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Never Waste a Crisis

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Charles Dickens had it right: this is the worst of times, but also the best of times. The effects of the current economic crisis have been sudden, broad and deep. Construction financing is as scarce as hens’ teeth, and many projects have been put on hold or cancelled outright as a result. Design firms across the country are facing rapidly diminishing backlogs and scant prospects for new work. Collecting fees has become more difficult. The first round of layoffs predictably affected primarily younger staff, but now the staff cuts are beginning to reach into the senior levels. Before the recession ends (do we still call it that?), a wave of consolidation will likely sweep the industry: mergers, acquisitions, and perhaps more than a few bankruptcies. One thing is clear: we know that the widespread prosperity of 2003-2007 (when the stock market reached an all-time high) cannot return to “normal” because it was built on false premises: loose lending practices, exotic investment derivatives that not even Wall St. experts fully understood, huge deficit spending by Congress, and in some high profile cases, outright large-scale fraud. Those conditions cannot be repeated, nor would we wish them to. Instead, the time has come to examine the lessons learned, clean up the mess, and re-tool. A sustainable future can only be built on a sound economic foundation.

While it might sound counter-intuitive, this is a period of unprecedented opportunity for savvy design firms. Clients will be looking to save money, both on capital cost and operational cost, and to find ways of getting more productive use out of the space that they already own. They will not tolerate sloppy design or inefficient practices. Those who are building will be looking for ways to speed up the process, build wisely, and eliminate waste. Best-of-class firms will respond accordingly. Fortunately, there are three compelling value propositions that the design profession can bring to the table: BIM, IPD, and green design.

Over the past several years, the imperative to embrace sustainable design has clearly passed the tipping point in the mind of the public. More importantly, it has also been embraced by the business community. Some of the smartest firms on the planet (such as Kleiner Perkins in Silicon Valley) have recognized the potential of an emerging market in “green tech.” They see huge opportunities and big profits ahead. With the equity and real estate markets in a steep decline, investors will be looking for growth in other areas, and green technology can provide it. Expect an explosion of innovation in the coming years. Because each dollar of energy cost saved goes right to the bottom line, much of this new technology will be “self funded.”

BIM is another idea whose time has come. It’s more than a clever piece of software; it has the potential to actually change the “sociology” of design-the fundamental way that individuals and teams deal with one another during the course of a project. By providing a common place to store information, by providing a platform for “multiple authorship,” and by providing for the transparent sharing of information that bridges the traditional professional silos, BIM has the potential not only to greatly enhance overall design quality, but to control budgets and schedules in the bargain. With BIM, the old saw of “time, money, quality…pick any two!” no longer holds. Clients want all three, all the time, and with BIM, designers can deliver the goods.

The third important innovation is IPD, or Integrated Project Delivery. This is not a warmed-over version of fast-track or design-build; it is a fundamentally different way of engaging the Owner, Architect, and Construction Manager to work together collaboratively in producing a project. It takes better advantage of all the brains at the table, aligning the disparate interests with the mantra that “we all work for the project.” IPD has the potential to reduce or eliminate much of the repetition and waste that is endemic to the design and construction process. Imagine, for example, building without the need for bidding, shop drawings, or submittals. In an economy that spends better than $1 trillion per year on construction, gaining efficiencies of only 10% (well within reach), will produce $100 billion in savings each year, which is triple the amount paid in architectural fees. Think about it.

The good news is that all three of these process innovations are readily available. The bad news is that it seems we have to be in crisis mode before we’re brave enough to take full advantage of them. By nature, architects are pretty good at inflicting change on others, but remarkably reluctant to embrace change in their own profession. The current crisis has brought its share of hardship, but it also presents an unprecedented opportunity. In today’s economy, design firms either re-tool or they risk going belly up.

by Scott Simpson , 2009

Published with permission of Design Intelligence

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