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page 6The End

of Project Syndrome

INSIDE:page 16

The Productivity Gap In

Construction

Issue 4July/August 2015

The IPI awards issueThe best of the best when it comes to collaboration

Delivering dynamic projects through trust, collaboration and partnership.

www.henselphelps.com

Wor l d-C l as s Inno v a t o r s . L andmar k Bu i l d ings . Insp i r ing Pe r f o r mance .

www.partneringinstitute.org July/August 2015 Partnering Magazine 3

INTERNATIONAL PARTNERING INSTITUTEIPI is a non-profit 501(c) 3 charitable organization that is funded by our members and supporters who wish to change the culture of construction from combative to collaborative.

Phone: (925) 447-9100

BOARD OF ADVISORSLarry Anderson, Anderson PartneringPierre Bigras, PG&E Roddy Boggus, Parsons BrinckerhoffPat Crosby, The Crosby GroupPete Davos, DeSilva Gates ConstructionLarry Eisenberg, Ovus Partners 360Steve Francis, C.C. Myers, Inc.Michael Ghilotti, Ghilotti Bros, Inc.Richard Grabinski, Flatiron West, Inc.Randy Iwasaki, Contra Costa Trans. AuthorityJeanne Kuttel, CA Dept. of Water ResourcesMark Leja, Caltrans (Retired)John Martin, San Francisco International AirportPete Matheson, Granite Construction Geoff Neumayr, San Francisco International AirportJim Pappas, Hensel Phelps Construction Co.Zigmund Rubel, AditazzIvar Satero, San Francisco International AirportStuart Seiden, County of FresnoThomas Taylor, Webcor BuildersDavid Thorman, CA Div. of the State Architect, Ret.John Thorsson, NCC Construction Sverige ABLen Vetrone, Skanska USA Building

EXECUTIVE DIRECTORRob Reaugh, MDR

ASSISTANT DIRECTORDana Paz

FOUNDER & CEOSue Dyer, MBA, MIPI, MDRF

EDITORIAL OFFICE: SUBSCRIPTIONS/INFORMATIONInternational Partnering Institute 291 McLeod StreetLivermore, CA 94559Phone: (925) 447-9100 Email: [email protected]

DESIGN/CREATIVEMichelle Vejby Email: [email protected]

COPYRIGHTPartnering Magazine is published by the International Partnering Institute, 291 McLeod Street, Livermore, CA 94550. Six bi-monthly issues are published annually. Contents copyright 2014 International Partnering Institute, all rights reserved. Subscription rates for non-members, $75 for six electronic issues. Hard copy issues are available only to IPI members. Additional member subscriptions are $75 each for six issues. Postmaster please send address changes to IPI, 291 McLeod Street, Livermore, CA 94550.

IN THIS ISSUE

4Executive Director’s ReportFocus on rewarding behavioral change as a way to achieve your objectives.

20Best PracticesIPI Meta-Analysis Part III: The significance of the elements of Partnering and how they relate to one another.

CONTENTS

FeaturesJuly/August 2015 The IPI Awards Issue

Facilitator’s CornerAs your project comes to a

close, be aware of items that

have the potential to dismantle

your Partnering efforts.

6

Research RoundupThe construction industry has

lost productivity points since

the 1960s—what can we do

about it?

16

Partnering AwardsIPI recognizes the best of the best

when it comes to collaboration

in construction—congratulations

to our 2015 Partnering Award

Winners!

8

Cover photo: the IPI Partnering Awards Ceremony, held May 14, 2015 at the SFO International Airport Museum. Photography by Brian Wong Photography

Delivering dynamic projects through trust, collaboration and partnership.

www.henselphelps.com

Wor l d-C l as s Inno v a t o r s . L andmar k Bu i l d ings . Insp i r ing Pe r f o r mance .

4 Partnering Magazine July/August 2015 www.partneringinstitute.org

EXECUTIVE DIRECTOR’S

REPORT

StayFocused

generally on the rise, and the fastest

growing segment is in “programs to

motivate specific behaviors” (up 16%

since 2008). That being said, we have

a long way to go. Awards programs

focused on “supporting a culture

change” are used by only 18% of

respondents to the survey. It is not yet

a norm for organizations to develop

an awards program that is tied to a

specific cultural change initiative like

Partnering.

The good news is that if your

organization would like to develop

a recognition program focused on

developing collaborative teams, there

are a number of IPI-Member Owners

who can share best practices from their

own organization-wide Partnering

Awards Programs. The most mature

examples of internal recognition

programs come from Departments

of Transportation. Caltrans holds an

annual Excellence in Partnering Awards

Program, which honors outstanding

project teams from each of Caltrans’

12 Districts who have successfully

implemented partnering tools. Since

2012, the projects have saved more

than $121 million from the engineer’s

estimates—an astounding total for

hard bid contracts! Caltrans also has

an innovative District-wide Awards

program for projects that are ongoing,

called the Success in Motion Awards.

Most construction projects take years to

build—so developing ways to recognize

outstanding partnering practice is a

great way to support the ongoing push

Rob Reaugh, MDR

IPI Executive Director

I’m often reminded by one of my

mentors to continually focus on the

end-game. As we are developing

new committees, educational

materials, and resources, I hear a little

voice in my ear reminding me...“Rob,

focus on the objectives!”

International Partnering Institute was

launched with the mission to change the

culture of construction from combative

to collaborative. After 30 years of

experience with partnering, we have

learned that behavior change is easier

when we use carrots rather than sticks.

In other words, recognition programs

that reward behavior change are the best

way to serve our objective of making

Collaborative Partnering the norm in

the industry. This issue of Partnering

Magazine focuses on our IPI Award

Winners and the organizations who have

championed Collaborative Partnering

over the past year.

According to a 2013 study called

“Trends in Employee Recognition” by

World at Work, awards programs are

for collaborative culture change within

your organization.

Other DOT’s with Partnering

recognition programs include the

Arizona Transportation Partnering

Excellence Awards, which have

been held by the Arizona DOT in

conjunction with contractors and other

organizations since 2005; the three year

old Ohio DOT Don Conoway Awards; the

Maryland State Highway Administration

Partnering Award which was launched

in 2000; and the Nevada DOT Excellence

in Partnering Award, which was

launched in 2009. Each of these

Partnering Awards Programs require

an application and are reviewed by

a panel of judges. The winners are

revealed in a formal setting and the

project team members are recognized

by executive leadership from the

organization, which is crucial.

Long story short—if you are a part

of the partnering movement and want

to take your partnering program to

the next level, consider implementing

an internal partnering recognition

program. It will help you publicly

demonstrate good collaborative

behavior; the PM’s of projects that are

highly successful will have a platform

to rise within your organization; and

you will be SERVING THE OBJECTIVES

of your partnering program. Plus—the

winners of your internal program

will be outstanding candidates for

the International IPI John L. Martin

Partnered Projects of the Year. Get

involved and help the movement!

B U I L D I N G C A L I F O R N I A F O R S E V E N T Y- F I V E Y E A R S

PAVING

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DEMOLITION/EXCAVATING

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INTERNATIONAL PARTNERING INSTITUTEJOHN L. MARTIN 2015 PARTNERED PROJECT OF THE YEAR - DIAMOND LEVEL

SFO RUNWAYS 1-19s RSA IMPROVEMENTS

WINNER OF THE 2014 CALTRANS EXCELLENCE IN PARTNERING AWARD“BEST IN CLASS” FOR PROJECTS GREATER THAN $50 MILLION

Highway 65 Lincoln Bypass Project


Construction activities at the end of even the most

successfully partnered projects have the potential

to dismantle the desired cooperative alliance and

project outcomes. Important project goals involving

quality, safety, schedule, fiscal responsibility, environmental

impact, public relations, communication, conflict resolution

and teamwork can be negatively impacted. Not all symptoms of

this syndrome are overtly obvious. Some are more subtle and

require additional vigilance on behalf of project leadership.

While the added stresses unique to the end of the project

present challenges, they are also an opportunity for leadership

to intervene and lessen their impact. Some of the things to look

for at the site as the project is winding down include:

• Waning Enthusiasm: As the project winds down, the

work activities often evolve into the project’s “dog days,”

involving mundane and repetitious punch list and finish

work. The lack of enthusiasm for these activities can lead

to diminished intensity, focus and concentration at a time

when the project needs to finish strong.

• Schedule Focus: At the end of the project, the schedule is

often tight with negative, little or no float remaining. With

the potential risk of liquidated damages, any delays such as

changes, new work or rework can impact the critical path.

Attempts to accelerate construction to make up the schedule

can create even more stress and problems.

• Stressful Team Relationships: Good working

relationships among site workers is one of the desired

outcomes of successful partnering. At the end of the project,

workers at the site begin to experience a higher level of

anxiety and stress. The good rapport that characterized

earlier relations becomes more hostile and adversarial,

causing unresolved conflicts, finger-pointing, blaming &

complaining and a general CYA attitude.

FACILITATOR’S CORNER

THE END-OF-PROJECT SYNDROMEThe Cause, and Solution

THE SOLUTION: LEADERSHIP The leadership strategy for minimizing the impact of the

end-of-project syndrome essentially involves an awareness

of the symptoms, increasing site visits and strong influential

leadership. Here are a few recommendations:

A. BE VIGILANT

1. Be alert to site level changes that produce unusual anger and

frustration.

2. Look for any diminished quality or work and/or safety

conditions.

3. Be aware of any rumors at the site and openly discuss and

dispel any rumors that are untrue.

4. Identify and communicate closely with those select site level

people present on all projects who always seem to have a

good handle on the current emotions and feelings at the site.

5. Don’t subscribe to the “no news is good news” management

philosophy. Site level people are very good at masking

problems, especially those involving relationships.

B. BE VISIBLEThis is an ideal time to utilize the adage: ”You can’t lead from

an office.” Leadership at this point in the project means getting

face-to-face with what’s happening at the site.

1. Step up one-on-one, face-to-face contact with site level

workers. They will disclose undue stress and frustrations

when you sincerely ask in person, but will be reluctant to

make the time if they have to come to your office.

2. Keep a close tab on performance evaluations as they relate

to site level. Particularly, look for low numbers and negative

comments in the relationship categories of communication,

conflict resolution and teamwork.

3. Keep soliciting input from site level people. Make your

inquiry personal. Rather than ask: How are things going?


make it personal by asking: How are things going for you? Is

there anything you need? How can we make your job easier?

Then take the time to sincerely listen closely.

C. BE VIGOROUSThis is the time for energetic, take charge and persuasive

leadership. Don’t assume that site level problems will evolve

favorably without sound leadership influence.

1. Emphasize That Schedule Problems Belong to the Team:

Being on schedule is one of the most important goals of any

project team. Prior to partnering, it was thought to be solely

the contractor’s responsibility. Solid partnering dictates

that the schedule belongs to the entire team, not just the

contractor. This means having the entire team willing to go

the extra mile in helping the contractor meet the schedule.

This could mean forming a cross-functional focus group to

investigate all options, more planning meetings and tighter

communication regarding the schedule.

2. Celebrate Success: While the end of a project leaves

little time for larger formal events to celebrate milestones,

mini celebrations can be had by catching people in the

act of doing things right. Recognition is the magic elixir

of human relations and goes a long way in restoring

worker motivation and reducing stress and frustration.

3. Avoid Expression of Negative Feelings: Leadership should

never express negative thoughts or emotions to site level

workers. There are enough of these being generated at the

site without having to deal with top down, management-

originated negatives. Leaders should be a sounding board

for subordinates, not conversely.

4. Subcontractor Coordination: Often it’s the subcontractors

who carry the brunt of punch-list finish work; therefore they

are key partners in how well the project finishes. Make sure

the prime contractor is maintaining close contact with their

subs so they will have an open forum to discuss and resolve

any issues or problems between trades.

Sometimes events at the end of a project that create extra site-

level frustration and stress are inescapable. A strong finish can

often make the difference between an undistinguished and an

excellent project. The difference is often the responsibility of

project leadership being forewarned and willing to step up their

vigilance and visibility and vigorously taking appropriate steps to

alleviate the impact of the end-of-project-syndrome.

Larry Miller, MIPI, President, Productivity Through People—Larry has facilitated more than fifteen hundred projects including hospitals, manufacturing facilities, transportation projects, dams and mechanical facilities, and has also led several internal strategic partnering initiatives.

As one of North America’s largest transportation and infrastructure contractors, our commitment to building the best is demonstrated in the projects we build and the partnerships we develop. Our success is dependent upon our relationships with owners, partners, designers, subcontractors and community members. Flatiron works closely with our partners to develop innovative solutions that benefi t everyone, and we’re proud of what we’ve created together. The more than 20 partnering awards Flatiron has won in the past decade serve as recognition of these relationships and

the resulting successful projects.

To learn more about Flatiron’s innovation in partnering visit

www.fl atironcorp.com

Interstate 880/State Route 92 Interchange Reconstruction

Hayward, CA

2012 IPI Partnered Project of the Year, Diamond Level


PARTNERING AWARDS

WIN

NE

RS

2015 IPI PARTNERING AWARDSON MAY 14TH, 2015, IPI CELEBRATED ITS 6TH ANNUAL IPI PARTNERING

AWARDS CEREMONY. OWNERS, CONTRACTORS, FACILITATORS, CMs, DESIGNERS,

AND OTHER ASSOCIATED CONSTRUCTION PROFESSIONALS DEDICATED TO

CONSTRUCTION CULTURE CHANGE, GATHERED AT THE SFO INTERNATIONAL

AIRPORT MUSEUM TO CELEBRATE THE NATION’S MOST COLLABORATIVE

ORGANIZATIONS AND PROJECT TEAMS.

• Total contracted work: $2,079,873,557

• Total budget savings: $135,878,595.74 (7% average savings)

• 19/23 — ratio of jobs without a Time Loss Incident

• 15/23 — ratio of projects that came in on-time, or early

• 17/23 — ratio of projects completed on, or under, budget

• There were 1403 Change Orders—but Zero Claims

BASED ON A SURVEY OF ALL 2013, 2014, AND 2015 IPI AWARD

APPLICANTS: $1 SPENT ON PARTNERING LED TO $81 IN

SAVINGS FOR THE PROJECT.


IPI PARTNERING CHAMPION

San Francisco International Airport Design and Construction Division

The IPI Partnering Champion is IPI’s highest honor. This award recognizes the organization that embraces and models the IPI mission to develop high trust relationships and collaborative cultures over a long period of time. The San Francisco International Airport Design and Construction Department has been a leader in the industry, sharing Collaborative Partnering worldwide through the aviation industry, the vertical construction industry and locally throughout the Bay Area. We are grateful for their service and support!

IPI CHAIRMAN’S AWARD

J. Louise McGinnis Barber

This award highlights an individual who has provided exceptional leadership and service to IPI and its members and who models the collaborative behavior at the core of IPI’s Mission.

IPI Professional Facilitator CertificationsCertified Professional Facilitator (25 sessions)

• Kurt Dettman, IPI, KDR AssociatesMaster Level Facilitators (250 sessions)

• Neal Flesner, MIPI, Ventura Consulting Group• Larry Miller, MIPI, Productivity Through People

Owners Who Adopted Collaborative Partnering in 2014

• California Department of Water Resources• Michigan DOT• San Francisco Municipal Transportation Agency• San Francisco Port• San Francisco Public Works• San Francisco Recreation & Parks

2015 IPI INDUSTRY AWARDS:Industry Awards honor organizations and individuals who have worked to make the industry more collaborative.

Working Together Towards Exceptional Project Outcomes

cpmservices.com

415.543.6515


PARTNERING AWARDS

VERTICAL BUILDING PROJECTS: $25M - $250M

DIAMOND LEVEL

St. Jude Medical Center Northwest Tower Project, Fullerton, CAOwner: St. Joseph Health with Petra Integrated Construction StrategiesPrime: McCarthy Building Companies, Inc.Designer: TAYLOR DesignFacilitator: Bainbridge Consulting, LLCFacilitator: Ventura Consulting Group

IPI PARTNERED PROJECTS OF THE YEAR:IPI Partnered Projects of the Year honor project teams who have exhibited the highest levels of collaboration on projects completed in 2014.

RUBY LEVEL

DeWitt Nelson Correctional Annex Project, Stockton, CAOwner: CA Department of Corrections and RehabilitationPrime: Hensel Phelps Construction Co.Designer: Helmuth, Obata + KassabaumCM: URS/Lend LeaseFacilitator: OrgMetrics LLC

SFO West Field Cargo Redevelopment Project,

Specialty Contractors: All State Construction, Inc.; Preferred Utilities Manufacturing Corp.; Nosal Builders, Inc.

San Francisco, CAOwner: City and County of San Francisco Airport CommissionPrime: McCarthy Building Companies, Inc.Designer: Kwan Henmi Architecture and Planning, Inc.CM: The Allen Group, LLCFacilitator: OrgMetrics LLC

VERTICAL BUILDING PROJECTS: UNDER $25M

SAPPHIRE LEVEL

Connecticut College Boiler Plant Replacement Project, New London, CTOwner: Connecticut CollegePrime: KBE Building CorporationDesigner: RMF Engineering

St. Jude Medical Center Northwest Tower Project

SFO West FieldCargo Redevelopment

DeWitt NelsonCorrectional Annex

Connecticut College Boiler Plant Replacement Project


TRANSPORTATION MEGA PROJECTS: $250M+

DIAMOND LEVEL

Denver Union Station Transit Improvements Project, Denver, COOwner: Denver Union Station Project Authority (DUSPA)Owner: Regional Transportation District (RTD)Owner: City and County of DenverPrime: Kiewit Infrastructure Co.Designer: AECOMDesigner: SOMFacilitator: FMI Corporation

SAPPHIRE LEVEL

BART Oakland International Airport Connector Project, Oakland, CAOwner: San Francisco Bay Area Rapid Transit District (BART)Prime: Flatiron West, Inc. / Parsons A Joint VentureDesigner: Parsons Transporation GroupFacilitator: Pinnacle Leadership Group

TRANSPORTATION PROJECTS: $25M - $250M

DIAMOND LEVEL

SFO Runways 1-19s RSA Improvements Project, San Francisco, CAOwner: City and County of San Francisco Airport CommissionPrime: Golden Gate Constructors (DeSilva Gates Construction and Graniterock JV)Designer: AECOM with Lean PhotometricsCM: Parsons Brinckerhoff with assistance from Cooper Pugeda Management Subcontractor: Royal Electric CompanyFacilitator: OrgMetrics LLC

IN 2015, IPI AWARD-WINNING PROJECTS SAVED $136 MILLION FROM

THE ENGINEERS’ ESTIMATES—THAT’S AN AVERAGE SAVINGS OF 7%!


Denver Union Station Transit Improvements

BART Oakland International Airport Connector

SFO Runways 1-19sRSA Improvements


SAPPHIRE LEVEL

I-96 Rehabilitation Project “96fix,” Livonia, MIOwner: Michigan Department of TransportationPrime: Dan’s Excavating, Inc.Facilitator: Anderson Partnering

Nelsonville Bypass Project, Hocking, OHOwner: Ohio Department of TransportationPrime: The Beaver Excavating Company

Sand Creek Interchange and 4-Lane Widening Project, Antioch and Brentwood, CAOwner: Contra Costa Transportation AuthorityPrime: Bay Cities / Myers A Joint VentureDesigner: Mark Thomas and CompanyCM: Parsons BrinckerhoffFacilitator: GLA Corp.

TRANSPORTATION PROJECTS: $25M - $250MRUBY LEVEL Highway 65 Lincoln Bypass Project, Lincoln, CAOwner: State of California Department of TransportationPrime: DeSilva Gates FCI, Joint VentureFacilitator: OrgMetrics LLC

I-80 Carlin Tunnels Improvement Project, Carlin, NVOwner: Nevada Department of TransportationPrime: Q&D Construction, Inc.Facilitator: Ventura Consulting Group

PARTNERING AWARDS


Highway 65 Lincoln Bypass Project

I-80 Carlin TunnelsImprovement Project

I-96 Rehabilitation Project “96fix”

Nelsonville BypassProject

Sand Creek Interchange and 4-Lane Widening


PARTNERING AWARDS

THANK YOU TO OUR 2015 EVENT SPONSORS!


TRANSPORTATION PROJECTS: UNDER $25M

DIAMOND LEVEL I-10 Perryville T1 Design-Build Project, Goodyear and Buckeye, AZOwner: Arizona Department of TransportationPrime: Skanska USA CivilDesigner: Gannett Fleming

RUBY LEVEL

Route 110 Auxiliary Lane Project, Los Angeles, CAOwner: Caltrans District 7Prime: Flatiron Construction CorporationFacilitator: GLA Corp.

Santa Rosa Ave. Widening Project, Santa Rosa, CAOwner: City of Santa RosaPrime: Ghilotti Bros., Inc. - TerraCon Pipelines, Inc. JVFacilitator: GLA Corp.

La Cholla Boulevard Project, Pima County, AZ (photo far right)Owner: Pima County Department of TransportationPrime: Markham Contracting Co., Inc.Designer: AECOM

PARTNERING AWARDS

HONORABLE MENTION PROJECTS

The Castro Streetscapes Project, San Francisco, CAOwner: San Francisco Public WorksPrime: Ghilotti Bros., Inc.Designer: San Francisco Public WorksFacilitator: Ventura Consulting Group

I-85 Yadkin River Crossing Project, Salisbury, NCOwner: North Carolina DOTPrime: Flatiron - Lane JVDesigner: STV/Ralph Whitehead and AssociatesCM: The Lane Construction Corp.Facilitator: Wheeler Hill International

San Francisco - Oakland Bay Bridge -Oakland Touchdown Project 2, Oakland, CAOwner: CaltransPrime: Flatiron West, Inc.Facilitator: Ventura Consulting Group


La Cholla Boulevard Project

Route 110 Auxiliary Lane Project

I-10 Perryville T1Design-Build Project

Santa Rosa AvenueWidening Project

San Francisco - Oakland Bay Bridge Oakland Touchdown Project 2

I-85 Yadkin RiverCrossing Project

The Castro StreetscapesProject


SAPPHIRE LEVEL

Buskirk Avenue Widening Project, Pleasant Hill, CAOwner: City of Pleasant HillPrime: Ghilotti Bros., Inc.Designer: T.Y. Lin InternationalCM: Ghirardelli Associates, Inc.Facilitator: OrgMetrics LLC

Highway 101 North Atherton Project, Novato, CAOwner: CaltransPartnering Agency: Transportation Authority of Marin (TAM)Prime: Ghilotti Bros., Inc. / RM Harris Co JVDesigner: B.K.F.Facilitator: OrgMetrics LLC

2142J Pedestrian Countdown Signals Project, San Francisco, CAOwner: San Francisco Public WorksPrime: Bay Area Lightworks, Inc.Facilitator: OrgMetrics LLC

SR 101 (Agua Fria) Maryland Ave. HOA Ramps Project, Glendale, AZOwner: Arizona Department of TransportationPrime: Coffman Specialties, Inc.Designer: T.Y. Lin International

HONORABLE MENTION PROJECTS

The Castro Streetscapes Project, San Francisco, CAOwner: San Francisco Public WorksPrime: Ghilotti Bros., Inc.Designer: San Francisco Public WorksFacilitator: Ventura Consulting Group

I-85 Yadkin River Crossing Project, Salisbury, NCOwner: North Carolina DOTPrime: Flatiron - Lane JVDesigner: STV/Ralph Whitehead and AssociatesCM: The Lane Construction Corp.Facilitator: Wheeler Hill International

San Francisco - Oakland Bay Bridge -Oakland Touchdown Project 2, Oakland, CAOwner: CaltransPrime: Flatiron West, Inc.Facilitator: Ventura Consulting Group

Santa Rosa Since 1908 Vallejo

Ghilotti Bros., Inc.Since 1914 San Rafael

International Partnering Institute Awards!

• Ruby Level Award: Santa Rosa Ave. Widening Project, Santa Rosa

• Sapphire Level Awards: 1) Buskirk Ave Widening Project, Pleasant Hill 2) Highway 101 North Atherton Project, Novato

• Honorable Mention: The Castro Streetscapes Project, San Francisco

CONGRATULATESCOLLABORATION

COMBAT

MAKE YOUR PROJECT AN AWARD WINNING PROJECT—

BOOK A COLLABORATIVE PARTNERING ORIENTATION TRAINING FOR YOU OR FOR

YOUR TEAM TODAY!(925) 447-9100

Highway 101 NorthAtherton Project

SR 101 (Agua Fria) Maryland Ave. HOA Ramps

2142J Pedestrian Countdown Signals

Buskirk Avenue Widening Project

16 Partnering Magazine July/August 2015 www.partneringinstitute.org16 Partnering Magazine July/August 2014 www.partneringinstitute.org

The Productivity Gap In Construction

Construction is the only non-farming industry in

the United States that has lost productivity points

since the 1960s. In fact, we get less productivity per

laborer today than we did even during the 1990s. Litigation,

fragmentation, increased complexity, loss of skilled workers, and

added complexity are all reasons why productivity continues to

decline. But how bad is it, and what can we do about it?

In a March 2013 AECBytes article (http://www.aecbytes.

com/viewpoint/2013/issue_67.html), Paul Teicholz, Professor

Emeritus from the Center for Integrated Facilities

Engineering (CIFE) at Stanford University, shares how

the construction industry’s performance has struggled

and continues to get worse compared to other industries.

Teicholz demonstrates that while all non-farming

industries (like manufacturing, robotics, retail, etc.) have

improved steadily from 1964–2012, the construction

industry has slowly declined.

The MethodologyThere are two U.S. Government agencies that measure

the economic impacts of nearly every industry—the

Census Bureau, and the Bureau of Labor Standards. The

Census Bureau focuses on industry specific outputs and

the dollar value of inputs (like the Construction data in

Figure 1, shown at right). The Bureau of Labor Standards

(BLS) focuses on labor inputs and data specifically.

When data from these two sources is combined with

information from the Bureau of Economic Analysis (which

compiles the Gross Domestic Product, Value Added, Inputs/

Outputs, etc.), we get improved insight into the construction

industry.

In order to measure Labor Productivity, Teicholz and his team

first organized an index of Construction Output in constant

dollars (based on 1987 dollars). This demonstrated a significant

increase from 1992-2007, and then a sharp decline, prior to our

recent recovery in 2012/3.

RESEARCH ROUNDUP Since 1964, all Non-Farm Industries in

the U.S. have increased in productivity by 3.06% each year, while Construction productivity has declined by -0.32% each year.

Figure 1: Labor productivity


The researchers then

collected weekly

construction industry work

hours from the BLS. This

became the basis for annual

work hours indexed from

1964-2012 (anchored around

1987). He notes, “During the

peak years of 2006-7, there

were 15.5 billion hours worked by 7.7 million workers. This

dropped to 11.4 billion hours in 2012, a decrease of 26%.” This

is a dramatic drop-off.

The FindingsOnce Labor Productivity and the total hours were calculated,

labor productivity is simply construction output by category,

divided by labor hours over time (See Figure 1).

According to Figure I, you can see “All Non-Farm Industries,”

steadily increasing in productivity from 100 productivity points

in 1964 to more than 250 today—an average increase of 3.06%

Partnering for Project SucceSS

Parsons Brinckerhoff salutes our partners on these iPi award-winning projects:

We partner with clients, consultants and contractors to deliver project success worldwide. Learn more by visiting pbworld.com

• runway Safety area improvements San francisco international airport 2015 Diamond Level Partnered Project of the Year

• Sand creek interchange and Widening antioch and Brentwood, ca 2015 Sapphire Level Partnered Project of the Year

for career opportunities visit pbworld.com

per year. Over the same period, construction productivity has

decreased at an average of -0.32% per year. This is a profound

difference!

In a June 2014 article, Matt Stevens took Teicholz’s findings

one step further, emphasizing how much labor productivity

has declined per worker since 1993 (Figure 2). We are left with

a fairly depressing figure about how the industry is trending

in terms of productivity. But before we focus on solutions, it is

important to acknowledge why.

Figure 2: Chart created by Matt Stevens, National Society of Professional Engineers, with data from the U.S. Department of Labor and the U.S. Bureau of

Economic Analysis


RESEARCH ROUNDUP

Root Causes of Lost ProductivityIn the series, Teicholz claims that there are a number of root

causes of the loss in productivity:

• Litigation — Litigation affects every aspect of our project

negotiations. Think about your most productive project

teams...even they have to write carefully crafted emails

documenting agreements and citing specifications to

ensure that the paper trail matches the budget.

• Paper Documents — Teicholz focuses on the inefficiency

of paper specs developed by teams who work in silos. The

designer and engineers rarely work in the same room

throughout programming and design, so although Building

Information Modeling (BIM) tools have become more

popular in the vertical market, the actual construction

specifications are still two-dimensional, incomplete, and

imperfect.

• Loss of Skilled Workers — Participation of highly skilled

workers has steadily declined (particularly in the 2000’s),

as relative hourly pay rates have continued to drop and

union participation has decreased.

• Fragmentation — The vast majority of construction firms

are small in size. 62% of industry firms have 1-5 employees

and nearly 97% of the firms have 49 or fewer employees.

In the vertical market, these small firms account for 51%

of the total volume of business. Small businesses are much

more sensitive to market changes than large firms, which

makes broad adoption of innovative practices incredibly

challenging.

• Complexity — Construction projects today are much

more complex than projects even 20 years ago for a

number of reasons. One key issue is that new construction

only accounts for 63.57% of projects. Today, 22.2% of

the time, construction involves additions, alterations

or reconstruction, which is much more complex than

new construction. Furthermore, it is now common for

the public to be walking in, around, or near the active

construction site.

• Safety — Construction projects today are much safer

than they were in the 1960s and reportable injury rates

and worker deaths have steadily declined since then. It is

important to continue to focus project teams on a safety

culture, but we intuitively know that the additional meetings

and training have an effect on productivity rates. It would be

valuable to learn how to quantify this and put it in context so

we could determine if it is statistically significant.

Applying this Knowledge to Your Next ProjectTeicholz believes that there are a few key positive changes

that are allowing the construction industry to recover its

productivity, but the real gains have yet to be seen. In his

articles, he focuses on broader implementation of interactive

tools like BIM and the increased use of off-site fabrication and

modular construction to improve on-site productivity.

We have found that projects that effectively implement

Collaborative Partnering are also able to improve productivity.

When teams align their goals and set clear norms of behavior

so project teams can resolve the technical issues that arise, they

become predictably successful. Since 2013, two-thirds (33 of the

49) IPI Award-winning projects finished on time or early. And in

2014 alone, the 23 Award-winners project teams processed 1403

contract change orders, but had no outstanding claims! Research

and experience demonstrate that partnered projects improve

productivity by reducing schedule, reducing rework, and

improving the team culture, which improves job satisfaction

(and therefore worker productivity). By focusing on the root

causes of the loss of productivity (litigation, fragmentation, etc.)

your team will get better results. Good luck!

________________________________Sources: • Teicholz, Paul, AECBytes, Labor-Productivity Declines in the Construction Industry: Causes and Remedies (Another Look) (http://www.aecbytes.com/ viewpoint/2013/issue_67.html) accessed June 5, 2015 • Matt Stevens, Construction Productivity in Decline, Published by the National Society of Professional Engineers, June 2014

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Collaboration. Innovation. Sustainability.Partnering to build a better future for our customers and communities.

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Gold Line Bridge, Arcadia, CA


BEST PRACTICES

IPI META-ANALYSIS PART IIIThe Significance of the Elements of Partnering and How They Relate to One Another

In this issue, we’ll continue our in-depth exploration

of the IPI Meta-Analysis with a look at the significance

of specific Partnering elements and how they relate to

one another.

As we detailed in our first article in this series, the specific

elements in the Partnering Framework are: Boundary

Conditions (owner readiness), Drivers during Delivery

(partnering tools), Team Characteristics (personality

and group traits), Project Outcomes and Organizational

Outcomes. A critical finding that emerged from the research

is that the actual implementation of partnering sessions (kick-

off, follow up and close out/lessons learned) are the most significant elements

of the entire partnering structure. The research also demonstrated that specific

elements of the Partnering structure directly correlate to specific outcomes, so

it’s possible to customize your partnering program to hone the outcomes that

your organization desires.

The Significance of the Partnering Framework ElementsThe structured Collaborative Partnering process is a step-by-step methodology

designed to maximize the potential of each project. Each step in this process is

The most significant

of all of the elements,

and by a very

healthy margin,

is the practice of

Partnering.

Photo courtesy Flatiron West, BART Oakland International Airport Connector important and is designed to improve project and program outcomes. And yet, there is a weighted

significance to particular elements within the Partnering Framework that have a greater impact

on the success of your program.

The most significant of all of the elements, and by a very healthy margin, is the practice of

Partnering. The practice of partnering is the implementation of Partnering tools: the kick-off

session (and developing the Charter), regular Partnering sessions (and Scorecards), and the

close out/lessons learned session.

If you’ve engaged in Partnering, you are probably not surprised by this finding. It doesn’t surprise

us at IPI because we hear from teams on a regular basis about the factors that have made their

Partnered projects a success. We hear about better relationships, face-to-face communication, more

trust, early identification of issues, and a respectful climate that fosters innovative and creative

thought. And all of these things actually take place in—or occur as a result of —Partnering sessions.


Boundary Conditions Drivers during Delivery Team Characteristics

Project Outcomes Organizational Outcomes The second most significant element of the Partnering

structure are the Cultural Boundary Conditions, the

characteristics of the owner agency. Cultural owner conditions

include effective and open communication, commitment to

continuous improvement, and creativity and innovation. In short,

all of the qualities that make for a good project team. So if you

want your project teams to embody these qualities, make sure

that they are present in the owner as well.

The third most significant element of the Partnering structure

are the Team Performance outcomes. These include improved

relationships and long term established trust within the teams.

Each of these elements are clearly connected: the Owner’s

cultural characteristics foster the characteristics that will help a

The Significance of the Elements of Partnering250

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Conflict Res

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team thrive, and the Partnering sessions give the teams the road

map and tools to hone that dynamic and produce results.

During a recent IPI Collaborative Partnering Orientation Training,

Jamie Cooper with Chaves and Associates shared a success story

that pretty much embodies this research. She was a member of

the SFO Westfield Cargo Project (a Ruby Level 2015 Partnered

Project of the Year Award Winner). Jamie shared that working on

that project “was fun, it was enjoyable to go to work every day,

but the main thing was that we treated each other like family...

We trusted each other.” The quality of that team dynamic was

fostered through consistent (quarterly) partnering sessions,

empowered by an Owner with a Culture of Partnering, and the

results were an Award Winning project!

Now, let’s go one step further: what specific outcomes can we

expect from the various elements of the Partnering structure?

The Elements of Partnering and their OutcomesEvery Owner and project team has specific outcomes that

they need to achieve. In some cases, conflict resolution is the

most important project outcome in order to reduce claims. In

others, quality is more important than any other outcome. The

graph below shows the significance of specific elements of the

Partnering Framework on particular outcomes.

BEST PRACTICES

Is your prime objective improved quality and safety? The Meta-

Analysis found that quality and safety most consistently derive

from contractual drivers. Contractual drivers are basically

contracts that include incentives, risk/reward (or pain-share/

gain-share) and the actual contract language. If as an Owner

your procurement is outside of your control, you will need

to foster the safety and quality environment through your

Partnering.

Is your prime objective conflict resolution? According to the

findings, the use of partnering sessions and tools have the most

direct impact on conflict resolution, followed by contractual

terms, and in third place, procurement. Procurement refers to

the early involvement of all team members in the partnering

process, and hiring teams based on their qualifications and

partnering experience. This is an excellent reason to join the IPI

First Campaign and, when you are given the choice, work with

fellow IPI members!

So choose what you emphasize within your Collaborative

Partnering Program based on your objectives! Is it your aim to

get better outcomes across the board? Then your best bet is to

design a robust Partnering Program. We can help you get there!

Visit the IPI website today to download our sample Partnering

Specifications and other tools to boost your program - http://

partneringinstitute.org/owners-toolbox/. We can also train your

teams to help you get the most out of your Partnering program -

http://partneringinstitute.

org/training/.

For more information

on the Meta-Analysis,

its findings, and how

to apply them to your

program, contact

Dana Paz, IPI Assistant

Director, danapaz@

partneringinstitute.org.

Source: The IPI Meta Analytic

Synthesis of Partnering

Literature in the Architecture,

Engineering, and Construction

Industry is authored by Sinem

Mollaoglu (Korkmaz), PhD. and

Anthony Sparkling, MCM, of

the Michigan State University

Construction Management

Program

The Owner’s cultural characteristics foster the qualities that will

help a team thrive, and the Partnering sessions give the teams the

road map and tools to hone that dynamic and produce results.

Partnering to Reach #1AUSTIN WEBCOR JV

Congratulations to all the IPI Award winners, and especially to San Francisco International Airport Design & Construction Division for being named 2015 IPI Partnering Champion.

Making SFO’sPartnering Program FlyFor almost two decades OrgMetrics has been providing Partnering Services for San Francisco International Airport’srenowned Partnering Program

Partnering Program Development/Facilitation • Project Partnering Facilitation • Strategic Partnering Facilitation • Facilitated Dispute Resolution • Project Scorecards

www.orgmet.com | (925) 449-8300