (innovation #3). The training program was set up in
conjunction with a local public job training office and the sub-contractors that performed work
on the construction site.
137
Appendix A
Gilbane
The Learning Corridor
Project Organization Chart
138
Appendix A
Gilbane
The Learning Corridor
Timeline
Conceptual
Design
Gilbane serves as a program manger for individuals
who later founded SINA.
The Learning Corridor plan is created.
The Hartford Team (architect) hired.
Detailed
Design
Gilbane awarded contract.
Trailer complex constructed on-site to house design
and construction operations.
Pre-Construction
Gilbane initiates community training program.
Construction
139
Appendix A
Gilbane
Bell Atlantic Pearle River Data Center
The Bell Atlantic Pearle River Data Center is a new communications center for the Bell
Atlantic company. The facility was designed to carry a significant portion of the phone
company's business to include priority emergency lines and some of the company's VIP
clientele.
Gilbane is a program manger for the Bell Atlantic company. Although not hired directly
as a contractor for the project, Gilbane acted as the owner's representative in overseeing the
facility renovation. The renovation consisted of reconfiguring an existing five-story office center
to house the new data center.
Bell Atlantic required a dependable electrical system for its new "high priority" data
center. Tie Point engineers responded by designing an N+2 electrical system that provides a
99.9% reliability in performance (innovation #1). The system relies on redundant power feeds
from multiple sources to maintain its resiliency.
141
Appendix A
Gilbane
Bell Atlantic Pearle River Data Center
Project Organization Chart
Designers
Tie Point
Engineering
142
Appendix A
Gilbane
Bell Atlantic Pearle River Data Center
Timeline
Conceptual
Design
Gilbane serves as the program manager for Bell
Atlantic.
~Tiepoint Engineering design N+2 electrical design.
Detailed
Design
Pre-Construction
.nt
o
~Gilbane oversees the installation of the N+2 electrical
system as an owner's representative.
143
Appendix A
Kennedy & Rossi, Incorporated
Genzyme Tissue Repair
The Genzyme facility is located in Cambridge, Massachusetts. The project consisted of
constructing an addition to a fully operational laboratory facility without disrupting ongoing
operations. Laboratory operations consist of growing tissues for burn victims at local hospitals to
assist a burn victim's recovery. In order to work on-site, construction personnel were required to
decontaminate and sterilize themselves and their tools before entering the laboratory and
construction area. The decontamination process required a tremendous amount of patience and
attention to detail.
Air Flow Associates was hired to be part of the project team to evaluate and modify the
air balance of the entire facility during construction operations. Normally the air balancing team
performs its work after the entire construction project is complete, but in this case, air balancing
occurred every day after construction operations had ceased for the day (innovation #1). Using
the air balancing team during the course of the project allowed the laboratory to remain
operational and continue its life saving work.
145
Appendix A
Kennedy & Rossi, Incorporated
Genzyme Tissue Repair
Project Organization Chart
146
Appendix A
Kennedy & Rossi, Incorporated
Genzyme Tissue Repair
Timeline
Conceptual
Design
Detailed
Design
Kennedy & Rossi, Inc. awarded contract.
Pre-Construction
Air Flow Associates hired to maintain air balance
during construction.
Construction
Air Flow Associates perform air balancing during
.
construction.
147
Appendix A
Kennedy & Rossi, Incorporated
Massachusetts Institute of Technology - Building 11
The renovation of building 11 at MIT in Cambridge. Massachusetts, consisted of
renovating the three original floors of the building and adding an additional two floors to the top
of the structure. The building is located in the center of the MIT campus and is connected
contiguously to several other academic buildings.
For the top two new floors, the architect decided to use structural tube steel as the frame
for the new addition (innovation #1). Although the tube steel is more costly than standard
construction steel (i.e. "I"-beams), it provides major benefits in terms of economy of space and
appearance. Tube steel is generally smaller than its standard "I"-beam counterpart that carries the
same load. As a result, walls can be spaced out further to create more room and the walls no
longer need to fold in-and-out to account for the larger structural columns. The project manager
on-site referred to the creation of a long, smooth wall as a "money wall" the requires less
resources to put in place, saving time, money, and materials.
149
Appendix A
Kennedy & Rossi, Incorporated
Massachusetts Institue of Technology - Building 11
Project Organization Chart
150
Appendix A
Kennedy & Rossi, Incorporated
Massachusetts Institue of Technology - Building 11
Timeline
Conceptual
Design
Detailed
Design
Pre-Construction
Kennedy & Rossi, Inc. awarded contract.
.t
Construction
Project team uses tube steel for the structural frame as
specified by the architect.
151
Appendix A
Kennedy & Rossi, Incorporated
Perceptive Biosystems
Located in Framingham, Massachusetts, the project entailed renovating a former
computer software facility into a company headquarters and laboratory facility for Perceptive
Biosystems, manufacturers of medical equipment. The overall project included the renovation of
three separate buildings, two to be occupied by Perceptive Biosystems and the third to be put up
for lease. No innovations were identified in researching this project.
153
Appendix A
Kennedy & Rossi, Incorporated
Perceptive Biosystems
Project Organization Chart
154
Appendix A
Kennedy & Rossi, Incorporated
Perceptive Biosystems
Timeline
Conceptual
Design
Detailed
Design
Pre-Construction
Clifford Hoffman Associates (architect) hired.
Kennedy & Rossi, Inc. awarded contract.
Construction
155
Appendix A
Kennedy & Rossi, Incorporated
Tufts Medical Health Plan
The Tufts Medical Health Plan project entailed the renovation of an old
telecommunications building into a high-end office for the Tufts Medical Health Plan
organization. Located in Boston, Massachusetts, the project included the installation of an
intermediate floor in the warehouse portion of the building, construction of an operational
computer cleanroom, and the erection of a 1,400 parking space garage.
The property was developed by Prospectus, Inc., a long-term client of Kennedy and
Rossi. The contractor did all of the preconstruction work for the property as various tenants
considered occupying the building. The Tufts Medical Health Plan organization agreed to
occupy the building if construction could be completed within six months.
To meet the stringent timeline, the contractor directed the subcontractors to create a
temporary clean room so that the computer facility team could get to work as soon as possible
(innovation #1). The project manager directed the mechanical and electrical contractors as
required to support the cleanroom operations. Portable air pumps with HEPA filters were used to
keep the room overpressured and "clean" while construction proceeded.
The project team also needed a quick and cost effective means of constructing 1,400
space the parking garage. The owner recommended using Zaldastoni, a consulting engineer firm,
that specializes in the design of hybrid parking garages (garages that use both steel and prefabricated concrete structural elements). Zaldastoni was invited to the project team resulting in
the erection of a hybrid-parking garage in less than 38 construction days (innovations #2).
157
Appendix A
Kennedy & Rossi, Incorporated
Tufts Medical Health Plan
Project Organization Chart
158
Appendix A
Kennedy & Rossi, Incorporated
Tufts Medical Health Plan
Timeline
Conceptual
Design
Kennedy & Rossi, Inc. works with Prospectus. Inc. to
develop property.
CID (architect) hired to design tentative plans for
property.
Sasaki (architect) hired to design interior fit-out.
Detailed
Design
Zaldastoni joins team to design hybrid parking garage.
Pre-Construction
Construction
Kennedy & Rossi, Inc. establishes a temporary
cleanroom while construction is in progress.
Hybrid parking garage is constructed.
159
Appendix A
GBH Macomber Construction Company
Boston College - Higgins Hall
Higgins Hall, located on the Boston College campus in Boston, Massachusetts, houses
the offices and classrooms for the physics and biology departments. The basic plan for the
Higgins Hall project called for the demolition of a portion of the existing building and the
construction of an addition that would approximately double the original size of the facility.
To track the construction progress, Macomber Construction utilized-three dimensional
information charts (innovation #1). The charts provide realistic, three-dimensional views of the
construction project and is an effective tool that simplifies coordination and scheduling among
the various project team members. Macomber Construction developed the three-dimensional
tracking charts in-house for use on multiple projects.
161
Appendix A
GBH Macomber Construction Company
Boston College - Higgins Hall
Project Organization Chart
162
Appendix A
GBH Macomber Construction Company
Boston College - Higgins Hall
Timeline
Conceptual
Design
Detailed
Design
~Shepley, Bullfinch, Richardson & Abbott (architect)
hired.
~ Macomber Construction awarded contract.
Pre-Construction
Construction
-
Project team utilizes 3-D tracking charts.
163
Appendix A
GBH Macomber Construction Company
Dartmouth Science Complex
The Dartmouth Science Complex in Hanover, New Hampshire, consists of four separate
buildings on the Dartmouth campus. Each of the four buildings underwent a full renovation. A
small addition was made to the physics building and a floor was added to the chemistry building.
The new addition to the physics building required shielding from external magnetic and
electrical emissions. As construction started, it was recognized the facility's utility lines would
also have to be shielded to prevent unwanted emissions from disturbing any laboratory work.
The designers quickly derived the necessary specifications required to insulate the facility's
utility lines. After a substantial search, the contractor was unable to find any manufactured utility
conduits that matched the designer's specifications. The project manager pooled together the
various subcontractors on the job and had the utility conduits manufactured and assembled onsite (innovation #1).
Building a new floor on top of an existing building posed a challenge to the project team
in how to cost effectively build an additional floor without exposing the existing floors to
potential weather damage. Truss and scaffolding systems as well as temporary roofing were
considered as possible solutions to the problem but were too expensive. Ultimately, the
contractor hit upon a novel idea of turning the existing top floor into a temporary roof,
weatherproofed with a complete drainage system (innovation #2).
At the insistence of the owner, Macomber Construction utilized FirstLine TM, an
information technology based project management tool used to track construction activity
(innovation #3). This particular application of FirstLineTM was one of the first applications of
TM
the software as a web-based product. The biggest advantage provided by FirstLine , according
to the project team members, is the ability to track, record, and save all project information and
communications on two computer disks as a final record of all project transactions.
165
Appendix A
GBH Macomber Construction Company
Dartmouth Science Complex
Project Organization Chart
166
Appendix A
GBH Macomber Construction Company
Dartmouth Science Complex
Timeline
Conceptual
Design
Detailed
Design
Center Brook Architects (architect) hired.
Macomber Construction awarded contract.
Project team commits to using FirstLineTM.
Pre-Construction
Construction
Project team uses FirstLineTM.
Owner specifies need for emission free utility lines.
Macomber Construction orchestrates on-site fabrication
of conduits.
Macomer Construction creates temporary roof and
drainage.
167
Appendix A
GBH Macomber Construction Company
EMC - Franklin
Modified Murox
panels as used on
the EMC facility in
Franklin,
Massachusetts.
168
Appendix A
GBH Macomber Construction Company
EMC - Franklin
The EMC facility, located in Franklin, Massachusetts, is a five-story office and R&D
facility used to assemble and test information storage equipment developed and produced by the
EMC corporation. The facility contains eight testing chambers that simulate various
environmental conditions. The rooms make intense demands on the facility's support systems,
for example the temperatures in the testing chambers are required to fluctuate between 42
degrees and 104 degrees daily.
The owner demanded that the project be finished quickly. The project team committed to
finishing the $100+ million facility in less than a year, adopting the motto "one team, one year."
CanAm, the steel fabricator, involved early in the design process by the owner, recommended
utilizing Murox panels (a prefabricated steel panel with insulation) to shorten the time it would
take to enclose the building. It was left to the steel fabricator to modify the pre-fabricated panels
so that they could be used on a multi-story building. Unfortunately, poor weather conditions
destroyed the insulation within the panels during construction and replacement of the insulation
took time away from properly designing panel modifications. The project team was forced to
consider other enclosure alternatives to complete the project on time.
To faciltiate the "ultra fast-track" project, the design and construction teams consolidated
on the project site conducting operations from a temporary consolidated trailer park (innovation
#2). The team also utilized the contractor's in-house three-dimensional graphic capabilities to
schedule, coordinate, and track the project's construction (innovation #3).
The completed facility demands large amounts of water to operate properly. The Town of
Franklin was concerned that the new EMC facility would wreak havoc on the towns fragile water
supply. To avoid any confrontations with the town, EMC decided to create its own water supply
with a self contained pump, storage system, and water recycling plan. To eliminate the stress on
the surrounding environment, EMC challenged Shooshanian engineers, the MEP designers, to
develop a system that recycled the use of its own water. Over 70% of the "blow-down"
(contaminated water) from the facility's systems is cleaned and recycled back into the facility
(innovation #3).
169
Appendix A
GBH Macomber Construction Company
EMC - Franklin
Project Organization Chart
170
Appendix A
GBH Macomber Construction Company
EMC - Franklin
Timeline
Conceptual
Design
Detailed
Design
Gorman Richardson Architects (architect) hired.
CanAm steel proposes use of modified Murox panels.
GBH Macomber Construction Company awarded
contract.
Shooshanian Engineers design self-contained
recycling water system.
Pre-Construction
Temporary facilities developed to house the design and
construction teams.
Construction
3-D graphics are used to track constuction activity and
progress.
Modified murox panels installed. Weather issues
cause problems.
Self-contained recycling water system installed by
Johnson Controls.
171
Appendix A
GBH Macomber Construction Company
IMAX Theater
The New England Aquarium, located on Boston's waterfront, is currently undergoing an
expansion that will require the construction of several buildings over the next few years. The
current project under construction is the new IMAX theater. This project is particularly difficult
because it is being built over water. The project is also difficult because the design of the New
England Aquarium's facilities do not use familiar building shapes. The building's are
characterized by odd angles and non-symmetric shapes sometimes referred to as
"deconstructionist" architecture.
To accommodate construction of the facility, Macomber Construction has proposed a
method of tracking the construction activity different from that used on a standard construction
project (innovation #1). Use of the new method requires the total commitment of the architect
and the project team in order to be successful.
The contractor also had to contend with finding an appropriate enclosure system to
protect the building from the harsh environment of the waterfront while matching the aquarium's
original facade, which is metal and formed to represent the scales of a fish. The original
building's facade succumbed to erosion caused by the harsh environment of the waterfront. For
the new building, the contractor selected the original manufacturer of the panel to make the new
panels using titanium to mitigate the corrosion caused by the harsh waterfront environment
(innovation #2).
173
Appendix A
GBH Macomber Construction Company
IMAX Theater
Project Organization Chart
174
Appendix A
GBH Macomber Construction Company
IMAX Theater
Timeline
Conceptual
Design
GBH Macomber Construction awarded contract.
GBH Macomber Construction proposes new method
of activity tracking.
E. Vernon Jackson & Associates (architect) hired.
Detailed
Design
GBH Macomber Construction identifies subcontractor
to manage exotic cladding.
Pre-Construction
Construction
175
Appendix A
Tishman Construction Corporation
4 Times Square
The 4 Times Square project was developed by The Durst Organization, a well-known
developer in New York City. The project is the first development, within the last ten years, of a
speculative office building in New York City. The construction site is located adjacent to New
York's famous Times Square.
As the project proceeded, the developer decided to turn the project into a "green"
building, making it as environmentally "friendly" as possible. To assist in focusing on the
environmental nature of the project, The Durst Organization deferred to the consultation services
of Earth Day New York and its environmental engineers.
Three different innovations resulted from the effort to create a "green" skyscraper
(innovation #1). The facility was outfitted to with fuel cells to support some of the building's
electrical load (innovation #2). Fuel cells use natural gas to create energy without any form of
combustion and all of its ill side effects. Other buildings have used fuel cells, but generally the
fuel cells are located outside of the facility to which they supply power. In this case, the fuel
cells had to be incorporated in the building's design and issues regarding fuel cell maintenance
and operation had to be taken into consideration. The fuel cells did not replace all of the power
generators due to the fact that the decision to use fuel cells was made late in the design process.
The building also included the use of photovoltaics that were integrated into the building's
enclosure system (innovation #2).
The Earth Day New York organization was also instrumental in helping the construction
team undertake an extensive recycling program associated with the 4 Times Square project
(innovation #3). A conscious effort was made to reuse and recycle any and all scrapped
construction materials. Material unpacking sites were created off-site to help foster recycling of
packing materials as well as keep the relatively small project site free from clutter.
177
Appendix A
Tishman Construction Corporation
4 Times Square
Project Organization Chart
Fox and Fowle
Architects
Earth Day
New York
Designers
Cosantini
Energy
Photovoltaics
Glassalum
International
178
Tishman
Construction
CM(A)
Sub-Contractors
Appendix A
Tishman Construction Corporation
4 Times Square
Timeline
Conceptual
Design
Fox and Fowle Architects, Inc. (architect) hired.
Tishman Construction awarded contract.
Detailed
Design
The Durst Organization, Inc. decides to develop a
"green" speculative office building.
Earth Day New York joins the project team as
environmental consultant.
Photovoltaics and fuel cells added to the building's
design.
Pre- Construction
Bid packages include requirement for all
subcontractors to participate in recycling program.
Construction
Fuel cells installed.
Photovoltaics installed.
Project recycling program in full effect..
179
Appendix A
Tishman Construction Corporation
Elevated Walkways at Logan International Airport
Boston's Logan International Airport is undergoing a large scale reconfiguration,
including the construction of new parking garages, new hotels, and elevated walkways to connect
all of the new facilities to the various existing terminals. The large walkways are essentially
oversized pre-fabricated trusses measuring 26 feet by 20 feet by 130 feet. The walkways allow
pedestrians to cross over the airport's busy roadways.
Tishman Construction works closely with the Massachusetts Port Authority
(MASSPORT), a quasi-public agency of the Commonwealth of Massachusetts, that oversees all
airport development and construction. On this project, Tishman Construction was hired to serve
as the MASSPORT's representative to oversee the design, development, and construction of the
walkway system. Tishman Construction took an active part in making decisions regarding the
overall approach to the project. The initial project team, consisting of Tishman and the owner,
decided that having to perform all of the required construction on-site would be too time
consuming and would interfere too much with the airport's traffic circulation. A subsequent
decision was made to buy oversized, pre-fabricated frames and move them into place at times
when traffic activity was expected to be low. The remaining problem was how to move the large
oversized trusses, first to the airport and second, to their final position
The project executive from Tishman Construction suggested using a barge to transport
the frames by sea to the airport's location (innovation #1). Once on land, "goldhoffers,"
hydraulically powered platforms with wheels used to transport missiles, could be used to move
the frames to their final location (innovation #2). Perini was hired as the general contractor for
the job who in turn hired the appropriate subcontractors to transport the oversized truss frames.
181
Appendix A
Tishman Construction Corporation
Elevated Walkways at Logan International Airport
Project Organization Chart
Weidlinger
Associates
Designers
Sub-Contractors
182
Global Erectors
Appendix A
Tishman Construction Corporation
Elevated Walkways at Logan International Airport
Timeline
Conceptual
Design
Tishman Construction is awarded contract.
Transportation scheme using barges and "goldhoffers"
is devised.
Detailed
Design
Cambridge 7 Associates (architect) hired.
Pre-Construction
Perini Construction hired as project general contractor.
Construction
Oversized trusses delivered by barge.
Oversized trusses are transported by "goldhoffers."
183
Appendix A
Tishman Construction Corporation
Hilton Hotel - Logan International Airport
As part of the on-going upgrade of Boston's Logan International Airport, the Hilton Hotel
Corporation was permitted to construct a new hotel as the airport's centerpiece. The new multistory hotel is located on a site between the new central parking garage and the recently
constructed central chilling plant. The hotel is also closely surrounded by the airport's
"spaghetti-like" inter-terminal roadways and city highways.
This project was overseen by the Massachusetts Port Authority (MASSPORT) which
oversees all construction at Logan International Airport. Tishman Construction acted as
MASSPORT's representative on the site. The Hilton Hotel Corporation initially selected a
construction manager to assist in pre-construction activities and follow-on work but a personnel
change in corporate management led to a change in corporate strategy and the job was placed out
for open bid.
The building design required piles of up to one-hundred and ten feet in length due to the
unstable ground conditions at the airport. Access is only available through underground highway
tunnels from the west or through a dense residential area from the north. In order to use the
highway tunnels, the piles had to be reduced in size, transported to the project, and assembled onsite. The general contractor relied on the pile manufacturer to develop a design to allow the piles
to be spliced and assembled on-site (innovation #1).
Cambridge 7 Associates, the architect, made the decision to conceal the building's
window frames primarily for visual reasons. The designer desired to break-up the "lines" caused
by the numerous windows in the building's facade. When reviewed by the acoustic engineer, it
was determined that hiding the window frames also reduced the sound transmitting
characteristics of the entire window (innovation #2). The reduced sound transmission
characteristics were very beneficial to the hotel which was located in the center of a busy airport.
"Serendipity" is credited as the "driver" behind this particular innovation.
Hilton Hotel owners specified that the hotel be equipped with "smart room technology"
from CenterCom (innovation #3). The integrated system uses an infrared thermostat and other
sensors to relay information on a room's status. The integrated system controls overhead costs
by monitoring air conditioning, heating, and lighting based on room occupancy. The system also
fosters improved hotel service by providing discrete information to hotel personnel; customers no
longer need be disturbed by unwelcome knocking at the door by intrusive maid or other room
services. Hilton had worked with CenterCom previously on other similar projects.
185
Appendix A
Tishman Construction Corporation
Hilton Hotel - Logan International Airport
Project Organization Chart
186
Appendix A
Tishman Construction Corporation
Hilton Hotel - Logan International Airport
Timeline
Cambridge 7 Associates (architect) hired.
Conceptual
Design
Detailed
Design
Acoustic engineer determines concealed window
frame abates noise.
Tishman performs as an agent for MASSPORT.
Pre-Construction
-
Construction
Beacon Skanska USA awarded GC contract.
Beacon Skanska USA directs subcontractor to splice
piles.
Window frames are embedded in the facilitie's
enclosure system.
Hilton Hotel decides to incorporate "smart room
technology" from CenterCom.
187
Appendix A
Tishman Construction Corporation
Wang Center for the Performing Arts
The Wang Center for the Performing Arts, located in Boston, Massachusetts' theater
district, required extensive roof renovation. The task was made difficult by the fact that the
theater's interior domed ceiling is registered as a historical landmark.
The theater's non-profit board of directors routinely use Tishman Construction to oversee
any construction activity related to the theater. The challenge in the project was to replace the
roof without damaging the ceiling at a minimal cost for the non-profit organization. Temporary
roofs and extensive scaffold-like tent systems were considered too expensive. Tishman
Construction's site superintendent approached MARR Erectors, a respectable scaffolding and
design company, to assist the project team in generating a solution to perform the needed roofing
work. Together, Tishman Construction and MARR Erectors created a plan that utilized large
rolling trusses to cover localized areas of the roof where specific construction activity could be
performed (innovation #1). Electric fans were added to the rolling trusses to assist with dust
control.
189
Appendix A
Tishman Construction Corporation
Wang Center for the Performing Arts
Project Organization Chart
190
Appendix A
Tishman Construction Corporation
Wang Center for the Performing Arts
Timeline
Conceptual
Design
Tishmam Construction serves as a program manager
for the Wang Center for the Performing Arts.
Detailed
Design
Tishman Construction collaborates with MARR
Erectors to devise a scheme for temporary
weatherproofing using a movable truss system.
Pre-Construction
Construction
Movable truss system used in the performance of
construction activity.
191
Appendix A
Turner Construction Company
Astra Gatehouse Park
Astra Pharmaceuticals is developing a new facility with laboratory and office space in
Waltham, Massachusetts. The site is located in an open area and is constrained by the presence
of designated wetlands and the fact that the facility is located directly on the town limits of two
separate towns. Each town has its own local building codes. One town mandates a height
restriction on all facility's built within its limits which caused some concern in trying to create a
suitable facility for the Astra organization.
Astra Pharmaceuticals follows a standard layout for its facilities world-wide and did not
desire to make any changes to the design. In order to meet the height restriction but maintain the
five floors of the original design, the standard structural steel frame was replaced by a structural
tube steel design. The use of the alternative tube steel cost more but allowed the project to be
designed and constructed in accordance with the owner's five-story plan. The change to tubular
steel was slightly problematic for the steel erector, Isaacson Steel. The steel erector was
unfamiliar with tube steel construction and had to collaborate with the steel fabricator and the
project structural engineer to develop a suitable means of connecting the various tube steel
components.
The Astra Gatehouse Park used a tube steel frame to satisfy a five-story layout plan while
maintaining compliance with local ordinance height restrictions.
193
Appendix A
Turner Construction Company
Astra Gatehouse Park
Project Organization Chart
194
Appendix A
Turner Construction Company
Astra Gatehouse Park
Timeline
Richmond Group serves as program manger for Astra
organization.
Conceptual
Design
Detailed
Design
-
VHB (architect) hired.
-
City ordinances drive decision to use tube steel for the
facility's structural frame.
Pre-Construction
Turner Construction awarded contract.
Isaacson steel and structural engineer collaborate to
develop feasable joints for tube steel system.
Construction
~ Tube steel frame erected by Isaacson Steel..
195
Appendix A
Turner Construction Company
Northeastern University Dormitories
The Northeastern University dormitories are located on the Northeastern campus in
Boston, Massachusetts. The buildings are characterized by an extensive use of curved lines and
surfaces. The non-familiar shapes made the construction of the project difficult for the
construction team. Each room differed in size and shape from any other room on the same floor.
Mapping electrical lines, plumbing, and HVAC services to each room became an "exercise in
detail" to ensure that everything "lined-up." Despite the troubles encountered by the project team
on this site, no innovations were identified in researching this project.
The irregular shapes of the Northeastern University dorms make it difficult for
construction teams to capitalize on economies of scale, every measurement is unique.
197
Appendix A
Turner Construction Company
Northeastern University Dormitories
Project Organization Chart
198
Appendix A
Turner Construction Company
Northeastern University Dormitories
Timeline
Conceptual
Design
Detailed
Design
William Rawn Associates, Architects, Inc. (architect)
hired.
Pre-Construction
Turner Construction awarded contract.
Construction
199
Appendix A
Turner Construction Company
World Trade Center - East Office Building
I
I
Cranes on a temporary bridge
over the construction site.
Powered platforms replace
standard scaffolding.
200
Appendix A
Turner Construction Company
World Trade Center - East Office Building
The East Office Building is located near Boston's waterfront in the Seaport district next
to Boston's world trade center. The multi-story office building is one of three in an office/hotel
complex. The East Office Building is adjacent to the hotel and surrounded by roads with highvolume traffic on the remaining three sides.
Pembroke Real Estate, the owner, desired to complete the project as quickly as possible.
Turner Construction offered to erect the building using an "up-up" sequence to shorten the
duration of the project by several months (innovation #1). The "up-up" sequence allows the
construction team to build "up" from the bottom basement floor and the ground floor
simultaneously, which uses more manpower but less time to perform the construction. The
building's structural design was modified to accommodate the new construction sequence.
Bigger column sections were used to support the ground floor at grade while the ground floor
was reinforced to act as a diaphragm, supplementing the bracing that braced the perimeter wall of
the construction area below.
Turner Construction realized that a large amount of steel erection was required to
complete the project and was concerned about blocking traffic in the adjacent roads if the cranes
required for the project had to operate directly from the street. The contractor worked with the
project structural engineer, Weidlinger Associates, to design a temporary bridge running over-top
the open excavation to serve as a holding dock for two cranes used on the project (innovation
#2). The large cranes (over 200 tons each) were able to operate on-site without blocking local
traffic.
A large majority of the building's enclosure system was hand placed brick. Buildings of
similar sizes normally use prefabricated concrete panels or some variation that is faster and
usually less costly than hand placed brick. The owner, who had overseen the erection of the
"sister" hotel (performed by a different contractor) that had a similar enclosure system, suggested
using powered, moving platforms, like the ones used on the hotel, instead of standard scaffolding
to place the brick (innovation #3). The project team agreed to use the platforms believing the
platforms could be used to speed construction, increase safety, and assist in the movement of
construction materials and equipment. During use, however, the construction team quickly
realized the drawbacks of using powered platforms. If the platforms on one side of the building
were not all at the same level, the lateral movement of the construction workers was restricted
(and unsafe). Additionally, as the building rose in height, the facade drew back; so as the
platforms moved higher, a potentially dangerous gap formed between the building and platform
system. The construction manager invested in full body harnesses and winch systems to rectify
the situation but the use of the new safety equipment further frustrated the movement of the
construction workers.
201
Appendix A
Turner Construction Company
World Trade Center - East Office Building
Project Team Organization
202
Appendix A
Turner Construction Company
World Trade Center - East Office Building
Project Team Organization
Conceptual
Design
~
Shepley, Bullfinch, Richardson, & Abbott (architects)
hired.
-
Turner Construction awarded contract.
I
Detailed
Design
Pre-Construction
~Project team commits to using "up-up" construction.
Redesign is required.
Turner Construction and Weidlinger Associates plan
crane bridge to assist construction.
Project team commits to using platform "scaffolding."
Construction
Temporary crane bridge erected an used to facilitate
steel erection.
Platform "scaffolding" used by project team.
203
Appendix A
Turner Construction Company
Trinity Place Luxury Condominiums
A 21-story luxury condominium is being built near central downtown Boston,
Massachusetts. The building is in a tight location, nestled on a triangular piece of land located
between two roadways and an existing building. Tower cranes are being utilized to facilitate the
building's construction. The facility will contain a number of high-end luxury apartments,
ground floor shops, and a below grade parking garage serviced by an automobile elevator and
valet service. No innovations were identified in association with this project.
205
Appendix A
Turner Construction Company
Trinity Place Luxury Condominiums
Project Organization Chart
206
Appendix A
Turner Construction Company
Trinity Place Luxury Condominiums
Timeline
Conceptual
Design
4.
Detailed
Design
-
Childs, Bertman, and Tseckares (architect) hired.
-
Turner Construction awarded contract.
Pre-Construction
Construction
207
APPENDIX B
Research Data
Appendix B
CM/GC
Project
ype
Complexity
Project Drivers
Project
Contract
Project Delivery
CMGC
Selection
ming of CM
volvement
Project
Success
2
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Not determinate.
Expected innovation benefit that was not realized.
No Innovation, or
Implementer was either the owner or the GC/CM and the data is already recorded, or
Demonstrates that most innovations are either for construction benefits or performance benefits, but generally not both.
211
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A
APPENDIX C
Identification of Innovation Clusters
Appendix C
Project
Complexity
1
1
Project Driver
2
Both
Other
1
3
4
1
3
5
6
1
3
1
1
7
8
9
10
12
2
13
14
1
1
1
15
16
17
18
19
1
2
1
2
1
20
2
1
21
22
1
1
4
23
2
24
1
25
26
1
27
1
29
1
1
1
1
1
2
___________
2
Innovation, Project Complexity, and Project Drivers by Project
221
3:
19
r