Tsunammis of Change

Out Running the Tsunami of Change

Rex MillerThought LeaderTAG Consulting

Thursday, April 29, 2010

Outrunning The Tsunami of Change

Different Seas Different Ships

Oral Print

Broadcast Digital

The 4 Tsunamis of History

CharacterContent

ImageNetwork

Facebook Vote

OralHolistic, Circular, Symbolic, Interdependent

Print Linear, Sequential, Rational, Autonomous

BroadcastFluid, Fragmented, Emotional, Isolated

Digital/InteractiveHolistic, Non-linear, Whole-Brain Systems Thinkers, Interconnected

Resilient

AdaptableThursday, April 29, 2010

Digital Immigrants Digital Natives

Over 656%

Boomer50%

GenX38%

Millennials6% 2008

Boomers24%

GenX33%

Millennials43%

2 Camps

Finding the New Normal

Hoping for the Old Normal

80 Websites

• 6 Mention Sustainability• 3 Use Social Networking• 2 Made me Smarter• 1 Provided a Blog• 1 Mentioned the iPad

Common Phrases

Industry LeaderStrive for ExcellenceA Bunch of Marquis ClientsWorld LeadingHighest QualityLeading ProviderWe have ValuesWe started in a garage in 19...

PS: Get Rid of Flash!

AV Trends

• Scope Blur• Commoditization• Prefabrication• Telepresence and

new competitors• Margin Erosion

Productivity Gap

•The bid ≠ the business case

•Negative correlation between low bid and final cost

•Dilution of commitment

•Winner’s curse

•Bidding is not apples-to-apples

•Cost of bidding gets recouped

•Fallacy of value engineering

•What does the bidder actually win?

•Campaign vs. Govern

•Romance vs. Marriage

The Bid Game vs. Project Success Factors

•Fragmented

•Silo’d

•Linear/Sequential

•Hierarchical

•Adversarial

•Scope Based

•Anticipates Litigation

•Low Price / Bid

How Do We Force Projects to Behave?

Sutter Health Past Experience

Traditional vs. Integrated Target Pricing

How do Real Project Behave?

•Complex

•Relational

•Require trust

•Need tight coordination

•Fluid

•Interactive

•A system

•A discovery process

•$300-$500 billion annual WASTE(buildingSmartAlliance)

•50%+ Waste in the System(buildingSmartAlliance and Lean Construction Institute)

•70% Over Budget and Late(Egan report)

•48% of Green House Gases (Energy Info Admin Statistics and Pew Climate report)

Results of a Broken System

•Labor = 50% @ 30% efficiency = 35% waste

•Materials = 40% @ 70% efficiency = 12% waste

•QTO = up to10% of the cost

•Bidding = 5%+ of the cost of a project

•Change orders between 2-10% of the cost

•Contingencies up to 7%

•Team Learning Curve = 5%

•3-7% is lost in project cost reduction by not maximizing Construction Tax Planning

Uncovering the Hidden Waste

Thought Leadership

By-Products to Products

Integrated Teams

No Waste

Owner Value Language

Brand Promise

New Operating Principles (imperatives)

Thought Leadership

By-Products to Products

Select Teams not Players

2004 2008

Evidenced Based Team Formation

29%disengaged

17%engaged

54%unengaged

Playing To Your Strengths

The ROI of Trust•Warren Buffet: Handshake deal for McLean

•LogicaCMG study of 1200 contracts: 20% to 40% difference on service, quality & cost

•Profitable Partnering for Lean Construction: strategic partnering delivers up to 30% in cost savings of construction

•Speed of Trust: distrust creates a 50% tax on work

•Edelman Trust Barometer: 20% higher ROI over a 10 year period

Trust: Deficit to DividendTrust Balance -40%-40% -20% NeutralNeutral 20%20% 40%

Environment StressfulStressful Worry No worriesNo worries PositivePositive Uplifting

Focus Pre-emptionPre-emption Process ScopeScope OutcomeOutcome Mutual successRelationships DisrespectDisrespect Indifferent CordialCordial CooperativeCooperative Collaborative

Process Hidden agendasHidden

agendasChain of

commandTask at handTask at hand Keeping

promisesKeeping promises

Making it easier for others

Behavior CYACYA Do my job RespectRespect PartneringPartnering Transparency

Outcomes PoliticsPolitics Slow EfficientEfficient Learn from mistakes

Learn from mistakes

Improve

Systems DistractingDistracting Hassle Does not get in the way

Does not get in the way

SupportiveSupportive Adaptive

Ethics Self-interestSelf-interest Compliance What is expected

What is expected

What is rightWhat is right What is good

NO Waste - Sutter Health & DPR

$1 million a bed$1000 per square foot

10% under budget6 months early6 RFIs MEP

Guaranteed Price

Guaranteed Move-in Date

No Change Orders

2-Year Warranty

1 Page Contract

The Value of

a Promise

•Develop a Digital Mindset and Tools•Design Resilient and Adaptable Organizations•Make Way and Leverage This Next Generation•Use Upstream Thinking to Get In Earlier and Higher•What By-Products of Your Work Can Become Products?•Don’t Miss the IPD, BIM and Reliable Results Wave•Begin Building Teams that Integrate the Supply Chain•Learn to Speak to Owners in Terms They Care About•There is an ROI for Trust. Can you Measure Yours?•Is Your Brand Promise Clear, Reliable and Truly Valuable?•Begin to Develop Strategic Foresight to Navigate Change

Call To Action

•Speaking

•Strengths Based Leadership and Coaching

•Building Resilient and Adaptable Organizations

•IPD Strategies and Implementation

•Market Repositioning

•Creating Integrated Alliances

•Business Development

•Change Management

rmiller@tagconsulting.org

214-498-3055

Tsunammis of Change

Documents

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