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Thursday, 11 October 2012
Choose your Architect/Engineer Team to suit your Project – Strategic Facility Planning for Small and Medium Sized Businesses
Topic: Facility Planning

Author:  Paul Hay - Managing Partner, PAUL HAY Capital Projects

In "To Build, or not to Build", I dealt with the feasibility of undertaking a construction project.  I assume you have completed that activity, and decided to proceed with the project.  Now, you need an architect/engineer team.  A building project actually involves four phases: commencing with planning, through to design, construction, and terminating at the operation and maintenance phase.  On large jobs, separate teams may undertake the planning and design phases, especially where planning requires highly specialised expertise.  However, a single architect/engineer team generally undertakes both stages in smaller jobs.  Even though you may not be billed for planning, do not assume the stage does not exist: design cannot commence without first having determined the project requirements.

In "Consider Image Carefully", I recommended that you be intimately involved in this planning process.  This is especially true if the project is to be particularly complex or innovative.  As the owner, you should initiate the process because there is a better likelihood that you will determine the criteria to judge the selection of an architect/engineer team appropriate for your job.  It is not uncommon for an architect/engineer team to be changed even during the construction stage, so having a firm grasp of what is required from this team will facilitate an appropriate selection, though this is not guaranteed. 

At the very least, you should determine the nature of the project - whether innovative, complex, or routine - and your priorities with regard to cost, time frame and quality of the work.  The reasons will be apparent in shortly.  The selection of an architect/engineer team generally takes two forms: either direct negotiation with a specific team or a process involving the pre-selection of a number of teams, creating a short-list, and then selecting the most appropriate team.  The latter is typically used for large projects, so we assume the former is used: though the selection process to be outlined will be instructive to both.

The Coxe Group Management Consultants (Seattle) surveyed 100 design firms of varying sizes, markets and organizational formats.  They classified these firms by their "technology - what they do best - and, their "values" - the goals of the firm. 

With regard to the former, the Coxe Group identified three categories of firm technologies: the "strong-idea", "strong-service", and "strong-delivery" firms.  A "strong-idea" firm delivers expertise or innovation to unique projects.  It adapts to any project and typically depends on a few outstanding individuals.  A "strong-service" firm delivers experience and reliability particularly on complex projects.  They provide comprehensive service to clients that are actively involved in the process.  A "strong-delivery" firm provides efficient service on similar or routine projects to clients seeking a product, rather than a service.  It repeats successful solutions for technical cost and schedule compliance.

In this case, the nature of the project will indicate the appropriate team.  You need to determine if the project is to be unique, complex, or routine.  Having made this decision, the short-list of technology-oriented firms will be self evident.  Knowledge of the projects undertaken, or physical inspection of these, will be instructive.

Within these technology sets, the Coxe Group determined that the firms have values that are either "practice-centred" or "business-centred".  The practice-centred firms emphasize quality: serving their clientele and satisfactorily representing their discipline.  Business-centred firms are profit oriented.  Therefore, cost and time are emphasized. 

If you prioritize your needs based on quality, cost and time, you can eliminate firms with inappropriate values.  Practice-centred firms can also be judged on knowledge of their previous projects, or physical inspection of these.  Business-centred firms can be judged on their performance on the above.  Discussion with previous project owners will likely be needed for due diligence.  In the case of new firms, this evaluation will have to be done on previous projects by the principals and team members, prior to founding/joining the firm being considered.

You may intuitively realize that "strong-ideas" firms will gravitate towards practice-centred values, while "strong-delivery" firms gravitate to business-centred values.  But, especially small firms may lack focus and not be easily classified; while, highly focused firms will most likely disqualify themselves from discussing your project if it is not compatible.  Nevertheless, this procedure will serve to guide your selection of an appropriate architect/engineer team for your project.  Other than routine projects, the projects evaluated need not be the same but should be similar in nature contemplated: that is, uniqueness and complexity.  The teams' respective performances on the projects evaluated with regard to quality, price and time should then be compatible with the manner you expect your project to be handled.    It should now be apparent that when you choose particularly an architect based solely on work you may have seen, without thought to the performance on that job, you will likely end up with a practice-centred, strong-ideas firm, which may not be suitable for your project.  So, you need to consider both, and choose an architect/engineer team to suit your project.


Posted by phcjam at 6:37 PM EDT
Updated: Thursday, 11 October 2012 6:59 PM EDT
Thursday, 21 June 2012
To Build, or not to Build? – Strategic Facility Planning for Small and Medium Sized Businesses
Topic: Facility Planning

Author:  Paul Hay – Managing Partner, PAUL HAY Capital Projects


As I pondered upon my next blog post, I realized that I had not dealt with a fundamental question: whether to build, or not to build.  The first two posts dealt with the issue of image: the first warns about improper motives to build, and the second on creating an image that suits your business.  But, do you really need to build at all?  That is the question.


As has become customary, two cases are presented; one good, and one bad.  Both preceed the turn of the century: a very trying time in Jamaica.  In his book Jamaica Meltdown: Indigeneous Financial Sector Crash 1996, Wilbern Persaud stated that “Jamaica’s indigeneous financial sector crash was, to date, … estimated by the World Bank review of forty-two banking crises to be third”.  Our first blog post, “Consider Image Carefully – Strategic Facility Planning for Small and Medium-Sized Businesses”, described one failed financial entity as an example of poor strategic facility planning.  In this post, we examine one of its subsidiaries, a banking group, as  a good example in deciding not to build.


But we shall start with a case from Persaud’s book, another banking group, as the poor example which decided to build.  As Persaud states: “… at the height of the euphoric credit and real estate boom” this group “embarked on construction of a set of luxury apartments“ in an upscale community billed as “Kingston’s soon-to-be most prestigious address”.  The venture generated much interest, but the boom and accompanying inflation led to ever escalating costs.  To salvage the project, it was redesigned to become a hotel: thus taking advantage of the government’s tax incentive to the tourism sector, at the time.  As a business-type hotel, the venture was doomed to failure: it was too far from Kingston’s business district, too far from other facilities associated with the tourist trade, and in a local plagued with traffic congestion.  So after a relatively short period, the hotel did fail and was subsequently converted to apartments, under different owners.


By comparison, our other banking group owned a multistory building that was originally designed and constructed as apartments but later converted to government offices: though little refurbishing works seem to have been done.  This group also considered converting their building to a hotel.  But, it had all the advantages the former lacked.  It was in the heart of Kingston’s business district, between three successful hotels.  It was anticipated that at the very least the hotel could take referrals from the adjacent hotels.  So, a feasibility study was commissioned.


The consultants of the parent company were commissioned to undertake this feasibility study.  It was fortuitous that the same consultants had also been responsible for the construction of the building they were to examine.  After careful study of the cost for the conversion, against demolition and rebuilding the building, the banking group wisely decided to sell it.  It was sold to another established hotel also located in the area, though some distance from the site.  They were the ones to refurbish the building.  They sold their original premises and relocated to this new location and continue to operate from the location today.


The building was not in the core competence of the banking group.  It was in the core competence of its new owners.  It is not certain whether the new owners did any studies of their own, but the bank would have pitched it to them as being appropriate for a hotel.  Whenever a building project is contemplated, this should always be considered as any other investment: the options need to be considered, evaluated, and compared to determine the likely outcomes.  If this banking group can be criticized on any aspect of the sale, it would be that they failed to consider what could have happened when the hotel relocated.  The original hotel was located opposite one of the bank’s major branches.  When they relocated, a major competitor bought the land, demolished the hotel, and constructed a new facility on the site.  This competitor was previously engaged in putting up a new branch in the resort city of Montego Bay, but when the opportunity presented itself, they suspended the design of that building and seemed to have concentrated their effort on this new venture.  Who could have envisioned such a scenario?  

Posted by phcjam at 10:36 PM EDT
Updated: Friday, 12 October 2012 4:19 PM EDT
Friday, 4 May 2012
Image that matters - Strategic Facility Planning for Small and Medium Sized Businesses
Topic: Facility Planning

Author:  Paul Hay - Managing Partner, PAUL HAY Capital Projects


While studying at the University of California, Berkeley, we as architecture undergrads would jokingly remark that "there's no place ‘worster' than Wurster".  We were referring to the building in which our school was located: which was called Wurster Hall.  This should not be inferred that the building was poorly designed.  On the contrary, I recall the lecturers expounding on its design and construction attributes.  We just did not like the image.  We did not like being trained in a building we considered the ugliest on campus.  It was bad for our image.  But, one lecturer explained that the building was specifically designed not to influence our creativity.


Recently, I came across an article in The Globe and Mail entitled "For Google, the Office is Key to Worker Success".  In the article, Canadian-born Google executive, David Radcliffe, was interviewed regarding his role of locating urban spaces that would become "hip headquarters and design them to spark creativity, play and collaboration".  He described this as "Googlïness" - creating environments that support culture, transparency and collaboration: facilities which allow staff to excel.  In other words, Google wants their building to stimulate creativity.


So, which of the two seemingly contrasting philosophies is correct?  It should be realized that the administration of the School of Environmental Design also wanted their staff and students to excel: they just did not want the building influencing their designs.  They did not want any aspect of the building's design reproduced or be held as the standard to which others would be judged.  This is understandable.  So, the appropriate image for any organization really depends on the objectives it seeks to achieve.


Strategic facility planning involves four steps: understanding the values and goals of an organization, analyzing its long-term objectives, planning for its long-term needs, and acting on the plans.  The mission, vision, firm culture, and possibly balanced scorecard, of an organization first need to be understood.  Organizations in creative industries, for example, prefer flexible organization structures, such as organic or matrix organization structures.  So, an institutional look and feel, as well as heavily enclosed office spaces would be inappropriate.  But, the needs of all stakeholders should be understood.  The need of architecture students to have a building they are proud of and one which impacts positively on their self-image is also important.  Our choice of motor vehicles is not only for their functionality but also intangibles, as prestige and ‘sex-appeal'.  Why should we expect any difference in our choice of buildings?


Analysis can utilize SWOT analysis, scenario planning, brainstorming, etc.  An organization's mission or vision may span over the five year limit of a strategic facility plan.  And, it is unwise to create unrealistic expectations in our stakeholders.  So, long-term objectives need to be SMART.  At this point, it will be apparent whether the organization's image needs to be addressed at all.  In the service industry, for example, an organization's tangible assets are used to assess the quality of its service.  Image could be critical, especially if their building is inferior to their competitors'. 


The selection of an appropriate architect and/or interior designer will be critical in establishing a design team to execute the plans.   Vision likely translates to a marketing plan which will guide the selection of an image.  Marketing plans will, no doubt, be innovative, imaginative and resourceful.  They will detail the use of an organization's effort and resources towards a desired end.  Do not entrust your image to a team you have not communicated your vision.  It has been my experience in the Caribbean that only banks, embassies, hotels and hospitals provide this guidance.  I assume the design team creates the image for the others, and I doubt they are carefully selected to deliver on the required objectives either.  The image presented by an organization will be present for decades, it should not be left to the discretion of anyone who may not understand their client, nor follow any rigor in analyzing their objectives and plan for their long-term needs.    Where image matters, it should not be left to chance.

Posted by phcjam at 6:30 PM EDT
Updated: Thursday, 10 May 2012 9:59 AM EDT
Wednesday, 25 April 2012
Consider Image Carefully – Strategic Facility Planning for Small and Medium Sized Businesses
Topic: Facility Planning

Author:  Paul Hay – Managing Partner, PAUL HAY Capital Projects


In 1993, I had been offered a position in one of the Caribbean’s largest architectural firms; but two things bothered me.  First, they had made their first offer prior my becoming a project coordinator in the Jamaican Government service; and this was rescinded shortly after, because the construction industry had contracted.  Secondly, I intuitively knew that the number facilities being constructed at the time by financial institutions, was not sustainable.  Unknowingly, my environmental scanning had rightly detected a threat to the construction industry, and my prospective job.  Referring to the period, Economist Wilberne Persaud described businesses as being “driven more by ego than economics”.  What would later transpire is an example of what can happen when image precedes good business sense.


Despite the perceived risk, I accepted the offer.  The largest project in the office was a building for a large financial institution, perhaps the firm’s largest client.  I was informed that the building was never designed for the current site, but the client had changed the site prior to completion of the drawings.  Then, a director met a town planning official at a cricket match, and was assured that approval could be given for two additional floors.  So, the director, without analysis, gave instructions for the architects to add them.   The design was revised and building constructed.  Shortly after completion, the building and the institution’s financial assets were sold to other financial institutions.


This case study of a big business, serves to illustrate the risk of making real estate decisions without reference to your strategic objectives, because facility planning is an important business decision that needs to precede image.  According to the International Facility Management Institute:

A strategic facility plan is a  … two –to-five year facilities plan encompassing an entire portfolio of owned and/or leased space that sets strategic facility goals based on the organization’s strategic business objectives.  The strategic facilities goals, in turn, determine short-term tactical plans, including prioritization of, and funding for annual facility related projects.

Every decision made in business planning has a direct impact on an organization’s real estate assets and needs.  Strategic facility planning involves four steps: understanding the values and goals of an organization; analyzing its long-term objectives; planning short-term  measures to achieve them; and finally, implementing them.  Long-term needs should be reviewed annually, or earlier if necessary.  Our financial institution got caught up in what Persaud called an ‘edifice complex’.  So when the real estate market collapsed, so did they.


Let us look at a good example of strategic planning.  This example is a 500-seat church not far from the building previously referred to.  In 1999, I was engaged as project manager for the construction of a multi-purpose building to be attached to the church.  Subsequently, I was asked to head their building committee.  We understood that there were three major problems linked to the church’s rapidly expanding congregation: the need for more space for Sunday services, Sunday school, and parking.  An alternate site was sought.  Owners of the adjacent property were not interested in selling, but a government office beside them were.


The church called all committees to participate in a SWOT analysis.  Subsequently, we prepared seven long-term objectives summarized by the acronym “PERFECT”: the “F” standing for the facility objectives.  Next, each committee planned how to meet the objectives. The building committee proposed that the existing property be used for the Sunday school and youth ministry; the government office converted for Sunday services; and, the owners of the lot between re-approached for sale of the property to be used for additional parking.  The government office was purchased and converting to a 2,000-seat auditorium.  The original church used as proposed, and owners of the adjoining lot finally agreed to sell their property; but, it will be converted to training facilities: which, by that time, had outgrown the multi-purpose building.  All this took 14 years and is ongoing.


Let us end by considering what happened to the architectural firm.  When businesses fail, especially large businesses, their stakeholders are negatively impacted.   The architectural firm had to downsize, making most of its staff redundant.  Strategic facility planning was needed to determine how their facility could achieve a commensurate reduction in overheads, such as electricity to power lighting and air-conditioning.  As for me, that which I feared had come upon me.  I was made redundant.  However, the multi-purpose building was one of my first projects as a new business; and, the path was charted for provision of strategic facility planning services.

Posted by phcjam at 7:36 PM EDT
Updated: Wednesday, 25 April 2012 7:38 PM EDT

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