Worth Watching

April 1, 2011

2011 and we all seem to be turning the corner – a little at least! The American Institute of Architects (AIA) monthly billings index is acting like a motor having a hard time getting started – chug…chug..chug.chug…cough…chug…Most recently, down a little again. The AIA, according to AIA chief economist Kermit Baker has been and will continue to “take a cautiously optimistic approach”. I agree; no reason to change that outlook. 

Why is this index worth watching? I believe it has a lot to say about how optimistically the sponsors in the economy feel about the future. Sponsors referring to those that pay for new buildings, not those who design and construct them. If sponsors are confident about the future and where the economy is headed, they will initiate new work with architects. The AIA billings index tracks these inquiries and historically, inquiries have been a good indicator of billings. Billings are obviously a leading indicator of future construction spend, and so it goes.

 At IRVINE, we are fortunate to be active in markets across the country so we not only read various indexes, we have opportunity to touch first-hand the pulse of design and construction professionals throughout the country. Different markets demonstrate differing enthusiasm but as a whole, professionals feel (slightly) better than they generally have for the past 2 years with regards to future prospects. There are certainly significant disruptions within this general elevation of confidence as more than 1 firm I respect has just recently suffered significant forced reductions in staff levels due to work stoppages. This is a very hard adjustment to make and even more difficult to recover and rebuild from. I wish them the best, and continue to believe that they as well will begin to improve their outlooks

On the whole, “cautiously optimistic” about sums it up all around.

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Now That’s COLD!

August 11, 2010

Those of you who follow TED no doubt shivered while watching Lewis Pugh’s presentation on his cold-water swim in Mt. Everest’s Lake Imja. For those of you who are currently sweltering and want to cool down, go to TED.com. Enjoy.

 

As a former big-mountain climber myself, I related to the shift in thinking it required for Mr. Pugh to be successful in a strange and hostile environment with something he was expert at in more familiar surroundings. I’ve been there and know the intense commitment one must make to learn anew how to behave in a strange environment. Old behaviors and expectations are not only insufficient, they can be downright destructive, or as in Mr. Pugh’s case, almost fatal. A harsh school.

Here on earth (or at least back at sea level); old behaviors, rigid practices and expectations that are not aligned with reality can be equally as destructive (in some cases at least, they can also be fatal to ones career). How often then, do we all ask ourselves if our reality has changed and should new behaviors be learned?  As Mr. Pugh learned, we often overlook the most basic aspects of our environment and instead maintain a rigorous commitment to our past behaviors (after all, we’re good at them). How often do we only realize after it’s too late that we should have looked around before we jumped in and recognized that we were no longer at sea level?

We all know the world has changed dramatically in the last few years. Are we being as quick to recognize that in addition, we may also no longer be at sea level?

PyllarView: Co-Founder’s View Point

June 11, 2010
 
 
What is the most compelling approach to integrate technology into healthcare facility strategy? How should healthcare facilities strike the balance between technology’s conflicting areas of impact? On the one hand; game-changing technologies offer unprecedented opportunities to hospitals for new service lines and revenue sources, but these same technologies (like tele-health), will challenge traditional approaches to facility planning.
 
Pyllar Group is focused on the strategic questions that will drive better decisions:
  • What impact will the emergence of consumerism have? Riding the back-bone of new technologies, a substantially more patient-centric delivery model will be demanded to replace the current provider oriented culture. E-mail, Tele-health, EMR and ePrescriptions will all contribute to the shift.
  • What will be the impact of competition for scarce resources between “sticks and bricks” and technologies such as medical miniaturization, tetherless medical tools for in vivo diagnostics and therapeutics, robotic surgery, remote patient monitoring, etc?
  • What role will hospitals play in the competition with pharmaceutical companies for service lines related to genetic diagnosis, testing and therapy? Will hospital labs emerge as the new service line of the next decade?
  • Will Walmart sell healthcare? Experiments with mini-clinics and other iterations may indicate that consumers want to get their healthcare where it is most convenient and most affordable. 
     
    In the 1980s when powerful new imaging tools allowed physicians to detach large amounts of diagnostic and therapeutic work from hospitals and move it to sites they controlled, hospital admissions and lengths of stay were both reduced. Hospitals responded by incorporating new ambulatory services and aggressively pursuing both on-campus and off-campus strategies in pursuit of these services. Ambulatory services, which accounted for only 13% of hospital spending in 1980, grew to represent more than 37% by 2002. Inpatient services fell more than 20% and new ambulatory services became the hospitals most rapidly growing service.1 
     
    Hospitals are again challenged to shift their models.

  1- American Hospital Association, Hospital Statistics 2003 (Chicago: AHA,   December 2003)

 Further reading that may be of interest…
 
Starchitecture Helps Heal Cancer Patients

TEDMED – Eric Topol: The wireless future of medicine

Getting Hospitalized Should Be Like Flying First-Class

Toward a Miniaturized Mechanical Surgeon

Disruptive Changes Are Coming to the Delivery of Medical Care

Point of View

April 12, 2010

How much difference does a slight change in one’s point of view make in altering what one sees?

Felice Varini, a remarkable artist from Switzerland provides a dynamic illustration of the power of a focused point of view. His work illustrates the March 2010 issue of the Harvard Business Review (www.hbr.org) and is used to bring into focus the power of alignment.

Seen from exactly one point and one point only, all geometric designs in Mr. Varini’s work align and form the shapes intended. Concentric or overlapping circles, triangles, bold geometric shapes all perfectly formed and recognizable. Step a mere one foot forward or backward, right or left, and the alignments disappear to be replaced by seemingly random segments of disconnected shapes. 

How similar this is to a project goal. A single point of view is powerful when used to align actions towards a shared goal. But how often do all team members actually stand in the same place and look in the same direction? A slight divergence in point of vies, focus or direction, or merely being in a different place when viewing the goal, can remarkably alter the understanding of the goal, and the actions undertaken in pursuit of that goal.

What risk is brought to a project when all team member actions are not focused on a common goal?

Point of view. Powerful when shared, dangerous when not.

Reflecting on the first FUTURES FORUM: The Form of Things to Come

May 18, 2009

Reflecting on the first  Futures Forum: The Form of Things to Come (www.future-re.com), at which a small number of powerful executives who are collectively charged with writing the checks for billions of dollars in new design and construction projects considered provocative and important issues related to the future of building.

butterfly

The commercial design and construction industry with its $700B of annual spend (equal to three times the size of the US automobile manufacturing industry) is a significant driver of the US economy. The industry directly employs some 3-400,000 architects, engineers and consultants along with approximately 10M building contractors and trade workers.  But are all these man hours directed toward the best outcomes?

The Futures Forum participants are decision makers who will hire tens of thousands of these architects, consultants and contractors who will create millions of square feet of new environments to support learning, working, living, research and healing.. Collectively, they represent significant heft in the industry and their thinking mirrors concerns shared by others throughout the industry: how to align what gets built with the mission of their organization.

Buildings take years to design and build. Think back to what was happening 3 or 4 years ago. How much has changed? According to the Associated General Contractors (AGC), the cost of construction materials rose at twice the rate of the CPI (32% vs 15%) between 2004 and 2008 as the country embraced one of the most robust building booms since the end of World War II.

How much has changed in the last 6 months?  We’ve gone the other direction. Credit markets have frozen, GDP has dropped by 9.3% (1). Unemployment has risen to 8.5% (2). What’s next? The coming 12-18 months, according to the AGC,will see increased volatility in the availability of materials, higher price spikes, transport bottlenecks, fuel price swings and increasingly uncertain costs. The AGC goes further to project Producer Price Index increases of at least 6-8% for the industry and an increase in construction labor costs of 3-4%. How does one manage investment in long duration projects amongst so much uncertainty?  Data: (1) Bureau of Economic Analysis (2) Federal Reserve, Bureau of Labor Statistics

The small group of powerful executives who participated in the Futures Forum share one fundamental concern: They are about to spend billions on buildings that will not be optimized around what they need when they are completed. They believe that current processes and practices will result in as much as 25% of their investment being totally wasted. They will to a great extent, build the wrong buildings. Tens of billions of wasted investment.

Their fundamental issues do not center on the transparency of pricing or the integration of new technologies like BIM. They looked much farther to ask: How often do we spend years designing and building a solution to a problem that’s no longer a problem? How often do we invest heavily around the viewpoints of key stakeholders, only to find they’ve moved on and a new set of stakeholders now exists to inherit the previous vision?

How often do we design to accommodate a set of criteria only to see it change once, twice or three times before the process has been completed?

In the healthcare industry, hospital administrative teams can turn over completely every 2-3 years. Doctors can turn over more often that that. For the typical 4 year, $200M new hospital, this can mean that the team of doctors, hospital staff and administrators that provided design guidance at the front end of a project has turned over not once but twice before the completed building is moved into. New perspectives, new viewpoints, new requirements imposed on the project. Healthcare technology is changing even faster, and just as profoundly.

 The healthcare industry is not alone. All industry segments engaged in the design and construction of facilities are exposed to the same uncertainties and the same volatile market dynamics. Higher Education is searching for more public/private sector collaboration and greater employment of mixed use building models. Office user/builders, long considered the most adept at developing efficient buildings are searching hard for new strategies to squeeze even more value and integration from the design and construction process. All industries are dealing with the increasing pace of technology development and deployment and the corresponding impact it has on buildings. Buildings can simply no longer be designed around specific technologies –they change too fast. 

How can processes deal with such a dynamic and changing landscape and how can they be re-envisioned to align more fundamentally with usable outcomes? What has to change?

The Futures Forum will continue to engage thoughtful leaders to rethink these provocative and important questions.

It’s time to ask “Why?”

March 27, 2009

bubble-heads-blog-1r1

I can’t help but be struck by the fact that the bubble over one guy’s head is seldom the same as the bubble over the next guy’s head. What is each really thinking? Are they aligned? Do they both share the same viewpoint?

Let’s think about this in a project sense; does the fact that two guys see things differently mean that the building won’t get built? Probably not. But, does this scenario serve the best interests of the project? I’d argue definitely not.


One guy focused on one outcome, thinking one way, and the other focused on something else entirely. If they are not aligned, are they both pushing in the same direction? And is that direction aligned with the goals of the project? And what happens when we’re talking about a lot more than just two guys? How can a project process be solvent if the understandings and objectives of the participants are not aligned and working together?


For the past decade, I’ve been involved in complex construction projects that all began with ideas and ended with large buildings. Hundreds of people were involved: project committees, engineers, Boards of Trustees, architects, contractors, sub-contractors. The assumption always was that everyone was thinking the same thoughts when it came to the outcome (the Building) and the way they were going to get there.


After experiencing the good and the not-so-good of the processes followed and observing the drawbacks of the way it has been done, I have become a believer that the entire process of the design and construction of major buildings should be re-thought, and that the ultimate outcome of rethinking the process will make for much better buildings in the future.


When the bubble in one guy’s head says, “I’ve always done it this way and therefore I know just where I’m going” and the bubble in the other guy’s head says, “do I really need all this?” then, the ultimate outcome is at risk… Great “design” that does not function well or costs too much, “low-cost” solutions that don’t perform or have no heart and soul–the landscape is cluttered with missed opportunities from all perspectives.



The biggest issue in this time of increasingly scarce resources is surely: can we continue to afford to utilize a process that is this broken?


board meeting

These are the questions we all should ask:


1. Are all players on my project aligned in their objectives?


2. Around whose perspective is my project being optimized?


3. Have we included elements or inputs that are not helpful?


And finally; why is this acceptable? Is there a better way?


It’s time to rethink our industry’s thinking on these mission-critical issues…