2013
The Journal of Professional CM/PM Practice
FALL
VOLUME II, NO. 3
Lance and Ellen Shaner Cancer Pavilion
Mount Nittany Medical Center
MWH Constructors is leading
the way in alternative delivery of
complex wet infrastructure projects
that include large pipelines and
underground tunnels. We cut
through the chaos and complexity
to build and rehabilitate all types of
wet infrastructure.
STRATEGIC SERVICES:
ConSTRuCTIon MAnAGER-AT-RISk
PRoGRESSIVE DESIGn-BuIlD
ConSTRuCTIon MAnAGEMEnT
BREAK.Through
mwhglobal.com
TABLE OF CONTENTS
10
A PRACTICAL TOOL TO PRESERVE YOUR
“KNOWLEDGE INVENTORY”
Traditional HR focuses on replacing individuals who retire, and often doesn’t
consider how an organization can capture and retain the wealth of experiential
knowledge those retirees may take with them when they leave. The Construction
Industry Institute offers a roadmap for addressing this need.
16
COLLABORATIVE GOVERNANCE
How can a complex project succeed when it has multiple
sponsors and numerous stakeholders with significant
authority. What kind of project governance structure can
foster collaboration, promote trust and support timely,
effective decision-making?
WHEN TECHNOLOGY IS A BARRIER TO COLLABORATION
In a growing trend, owners are taking control of
their information, and making a compelling case for
CMs/PMs to rethink how they can help their clients.
Program managers can lend a wealth of expertise
that can be transferred to an entire program.
ON THE COVER: MOUNT NITTANY
MEDICAL CENTER LANCE AND
ELLEN SHANER CANCER PAVILION.
CM AND PHOTOS BY ALEXANDER
BUILDING CONSTRUCTION COMPANY.
5 FROM THE CHAIR
7 FROM THE CHAIR-ELECT
8 MARKET VALUE
20 TOOLS OF THE TRADE
26 FINAL WALKTHRU
IN THIS ISSUE OF MARKET VALUE:
CMs HELP PROJECTS SUCCEED
A new study finds that professional construction
managers are outstanding leaders of successful
projects that feature more effective communications,
fewer crises and fewer “surprises” for the owner.
Advisor Fall 2013
DEPARTMENTS
3
22
TABLE OF CONTENTS
CONTRIBUTORS
Chairman of the Board
Mike Potter, PE, CCM
President and Chief Executive Officer
Bruce D’Agostino, CAE, FCMAA
Editor
John McKeon
Associate Editor
Kenzie Mahla
Design and Marketing
TGD Communications, Inc.
JOHN R. MCQUARY
John R. McQuary is Vice President, Knowledge
Management and Technology Strategies at Fluor
Corporation and chaired the Construction Industry
Institute’s Research Team 292, “Transferring Experiential
Knowledge from the Near-Retirement Generation to
the Next Generation.” At Fluor, he has led the company’s
Knowledge Management program from initial concept
to its current recognition as an industry leader.
Advertising Sales
Mark Gedris
CMAA Vice President, Marketing
mgedris@cmaanet.org
BRIAN J. MCCARTHY
CMAA is a construction industry
association of 11,000-plus firms
and professionals who provide
management services to owners
who are planning, designing, and
constructing capital facilities
and infrastructure projects.
The Mission of CMAA is to promote
the profession of Construction
Management and the use of
qualified Construction Managers
on all capital projects and programs.
Advisor, published bi­‑monthly
by CMAA, reports on and follows
the industry as a service to
its members. Submission of
articles, ideas, and suggestions
is appreciated and encouraged.
4
Advisor Fall 2013
7926 Jones Branch Drive, Suite 800
McLean, Virginia 22102-3303 USA
Phone: 703.356.2622
Fax: 703.356.6388
Email: info@cmaanet.org
Web: www.cmaanet.org
CMAA ©Copyright 2013,
ISSN 1084-75327
Reproduction or redistribution
in any form is forbidden without
written permission of the publisher.
CMAA members receive this
newsletter as a member benefit.
For advertising information,
contact Mark Gedris at CMAA,
mgedris@cmaanet.org.
Brian J. McCarthy is an Associate and Program Manager
at CDM Smith, working with clients on large capital
infrastructure programs, and leads the firm’s program
controls practice and program management training.
He has over 25 years of experience in managing
environmental and infrastructure projects and programs.
SERGIO ARANDA
Sergio Aranda is Partner Manager for e-Builder, Inc.,
a provider of cloud-based construction program
management software. In this role Sergio serves as liaison
between the top engineering/Construction Management
firms and owners in the infrastructure, water/wastewater,
higher education, and healthcare industries.
KEVIN MCKENNA
Kevin McKenna is a Senior VP and Partner managing
Clayco’s Chicago office. His experience ranges from
Project Engineer to Project Director on various projects.
Kevin is involved at a Project Partner level in the
project from beginning to end.
TABLE OF CONTENTS
FROM THE CHAIR
CMAA TRANSFORMED
What an exciting time to be a part of CMAA! Our Association is being transformed
before our eyes. I am convinced that we will look back on this day and ask “Remember
when…?” Remember when CMAA joined ABET? Remember when the Construction
Industry Institute endorsed the CCM?
The energy at the chapter level is palpable. I sense the ‘buzz’ as I interact with chapter
leaders at CMAA’s conferences or witness first hand crowded events such as the
Owner’s Forum in Boston, and the Annual Awards Events at Metro New York/New
Jersey, Baltimore and National Capital Chapters. Having served at many levels of
chapter leadership, it is gratifying to see how chapters continue to add enthusiasm
to their programs.
The CII Annual Conference in Orlando was excellent, and I encourage all of you to
take part in their programs and/or national conference next year. Once you see what
they do, and you experience who is in the room, you will immediately see what a
perfect alliance we have. It was quite something to sit in the audience listening first
to CII Executive Director Wayne Crew and then CII Chairman Glenn Gilkey, Senior VP
with Fluor, tell their members that the CCM is the way to go. Understand that the 700
people in the room hail from “small” organizations like ExxonMobil, DuPont, Chevron,
CB&I, Fluor, and Bechtel. Imagine the possibilities.
Then, due to our recognized expertise in the CM profession, we have been admitted
to ABET, formerly the Accreditation Board for Engineering and Technology. As a
member, CMAA will lead the development of a new accreditation for CM curricula.
Think of the benefits this relationship will bring to our Association, and of course, to
the ultimate beneficiary, the owner.
We have been given quite an opportunity. Don’t miss the chance to be part of this
transformation. Use this mantle of authority, granted to our Association, to protect
the owner. When confronted with those who profess that design-build is the only way
to go, or that CMAR/CMGC is the best delivery method, or that all projects must be
low bid, pull out your CCM ‘card’ and make sure the owner understands that CMAA
continues to be the place to come for unbiased education and advice, where our
CCM’s are there to help them determine the best delivery method for their particular
program or project, with only one agenda in mind—benefit to the owner’s project.
MIKE POTTER, PE, CCM
Mike Potter is in charge of RK&K’s
Construction Management and
Inspection division. RK&K has
led large CM teams in managing
multi-billion dollar programs,
and Mr. Potter has taken the
lead in substantially expanding
RK&K’s reach into new geographic
markets and new services. His
CMAA experience includes serving
as chapter president, contributor
to CMAA publications, teaching
Professional Construction
Management courses, and
chairing/contributing to various
Board committees.
5
Advisor Fall 2013
There is a great deal to do. And, you will be better at what you do for having
participated in these new CMAA programs. Let’s get to work.
Trump Towers Rio
Rio de Janeiro, Brazil
Grand Egyptian Museum
Giza, Egypt
Flame Towers
Baku, Azerbaijan
If you can imagine it, we can manage it.
For nearly four decades, owners have turned to Hill
International to manage their largest and most complex
construction projects and programs around the world. Hill is
proud to have helped our clients turn their most challenging
visions into realities. We have helped manage over 5,000
projects with a total construction value in excess of $250
billion, managing all phases of the construction process
from concept through completion. Hill is also the leading
construction claims firm in the world, having helped resolve
over 25,000 disputes valued at more than $100 billion. To
minimize risk and maximize results on your next project,
turn to Hill International.
www.hillintl.com
©2013 Hill International, Inc.
Shams Gateway Towers
Abu Dhabi, UAE
TABLE OF CONTENTS
FROM THE CHAIR-ELECT
WHY ABET? WHY CMAA? WHY NOW?
CMAA’s admission into ABET, the pre-eminent accrediting agency for undergraduate
technical education, truly marks a new era for CMAA. It is both a recognition of all
we have accomplished to date for the Construction Management profession and a
significant commitment to continued achievement in the future.
The industry’s long-range workforce concerns have been well documented, and even
in good times weigh on the minds of our most far-sighted managers. By becoming
part of ABET, CMAA is placing itself squarely in the center of the solution.
As a member society of ABET, CMAA will lead the effort to define the content of a
sound fundamental CM education. This includes developing model curricula and
specifying the criteria on which applicant institutions will be evaluated: Everything
from the number and qualifications of faculty to class sizes and availability of
internships and similar opportunities.
We will provide the seasoned professionals to conduct site visits and evaluate
programs. We will bestow, renew and (rarely, we hope) rescind the accreditations
on which the entire industry will rely as indicators of quality.
This new initiative reflects the industry’s recognition of CM as a profession distinct
from architecture and engineering, requiring different skillsets, knowledge, and
training. It’s also a validation for CMAA, recognizing our Standards of Practice,
our Body of Knowledge, and our experience in identifying the most qualified
practitioners through our CCM credential.
The timing is also ideal. The Construction Industry Institute’s recent endorsement
of the CCM is the most tangible evidence yet that CMAA “has the goods” when it
comes to defining CM professionalism.
I have always thought that ABET was one of the most rigorous and meaningful
accreditations available for a college or university program. To be welcomed by
ABET is indeed a great honor for CMAA, something of which we can all be proud.
MILO RIVERSO, PHD, PE,
PRESIDENT & CEO, STV INC.
CHAIR-ELECT, CMAA
Milo Riverso is president and CEO
of STV Group, Inc., one of the
nation’s largest planning, design
and construction management
firms. Mr. Riverso has more than
30 years of experience in program
management, construction and
design management. STV is
involved with many prestigious
projects throughout the
country, including the program
management of 1 World Trade
Center (formerly the Freedom
Tower) in New York City.
This is a profound change for CMAA, but I know we are equal to the task.
7
Managing this program will be a challenge—not just to the Board of Directors or
the headquarters staff, but to all of CMAA. The effort will require the consistent
volunteer support of a large number of solid, seasoned practitioners, people who
are willing and able to make a multi-year commitment.
Advisor Fall 2013
It is likely that some institutions with current ABET accreditations in fields like
Construction Engineering or Construction Engineering Technology will want to
add the CM accreditation. In addition, perhaps one-quarter to one-third of the
roughly 70 institutions now accredited by the Accreditation Council for Construction
Education (ACCE) may want to switch to an accreditation that addresses CM more
specifically and thoroughly.
TABLE OF CONTENTS
MARKET VALUE
CMs HELP PROJECTS SUCCEED, STUDY FINDS
Professional construction managers
are outstanding leaders of successful
projects that feature more effective
communications, fewer crises and
fewer “surprises” for the owner.
That’s the key conclusion of a major
new market research study carried out
recently by McGraw-Hill Construction
for the CMAA Foundation. It’s the first
time a rigorous and extensive study
has quantified the benefits owners
realize from having a professional CM
as their agent in executing a project.
The study looked at 623 projects,
including 266 on which an Agency
CM was retained and 357 without
an ACM. The mean value of these
projects was $17.8 million with
ACM and $13.4 million without.
Projects were selected from
McGraw-Hill’s Dodge Reports
database and embraced six major
industry sectors: K-12 education,
higher education, government
buildings, healthcare, streets/
highways, and water/wastewater.
The actual composition of the
sample was:
K-12 education . . . . . . . . . . . . . . . . 87
Higher education . . . . . . . . . . . . . . 85
Government buildings . . . . . . . . 101
Healthcare . . . . . . . . . . . . . . . . . . . . 98
Streets/highways . . . . . . . . . . . . . 105
Water/wastewater . . . . . . . . . . . 121
Top Ratings for Leadership,
Communication,
Avoiding Problems
•86 percent rated their CMs highly
for facilitating communication on
the project.
•85 percent gave top scores for
avoiding or navigating project crises.
•81 percent said their CMs were
highly or very effective in assuring
that the project team met its
contract obligations.
Effectiveness of ACM
8
Advisor Fall 2013
Overall public relations
effort for the project
Past ACM User
ACM
Negotiating with the GC
•Assuring the project team met
contract obligations (59 percent)
•Avoiding or navigating project
crises (58 percent)
•Facilitating communication
(58 percent)
Leadership is a key benefit of
professional CM: 82 percent of
owners who used Agency CM gave
their CMs top ratings for leading
the project team.
Avoiding or navigating
project crises
Assuring that the team meets
contract obligations
Among the 357 non-ACM projects
in this study, 23 percent of owners
(81 projects) had used Agency CM in
the past. These past ACM users also
rated CMs highly for:
80 percent of the owners who used
Agency CM on their projects in this
study are highly likely to recommend
ACM to other owners (ratings of 7+
on a scale of 10). 71 percent of owners
ranked their likelihood to recommend
at 8 or higher!
80 percent of owners using Agency
CM on the survey project said they
were very likely or most likely to use
ACM again in the future.
Even among the 352 non-ACM
projects, about one-third (34 percent)
said they were at least somewhat
likely to use ACM on a future project.
These owners, although they did
not use Agency CM on the studied
project, nevertheless saw strong
reasons to use the professional
service in the future:
•Project is considered very complex
(71 percent)
•Project is expected to have schedule
or budget issues (43 percent)
Facilitating communication
on the project
Leading the project team
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
% Top-2-Box
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“It Could Have Been Worse!”
ACM
Likelihood to Recommend
9.4%
Not at all likely
20.3%
2
3
11.7%
4
5
No Surprises
Projects with an ACM did somewhat
better than non-ACM projects in this
study in terms of meeting or beating
budget and schedule goals.
With an ACM, 84.9 percent of
projects finished on or under budget,
compared to 81.9 percent of the
non-ACM projects.
68.8 percent of ACM projects were on
or ahead of schedule, compared with
65.9 percent of the non-ACM projects.
6
38.7%
7
8
9
Most Likely
But owners also reported how often
these schedule and budget outcomes
were surprises to them. For example,
among non-ACM users whose
projects finished behind schedule, this
outcome was “unexpected” to 58.7
percent. Even when a project finished
ahead of schedule, it was a surprise
to 59.5 percent of non-ACM owners.
Whether their projects finished on,
under or over budget, ACM client
owners knew what to expect. This is
no surprise, considering the 86 percent
who rated their CMs highly effective
in facilitating communication!
Even among projects that were over
budget, behind schedule, or both,
the value of professional CM was
recognized. 88 percent of owners said
their Agency CMs were effective to
very effective in saving these projects
from even more negative outcomes!
Among these troubled projects,
only 16.2 percent of ACM users
said “ineffective management”
had significant or a great deal of
impact on the outcome. Among
non-ACM projects, 24.4 percent
of owners identified ineffective
management as having significant
or a great deal of impact.
Conclusion?
Projects guided by a professional
Agency CM are more likely to
meet or exceed budget and
schedule goals than projects
without an ACM. Owners working
with a professional Agency CM
experience smoother, more
trouble-free projects characterized
by leadership, communication,
and met expectations.
The full report of this research
project will be available soon
from the CMAA Foundation.
Preventing more problems
35.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Ineffective
2
3
4
Very Effective
This research project was funded
by the CMAA Foundation, a 501(c)3
organization dedicated to industry
education and research. Learn more
and support the foundation at
www.cmaafoundation.org.
9
25.0%
Advisor Fall 2013
30.0%
TABLE OF CONTENTS
A Practical Tool to Preserve
Your “Knowledge Inventory”
(Excerpted from Transferring Experiential Knowledge from the Near-Retirement
Generation to the Next Generation, report of Research Team 292, Construction
Industry Institute, Summer 2013.)
10 Advisor Fall 2013
As the Baby Boomer generation nears retirement, organizations in most industries are finding
themselves facing a potential mass exodus of their most senior and experienced employees.
Potential retirees in the construction industry have a knowledge inventory accrued through a
career of successes and failures. This knowledge base is often the foundation of decisions that
enhance operational efficiency, foster innovation, reduce critical errors, and enable corporate
growth. Traditional human resources practices aim at replacing the individual and often do
little to consider how their wealth of experiential knowledge can be retained prior to their
departure. Not only does this practice affect an organization’s capacity to operate effectively,
but in addition to the new hire’s salary, the cost of replacing an experienced individual with
someone from the outside can range between 50 and 150 percent of salary.
TABLE OF CONTENTS
The team developed a framework for an effective
experiential knowledge retention model and formulated
a customizable knowledge retention program. This model,
at a high level, has the following functions:
•Aids in the implementation and preparation of a
corporate KM program;
•Assesses current risk of experiential knowledge loss
across organizational knowledge areas called Subject
Matter Areas (SMA);
•Identifies at-risk individuals whose departure would
result in the loss of considerable experiential knowledge;
•Provides a mechanism for effectively planning to
transfer/retain the knowledge at risk; and
•Offers guidelines for implementing the plan.
The model detailed is available in CII Implementation
Resource (IR) 292-2, Implementing an Experiential
Knowledge Retention Management Model. This article
provides a high-level overview of the model and its
major components.
The model is composed of five phases, together with
specific implementation steps falling within those
phases, as shown in the accompanying figure.
Phase 1: Prepare
The preparation phase is a high-level initialization of the
overall knowledge retention program. The intent is that
the program will be formalized and applied across the
organization. Establishing leadership roles, goals and
metrics are its primary outcomes.
Step 1: Prepare for Knowledge Retention Management.
The only step included in the first phase establishes the
leadership, resources, and support infrastructure necessary
to launch an experiential KM program. It requires the
establishment of program scope, objectives, and priorities;
instituting these elements early ensures alignment and
contributes to the program’s overall success.
Phase 2: Assess
The steps of the assessment phase are taken at all
organizational levels, but are most applicable to the
company’s SMAs. The goal is to pinpoint the risk within
the SMAs, and particularly the SMAs in which the risk
is greatest. During assessment, program implementers
conduct a demographic analysis to identify where such
risks may exist, and a criticality assessment to prioritize
the identified risks. This phase also involves formulation
of an approval estimate for continued funding through the
planning phase, as well as a stop gate to ensure approval
for continuation of selected risk mitigation cases.
Step 2: Target SMEs and SMAs through Business Unit
Demographic Analysis. This step constitutes the
demographic analysis of the assessment phase and is
critical to identifying which subject matter areas and
which subject matter experts require further consideration.
This analysis exposes risk potential to determine the
organization’s present and future need for experiential
knowledge management.
Step 3: Confirm Feasibility of Effort for Retention Planning.
This step provides an opportunity to determine the
feasibility of continued assessment and planning for
experiential knowledge retention through steps 4, 5, and 6.
Step 4: Prioritize SMAs and SMEs for Knowledge Retention.
This step requires the organization to perform an in-depth
assessment of its bench strength in each SMA, and a
thorough evaluation of the knowledge criticality of each
of its SMEs. Aggregating these assessments will enable the
prioritization of any knowledge retention efforts, and will
serve as a decision support mechanism during resource
allocation planning.
Phase 3: Plan
In the planning phase, program implementers look
specifically at the SMEs identified in the assessment phase,
with an eye toward maximizing the effectiveness of the
company’s knowledge retention efforts. This maximization
depends on effective planning of the knowledge transfer
case. This phase involves characterizing the transfer
environment, and selecting a knowledge transfer strategy
(KTS) appropriate to the environment and to the SME’s
personal attributes. The planning phase also requires
looking at the specific business-related objectives involved
with a transfer case and getting approval at a stop gate
prior to continuation of execution.
11 Advisor Fall 2013
CII formed Research Team 292, Transferring Experiential
Knowledge from the Near-Retirement Generation to
the Next Generation, to address the increased rate of
knowledge loss in the capital projects industry; the study
was chartered to aim at the retention of experiential
knowledge that is at risk of loss due to retirements. RT292
investigated the current state of the industry’s Knowledge
Management (KM) in order to understand its knowledge
transfer problem in terms of magnitude and dynamics, and
to isolate the contributing factors and barriers to success.
TABLE OF CONTENTS
12 Advisor Fall 2013
Table 1: Knowledge Transfer Strategies
KTS Index
KTS Name
KTS-01
Lessons Learned and Best Practices
KTS-02
Community of Practice
KTS-03
Facilitated Masters’ Classes
KTS-04
Lunchtime Seminar
KTS-05
Narrative Database/Storytelling
KTS-06
Standardized College Program/Course
KTS-07
IT Collaboration/Communication
KTS-08
Outsourcing/Acquisition
KTS-09
Deskside Review
KTS-10
Job Shadow
KTS-11
Mentoring/Coaching
KTS-12
Simulations
KTS-13
Job Rotation
KTS-14
Attend Meetings as an Observer/Learner
KTS-15
Grooming Assignment
KTS-16
Keep Retirees Connected
“Maximization (of effectiveness)
depends on effective planning of
the knowledge transfer case. This
phase involves characterizing the
transfer environment, and selecting
a knowledge transfer strategy (KTS)
appropriate to the environment and
to the SME’s personal attributes.”
Step 5: Characterize Knowledge Transfer Environment. This
step begins to look at individual SMEs and the conditions
in which their knowledge transfer will take place. At
this point, the program implementers first investigate
how the knowledge transfer environment will affect the
effectiveness of knowledge transfer strategies. They then
narrow the scope of applicable strategies according to
their maximal effectiveness in the given environment.
Step 7: Prepare Business Case for Each SME and Confirm
Priorities. This step entails the development of a business
case for the mitigation effort. The focus should be on
quantifying the efforts, benefits, and cost of the transfer
effort, in order to gain approval for the mitigation case.
This business case analysis is necessary to ensure feasibility
and approval for continued funding through steps 8 and 9
for each at-risk SME.
Step 6: Select Knowledge Transfer for the Case. To expand
on the KTS effectiveness maximization introduced in
Step 5, program implementers next consider the unique,
qualitative, and personal nature of a knowledge transfer
case. This step requires all case stakeholders to evaluate
the KTS alternatives isolated in Step 5 and to select the
strategy that will best suit the case. Tables 1 and 2 list
the most widely used KTS options and their suitability
for particular environments.
Gate: Approval Gate for Execution. This serves as a screen to
determine which SME transfer cases will proceed through
to implementation. The approval process is based upon
the submission, review and approval of the business case
developed in step 7.
TABLE OF CONTENTS
Figure 2: Experiential Knowledge Retention Management Model
Organization
Prepare
SMA
SME
1
Assess
2
3
4
5
Plan
9
Execute
Monitor
6
7
Gate
8
10
Process Flow Step Legend
1 Prepare for Knowledge Retention Management Process
7 Prepare Business Case for Each SME and Confirm Priorities
2 Target SMEs & SMAs through Business Unit Demographic Analysis
8 Develop SME Knowledge Retention Implementation Plan
3 Confirm Feasibility of Effort for Knowledge Retention Planning
9 Implement & Monitor Knowledge Retention
4 Prioritization of SMAs & SMEs for Knowledge Retention
10 Prepare for Knowledge Retention Management Process
5 Characterize Knowledge Transfer Environment
Gate
Approval Gate for Execution
6 Select Knowledge Transfer Strategy for Case
Phase 4: Execute
14 Advisor Fall 2013
Step 8: Develop SME Knowledge Retention Implementation
Plan. The plan should expand on the business case
developed in step 7 and include implementation,
execution and monitoring mechanisms.
Step 9: Implement and Monitor Knowledge Retention
Case. This step involves, first, implementation of the
plan developed in step 8, then monitoring of progress,
adaptation as needed and capture of lessons learned.
Phase 5: Monitor
This phase provides an ongoing means to review
the efficacy of the whole program and to identify
opportunities for improvement.
Step 10: Monitor Effectiveness of Knowledge Retention
Model. Monitoring program effectiveness enables
continuous improvement and helps implementers
customize the program to suit the organizational
culture, ensure attainment of program goals, and
sustain the organization’s experiential knowledge
management efforts.
The Construction Industry Institute, based at The
University of Texas at Austin, is a consortium of more
than 130 leading owner, engineering-contractor, and
supplier firms from both the public and private arenas.
CII conducts original research and publishes a full
library of construction industry Best Practices.
John McQuary, chair of Research Team 292, can be
reached at john.mcquary@fluor.com.
PORTFOLIO
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PROJECT
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Critical Path Scheduling
Earned Value
Risk Management
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Business Intelligence
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X
Projects By Type
X
Cost To Profit
160
70
140
60
120
50
100
40
80
30
60
Backlog By Type
X
Work Efficiency Ratio
X
20
10
0
0
1/5/2002
1/6/2002
1/7/2002
Construction Apportionment
1/8/2002
Work Under Contract
3
Work in Progress (WIP)
Unstarted Contracts (Backlog)
2.5
Contract Changes
2
Projected Revenue
Projected Cost
1
Projected Profit
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$46M
$33M
$178M
$52.5M
$309.5M
$275M
11%
0
0
1/9/2002
X
KPIs and Linked Reports
Work Efficiency Ratio
3.5
1.5
20
40
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Budget To Actual
X
0 .5
1
1.5
2
2.5
3
X
Stacked Revenue
100%
Multiple Project (Approved & Pending)
Budget Performance History
Anticipated Cost (Multiple Projects)
90%
Commitment Log
80%
Anticipated Budget
70%
Budget Variance By Month
60%
Budget Summary
50%
Daily Reports Dashboard
40%
30%
20%
10%
0%
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TABLE OF CONTENTS
Collaborative
Governance
16 Advisor Fall 2013
By Brian McCarthy, PE,
PMP, CDM Smith
Experienced program and Construction
Managers can attest to the importance of an
effective governance structure. Well-defined
program objectives, roles, responsibilities and
decision-making authorities provide an essential
framework to guide the actions of the many
participants in a capital program. This is hardly
a subject for debate, evidenced by the emphasis
this topic receives in CMAA’s Standards of Practice,
PMI’s Standard for Program Management, and
the British Office of Government Commerce’s
Managing Successful Programmes.
TABLE OF CONTENTS
Program managers can also attest that
implementing an effective governance
structure is not a simple exercise, even
when there is only one sponsoring
organization. Variations in culture,
politics, and existing structures
within the sponsoring organization,
coupled with the perspectives of other
program stakeholders, make “getting
everyone on the same page” no trivial
matter. Place this in the context of
the long time-frame of a capital
program, where we should expect
multiple changes not only within
the program itself, but also in the
external environment, and achieving
a coherent, sustaining governance
structure can be quite challenging.
But what about when there is more
than one sponsoring organization?
Or when some external stakeholders
possess significant authority in
determining program objectives,
making functional decisions, or
program financial decisions? How
can sponsoring organizations with
differing agendas work together
to deliver a program? This article
identifies some of the governance
implications in these situations and
offers a few strategies for managing
the additional complexity.
The complex interrelationships
among program organizations, and
the people within those organizations,
cannot be fully understood by
modeling the organization as
a pyramid. Understanding the
relationships is the key to exploring
the existing cultural, political, and
organizational dynamics that must be
considered in developing an effective
governance structure. Using a tool
like social network analysis can add a
quantifiable dimension to aid in this
understanding, but merely thinking
in terms of networks provides a
great benefit.
With multiple sponsors on a program,
where the sponsoring organizations
must truly collaborate to have the
program realize its intended benefits,
network models can be used to define
and visualize the existing relationships
and structures, as well as define the
new program structure, illustrating
the changes in relationships, roles
and responsibilities that must occur
to make the program successful. We
can use network models to illustrate
the differences in relationships and
authorities over the lifecycle of the
program and in different components
or sub-programs. Social network
models are also useful in managing
organizational risk, particularly in
identifying “spanners” or critical
links between different elements of
the network. For example, knowing
that a single person is the only
communication link between two
critical elements of a program network
should be a matter of concern that
deserves, at a minimum, some
contingency planning.
Building and Sustaining
a Governance Structure
Simply put, the governance structure
needs to define who decides what,
how they decide, and when they
decide. The sponsoring organizations
must agree on these elements or the
stage will be set for mistrust, disputes,
delays, inefficiency, increased risk,
and increased cost. Establishing the
structure and obtaining acceptance
from the individuals within the
affected organizations can take many
months or even years. This process
can seem excruciatingly long to those
who desire to see the benefits of the
program, and to those who see this
as a bureaucracy-building inefficient
use of resources that would be better
spent on hard construction. However,
if the time and resources are not spent
establishing the right governance
structure, then the benefits may
never be realized, and much more
money will be wasted because of
poor decisions and execution. We
must often start slow to go fast.
Drawing on the standards mentioned
earlier, the program sponsors need
to define all the elements of the
governance structure, especially
change management. Programs by
their nature are not fully defined
at the outset. Overall objectives
and desired benefits are established,
along with some concepts of how
to achieve them. Once execution
starts, choices and decisions must
be made, and changes in the external
environment start to affect the
program, requiring adaptation and
change. The collaborators must
Undework
There is a growing body of knowledge
in project and program management
that compels us to think of
the relationships among program
participants using network,
rather than hierarchical, models.
“If the time and resources are not spent
establishing the right governance structure,
then the benefits may never be realized.”
17 Advisor Fall 2013
Bob Prieto, in Strategic Program
Management, identifies effective
governance as the key to successful
program delivery and the outcome
of effective governance to be
“the requisite confidence in the
program management strategy and
organization which is the sine qua
non of successful program execution.”
TABLE OF CONTENTS
“When sponsoring organizations have significant cultural
differences, such as interpersonal communication
style, language, or respect for hierarchy, the governance
mechanisms need to acknowledge these differences and
create workable solutions.”
18 Advisor Fall 2013
anticipate these changes, how the
changes may affect them differently,
and how decisions can be made that
best serve the overall objectives of
the program, even if an individual
decision may not provide the ideal
outcome from one participant’s
perspective. It is this difference in
perspective on an outcome that
is the root of potential conflict
among the parties.
organizations can help to sustain
the collaborative commitments
established at the outset.
Strong and effective leadership
within each of the sponsoring organizations is critical to establishing the
governance structure and sustaining
it over the program lifecycle. Leaders need to establish and maintain
trust between themselves and their
collaborators at the highest level of
the program. They also must foster
a collaborative culture within their
organizations, so that the tenets of
the collaborative relationship can be
understood, accepted, and practiced
at all levels within the organizations.
Program delivery is a social activity—
the interactions between people
drive the program forward. The
governance structure must make
sense to the people who will be
asked to implement and adhere
to it. When sponsoring organizations
have significant cultural differences,
such as interpersonal communication style, language, or respect for
hierarchy, the governance mechanisms need to acknowledge these
differences and create workable
solutions that will be acceptable and
understandable to those who are
asked to live by the rules. It is difficult
to underestimate the attention and
energy this aspect of the process
requires, not only when establishing the governance structure, but in
enabling it to work effectively and be
sustained for the program duration.
Large capital programs often last for
10, or even 20 years. Leaders must be
visionary, and anticipate the changes
that may occur over the life of the
program, including changes in people.
For a collaborative relationship to
be sustained over that time-frame,
leaders must recognize that many
people (and support organizations)
will enter and leave the program.
Succession planning for program
participants within their own
One of the sponsoring organizations
may appear to be a natural choice for
leading program execution, based
on its history in executing similar
programs, presence of experienced
staff, and possession of established
work processes and controls. While
this may seem to be the most efficient
way to deliver the program, it has
the potential to erode trust among
the collaborators. The non-lead
organizations may perceive bias or
pursuit of agendas that are not in
keeping with the spirit or letter of
the agreed-to governance structure.
In these situations, transparency
to the non-lead organizations is a
must. This may require cultural and
operational changes within the lead
organization, and acceptance of
independent audits as a means to
reassure the other organizations.
If a special-purpose entity is created
to oversee the program, or a professional program management team is
engaged to execute it, the governance
structure must clearly describe the
decision-making authority of that
entity, and which decisions will be
left to the sponsoring organizations.
The sponsors must also accept that
to be efficient, this third party will
need to deploy independent management systems and structure (create its
own bureaucracy), which may seem
wasteful to some participants who
would advocate their own organization would be an efficient and natural
lead. The governance structure needs
to articulate why this is the best
choice and the leaders must communicate the strategy within their
organizations to gain acceptance.
Executing a program is an adventure,
beginning with vision and goals,
developing a plan to achieve those
goals, and assembling the resources
to execute the plan. Change is inevitable, and good program managers
embrace change and complexity as
part of the adventure. When multiple
organizations collaborate to sponsor
a program, the adventure becomes
riskier. The keys to managing the risks
are a robust governance structure and
strong leadership that embraces and
sustains it.
Brian McCarthy can be reached at
mccarthybj@cdmsmith.com.
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19 Advisor Fall 2013
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TABLE OF CONTENTS
TOOLS OF THE TRADE
“Key to successful program management is the strength of the organizational
foundation and degree of integration between each of these processes. While a
range of individual tools exist to implement each framework process, benefits
accrue when these tools are as seamlessly integrated as possible.”
—From “The Giga Factor,” by Bob Prieto, published by CMAA.
Perhaps it’s a name like “vertical integration” or “organizational transformation,” or an
acronym like DBFOM (Design-Build-Finance-Operate-Maintain). Either way, the underlying
phenomenon is rapidly changing how CM firms and teams are organized and what owners
expect from their service providers.
Today’s goal is to deliver an ever-broader array of services and resources through structures
in which people, tools, and systems all work together.
Here’s an example of how one CMAA member firm is approaching the challenges of
integrating its services and operations.
By Kevin McKenna, Clayco
Our Industry Is Being Transformed
20 Advisor Fall 2013
Clayco didn’t get into this business with the idea of changing it. It started slowly. Day by day, project
by project, it started happening. We found the traditional approach to design-bid-build didn’t suit us. We
listened to our clients’ struggles and set about to find ways to deliver their projects efficiently, cost effectively
and collaboratively. At Clayco, our approach is totally different; we want to be involved from the inception.
As a result, our full service, turnkey approach to design and construction includes comprehensive real estate
development, space planning, architecture, design-build construction services and even extends to furnishing
selection and procurement. This gives our client a single point of contact within Clayco and that means every
communication is streamlined. This approach speeds up planning and approvals, saving time and money
while ensuring that a client’s vision is understood at every step of the process.
Clayco’s Integrated Delivery means a project is handled from its inception by a complete team of experts
and stakeholders. This integrated team represents all facets of the project. The group is unified in their
resolve to produce the best solution to fit the client’s requirement without any competing agendas. The
team uses whatever means and methods or technology available to eliminate waste and increase efficiencies
throughout the process. Their ultimate goal is maximizing the value to the owner for their investment.
TABLE OF CONTENTS
At Clayco we build the team first, then the building. The
key component to the team is the property owner. This
is the one person who must be totally committed to the
project. If an owner needs to understand financing, we
can help. If their concern is finding the proper land to
locate the building, we can assist. From the site side,
to the financing side, to the development side of the
equation, we are experts at incentive negotiation.
Clayco’s commitment to Building Information Modeling
or BIM is a key component to the delivery process. BIM
uses 3-D design to control and expedite the coordination
of architects, engineers and contractors. Together the team
can see how a single decision can affect every aspect of
a job. This modeling is more efficient, more sustainable
and less wasteful. It takes the guesswork and risk out of
a project and, coupled with cost analysis, allows decisions
to be made quickly and with more confidence. Most
importantly, what the Clayco team puts on paper matches
what the owner expects to pay.
BIM extends into the field as well. Project managers,
superintendents and subcontractors can take their tablets
to the construction site and use GPS locators along with
the model to truly visualize all aspects of the building.
The models and the supporting software are excellent
for tracking issues of concern. Field staff can take pictures
and create a request for information (RFI) and log the item
with the design team for clarification. This technology
helps ensures quality, controls inventory costs and
eliminates waste.
The integrated services model ensures that all the tools are
in the toolbox from the beginning. Technical assistance,
virtual design, construction and quality control help our
clients save money. We work through the owner’s criteria.
Our staff designs and builds the building on paper before
it is built in the field. We work to make sure there are no
conflicts so when we show up in the field everything is in
place, allowing us to build as fast and efficiently as possible.
We are committed to the environment and sustainability.
Sustainability to Clayco is simply being smart when you
design and construct a facility and the truth is it makes
good economic sense. With real time cost analysis, accurate
decisions are made and valuable resources are protected.
Sustainability also means regarding the communities
in which we build as our own, building projects that
enhance them, applying practices that reduce waste
and creating programs that give back to the people.
Everyone tends to focus on the physical building, but
buildings represent so much more than that. We deliver
efficient, effective hospitals so doctors and nurses can
focus on patient care. We build community centers
around the country that are neighborhood anchors.
We look ahead to design the workplaces of the future,
making sure employees have the collaborative space
needed to nurture day to day relationships that create
trust. At Clayco teamwork is a defining principle of our
firm and it is that teamwork that makes our integrated
delivery so successful for our customers.
Kevin McKenna can be reached at mckennak@claycorp.com.
21 Advisor Fall 2013
Our integrated services also extend to financing and
logistics. We mitigate owner risk through our strong
bonding capacity, backed by our capital resources. With
an acute attention to detail, nothing in the construction
process is left to chance. We develop a plan for all projects
to address staging, access, material transport, material
handling and labor issues. With business units focused
on every aspect of integrated delivery, we bring together
Clayco professionals to collaborate with the client from
beginning to end.
TABLE OF CONTENTS
WHEN TECHNOLOGY IS A
BARRIER
TO COLLABORATION
22 Advisor Fall 2013
By Sergio Aranda, e-Builder, Inc.
More and more project owners are looking to cloud-based project
information management systems to enhance and improve project
delivery to enable better project controls, repeatable and standardized
processes, and immediate access to more accurate and timely information.
The promise of a transparent environment to enhance collaboration
is one goal that remains top of mind for owners wanting to achieve
higher success rates, lower costs, and improved project quality. But what
happens when technology is a barrier and not an ally to collaboration?
TABLE OF CONTENTS
Most program management firms can provide their own
project information management system to owners, but
it’s not uncommon for owners managing large capital
programs to work with multiple program managers. If the
owner is not running their own system, technology poses
a new set of risks and challenges including:
2. Choosing the similarities that are the most repetitious
and offer the greatest possibilities for standardization
and continuous improvement; and
•Multiple systems that don’t transfer information to
each other without added resources and costs resulting
in low adoption and collaboration
Multiple systems render the first two components of this
formula cumbersome, inexact and resource intensive.
As a result they are either not done or not done well.
•Data in different and incompatible formats resulting in
poor visibility into program performance
LACK OF TRANSPARENCY
•A recurring need for training and pushing for user
adoption resulting in additional costs and strains on
limited resources.
In a growing trend, owners are taking control of their
information, and making a compelling case for CMs/PMs
to rethink how they can help their clients. There exists a
significant opportunity to resolve these risks, and in the
process improve the quality of projects. Program managers
can lend a wealth of expertise to their clients that can be
transferred to the entire program and not be limited to
single projects.
A LOOK BACK
Historically, CM firms have provided their own system to
their clients. For the owner that is only managing one to
two projects every couple of years, this approach may be
the most effective. However, for serial builders—owners
managing large, ongoing, or multiple capital projects—this
approach can not only create a general lack of consistency
in delivery, but also create new risks. Consistent and
predictable results can be achieved by standardizing on
one system to benefit both the owners and stakeholders.
NO OPPORTUNITY FOR “ROTATION
REPETITION AND REFINEMENT”
Chuck Thomsen, FAIA, FCMAA, outlines the benefits of
process standardization in his book Program Management
2.0 in the chapter on “Rotation Repetition and Refinement.”
The concepts Chuck describes touch on one of the potential
barriers of using multiple systems, the inability for the
owner to efficiently transfer information and workflows
that that have been tried, tested and refined across a
program. Chuck writes:
The 3 Rs require:
1. Analyzing projects in a program to identify the
similarities;
The lack of system standardization makes it difficult
to collect and record information in a way that enables
transparency, an essential requirement to ensure you
are not “flying blind.” An owner working with multiple
CMs, each with their own system, will have to deal with
the added time and expense required to consolidate the
information to get an accurate and timely program view.
Kevin Donnelly, Assistant Commissioner with the New
York Department of Environmental Protection, offers some
perspective. “When you have multiple systems, you can
have a competent CCM doing a great job on a project, but
program wide as an owner you can’t understand where you
are without the added effort.” He adds , “In order to get the
information that you need you have to spend a lot of time
and money building systems on top of systems to get to
information that can be easily transferred or exchanged.”
THE INTEROPERABILITY CHALLENGE
Several reports published in early 2006-2008 on the
issue of interoperability focused on perceived technology
limitations. CMAA contributed to the “Interoperability in
the Construction Industry” report released in 2007. However
these reports described a technology problem, but did not
go into much detail on interoperability issues with people.
The use of multiple systems requires that owners spend
more time training staff and driving adoption of the
systems. No matter how good a system may be, if it’s not
used the promise of collaboration quickly evaporates. Serial
builders move people from project to project within the
same program. If different systems are used resources must
be invested to retrain users continually, and systems with
a steep learning curve will also make this process more
difficult. Donnelly states, “In one project, the CM tried using
one of the well-known Construction Management systems
and the team was not well versed in the software, and the
engineer and contractor were using another software. So as
a result the systems were never fully implemented, there
was limited user acceptance, and there was nominal value
added. If there are too few people using it, then there is less
and less collaboration, which leads to higher costs.”
23 Advisor Fall 2013
•No way to establish business processes that will create
consistent and predictable results
3. Focusing on ways to improve these standards at the
program level.
TABLE OF CONTENTS
OWNER-CENTRIC PROJECT INFORMATION MANAGEMENT
Revise
Initiator
Revision
Revise
Revised
Revise
Start
Submit
Corridor CM
Review
Finish
Approved
Complete
Tollway PM
Review
GC/CM
Confirmation
REMOVING THE TECHNOLOGY BARRIER
THROUGH AN OWNER-DRIVEN SYSTEM
Benefit 1 – Level Playing Field
As more owners take the lead in implementing their own
project information management systems, there are many
benefits to be had not just for the owner, but also the CMs.
In a competitive environment where multiple CMs compete
for different contracts, “when an owner adopts a system,
it sort of levels the playing field for CMs, nobody is at a
disadvantage,” says Donnelly.
Benefit 2 – Visibility for All
Removing the barriers of disparate data sources creates
several advantages for all stakeholders. Using one system to
maintain all project information facilitates access to project
participants. Consultants like this environment because
everyone is on the same page.
24 Advisor Fall 2013
Benefit 3 – Standardized Processes
Different program managers bring a broad spectrum of
expertise. The owner can work with different firms to
develop the project controls, processes, reporting and
documentation systems that will support the program
and ensure its success. These best practices can then be
shared across the program through the use of one system.
David Martinez, Acting Director CIP at the City of Miami
Beach, talks about the importance of standardized
processes. “Like many other public agencies, we have
a multitude of processes, policies and procedures and
Reviewed
CS Manager
Review
Program managers/
construction management
firms can codify their
best practices using the
owner’s PMIS for different
processes (i.e., change
orders), so that these can
be executed across the
entire capital program
to reduce costs and risks.
Approved
in the past we have managed these the traditional,
rudimentary way that bogged us down.” An owner-driven
system enables one set of processes that can be used across
the entire program. These processes can then be continually
enhanced as new lessons are learned. The lessons learned
then can be transferred to all groups, not just a few.
People move to either different projects or to a new
agency. The owner system removes the inefficiencies in
trying to pick up where their predecessor left off. Martinez
adds, “Prior to our implementing e-Builder, if a project
manager would leave, the records and the history of a
particular project were kept in different types of files
making it difficult for us to find. By having one system,
if there’s turnover somebody can step in and with very
little involvement pick up where the last person left off.”
Benefit 4 – Collaboration
The first three benefits combined enable a collaborative
environment that can help owners reduce project
costs and risks while increasing quality. The adoption
of one single, owner-driven PM system means that all
project stakeholders can share project information and
communicate through the system. Problems arising
from missing, incomplete, unavailable, inaccurate, or
outdated information are eliminated.
SUMMARY
Change is not easy, and many owners continue working
through multiple systems. “There is a fear that it’s going to
cost too much” says Donnelly. “But if at the end of the day
it’s going to result in consistency and efficiency through
improved collaboration, project
quality improves and that saves
money” he adds.
Technology is an important
component to a more collaborative
project delivery approach. Adopting
new technology may create new
barriers that could impede any
productivity gains, or risk reductions.
Owners can help themselves and
their program managers work more
collaboratively by standardizing one
system that they control.
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1. Data integrity, process consistency
and required resources (labor) to
maintain it
3. Redundant functions and efforts
when change is required
Scott Perala, senior project manager
with Heery International, says, “For
each additional system you add
to the management process, you
exponentially grow the effort and
cost to maintain an accurate data
set. If you are a public owner who is
giving public reports with multiple
systems, you have to then condense
the information into yet another
system and/or report and hope
that there isn’t a transcription error
somewhere. I would much rather use
a single system to be able to enforce
uniformity, consistency and reliability
across all of the programs.”
You can learn more about the
discovery process and approach
that the New York DEP used to
determine how to align business
process requirements with technology
solutions at the presentation “Master Planning Your Program-wide CM
System” at this year’s CMAA National
Conference in Las Vegas.
Sergio Aranda can be reached at
saranda@e-builder.net.
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25 Advisor Fall 2013
2. Information formatting and
consistency
TABLE OF CONTENTS
FINAL WALKTHRU
CMAA’S NEW
IMPACT LIBRARY
Showcases The Best
of Today’s CM
CMAA’s new online “Impact Library” brings together a portfolio of outstanding recent projects
in which a professional CM made unique and valuable contributions to extraordinary outcomes.
Here are just a few examples. You can see them all—and submit your own projects for
inclusion—at www.cmaanet.org/impact-library.
Mount Nittany Medical Center Lance
and Ellen Shaner Cancer Pavilion
State College, PA
Existing concrete masonry loadbearing walls had to
be removed and a new structural steel framing system
installed, all while maintaining the structural integrity
of the existing structure and new addition above.
Radiation oncology and laboratory suites located
within the existing building.
CM by Alexander Building Company
The Catskill-Delaware Ultraviolet
Light Purification Facility
26 Advisor Fall 2013
Valhalla, NY
This is the largest capacity water treatment plant in
the world, highly complex not only in its technology
and construction processes, but in its size and scale.
“The CM’s successful implantation of CM delivery
methodologies greatly contributed to the success of
the project,” the owner reports.
CM by Malcolm Pirnie/CH2M HILL joint venture
TABLE OF CONTENTS
Los Angeles City College Student Union
Los Angeles, CA
The owner of this complex project comments, “The
Construction Manager helped tackle each of these
complexities with proactive planning and innovative
measures. The CM’s leadership helped incorporate
all of the needs and ideas of the different college
departments and stakeholders into the building
and kept the project organized.”
CM by Harris & Associates
West Hollywood Library
West Hollywood, CA
A signature project with high quality finishes, unique
features and a limited budget challenged the CM to balance
cost against the desired impact of the finished project.
the Los Angeles Times architecture critic commented, “the
library….has managed to navigate the punishing low-bid,
public-sector construction process without sacrificing its
ambition or design personality.”
CM by Heery International
John Wayne Airport Terminal C
One of the largest public works projects in Orange
County, California’s history, Terminal C was built on a landlocked site and faced extensive logical and collaboration
challenges. The owner reports, “Hiring a CM has helped
JWA deliver a completed terminal within a tight timeframe
and $88 million under the program budget.”
CM by ARCADIS-U.S.
27 Advisor Fall 2013
Orange County, CA