Formerly an Assistant Director of Design and Construction at UHS of Delaware, Inc. (a subsidiary of Universal Health Services), Christian Pikel championed integrated project delivery methods, including development of a master partner agreement to meet project challenges and drive collaboration. Considered a serial builder, UHS spends about $450 to $500 million in capital on growth and renovation projects annually. After an eight-year learning journey, Pikel and the organization’s strategy of building ownership and project outcomes is bearing fruit. He spoke with DesignIntelligence about their new approach.
DesignIntelligence: What drove UHS to implement a new system for your design and construction projects?
Christian Pikel: We were seeing a lot of challenges on projects such as going over budget, falling behind schedule, and frankly, not getting what we wanted in terms of the value of building. After eight years of learning, we developed a master integrated project delivery agreement with more than 80 signatory partners across the country. For individual projects, partners will be selected from those that are already signed up to that agreement, with local companies to fill in the gaps. If there are no partners in that area, we try to integrate the existing master agreement signatories and the local new trades we bring into the team under one project authorization so everyone is tied to a single outcome with fiscal reward sharing.
DI: How do you bring projects to funding and execution?
CP: It’s a fairly simple process where we try to build ownership for the final project outcome from day one of initial (validation) funding availability. Internal resources determine as much as possible of the project’s program and cost using benchmark information to give anticipated limits. The next step is a pre-validation process to determine if it’s a viable investment based on the expected return. Once released to validation, we get as many of the ultimate IDP signatories as possible to the agreement early and make that team responsible for validating not just the big picture scope of the project, but also the risks and the costs. That team takes the responsibility of putting together the final funding presentation to be presented to the corporate office for project approval.
DI: Is it possible to prove the efficiencies based on this integrated approach?
CP: We began to collect data in terms of time and building quality, along with the impact on the number of issues, rework and warranty. Here’s how we used the results of the data: There was a team working on their first project with the company. The construction schedule was 16 months, and they were trying to get that down to 14 months through their traditional scheduling and planning mechanisms. From the data, we showed them how we finished a project of comparable size in nine months. That information could help them improve their planning mechanisms to get their schedule closer to a nine or ten-month margin. Intuitively, bringing a schedule from 16 months to 10 months will translate into cost savings just from the reduced amount of work time. We were also recently able to construct a 240,000 square foot hospital in about 13 months; from the first project team member interview to seeing the first patient was a timespan of only two and a half years.
DI: What advice would you give to architects, engineers or even construction companies who want to influence their clients to consider a more integrated approach?
CP: Begin within your sphere of influence. Even if there’s not a collaborative agreement in place for the project as a whole, we can still follow some of these practices and use some of these tools within the group of people we can influence. In this way, we can approach the project more collaboratively. The project architect could reach out to a project contractor to get an opinion. That contractor, even if there’s no contractual requirement to do it, will probably be overjoyed to provide some input from a constructability point of view. Start to collaborate when possible, then pay attention to the benefits and outcomes. Bringing those benefits and outcomes to the client’s attention could have an impact.
DI: How can we counter beliefs and practices that keep people stuck in design-bid-build and other traditional forms of delivery?
CP: Part of it is demonstrating the value proposition to those who are stuck, but we must remember that everyone is different. Not everyone will feel comfortable or want to work in a collaborative environment. If you feel a personal connection to someone who is stuck in a traditional way of delivering projects, but he or she has the kind of personality that could be conducive to working in a more collaborative way, then invest some time to cultivate that. It begins by leading with the example of how we want others to behave. If we engage them in a trustworthy manner and they respond positively, then we can reinforce that behavior and encourage more learning around it. The flip side is understanding when personalities are not going to be the right fit so that we don’t expend the energy.
DI: Would this kind of approach require different skill sets in your team than you might typically find?
CP: It does require different skill sets within the team and among the team leaders that, frankly, we should look at developing even before we get the project teams in place. In an industry where many people come from a technical or engineering background, the softer people skills and psychological skills are underrepresented. It has been a personal journey for me as well in terms of the tools I need to develop to be an effective team leader and help my team delve into psychology and interpersonal dynamics.
DI: Do you think the kind of approaches you’ve had success with would translate well to a different kind of owner all together, such as a developer who plans to flip the building within five years?
CP: Yes. In that example, the developer would have a different set of values to express to the team based on what’s best for them. The team in that scenario may be working toward lowering costs. There may also be a focus on what makes the building more valuable to the person who’s going to sell it in four or five years. If there are some design elements in a particular market that the team discovers and the developers know will allow them to more quickly fill the building, then that gives them a quicker return on their investment. It is possible to engage the team in discovering the best set of solutions to really optimize value. We’ve seen the benefits of collaborative project delivery across the board, and we will continue this journey in hopes that it is useful information to be shared with others.
Christian Pikel is managing principal and lead IPD/Lean coach for The ReAlignment Group, Ltd. In this new role started earlier this year, he brings his hands-on experience leading integrated lean project teams to bear in coaching organizations and teams who are looking for transformative change in their behavior and project delivery for improved outcomes.
Excerpted from DesignIntelligence Quarterly.