How owners can control risk and cost through a planned approach
Project changes are inevitable. With more than 20 years of experience in the architecture industry, I’ve dealt with countless changes impacting projects’ scopes and requirements. These changes have been initiated by a variety of stakeholders and occurred during all stages of design, documentation and construction.
If not given ample forethought, changes – especially those initiated later in a project’s schedule – can cause inconsistent results, overages in budget and delays in schedule. The good news is all project changes are manageable if reacted to with a planned, disciplined approach.
At MG2, we give change management considerable attention. We help clients balance their desire to innovate (i.e., integrating new methods, ideas or materials into established project plans) with their desire to achieve fast-paced growth (i.e., completing projects on time and on budget). This can be challenging as often these ambitions are in direct conflict with each other, which puts a project’s quality, cost and schedule under continual pressure.
To help alleviate this pressure, I recommend owners consider the following change management strategies for their next project.
Budget for It
In the current construction climate, owners are coordinating more projects than ever and doing so with fewer internal resources. It’s inevitable a detail will get overlooked or parties will have different interpretations of a conversation. In either case, a project revision will be required down the line to rectify the situation.
To prevent changes from cascading and wreaking havoc on a project, I recommend factoring time into a project schedule to accommodate modifications to the original scope, execution time, cost and / or quality of work. The owner’s project manager (OPM) should clearly identify change contingencies, and as a project progresses, he or she should be transparent in communicating how the final commissioned building will benchmark against the original design intent.
If the owner is unable to afford a contingency around change for a project, the OPM should communicate to internal stakeholders that a “zero owner change policy” has been enacted. This means no changes will be permitted once a project has gone through design development.
Keep Tight Control
Frequently, stakeholders within an owner’s organization have equal say regarding project development. While a democratic decision making process may be inherent to an organization’s corporate culture, it can have dire consequences on a construction project.
To prevent a “too many cooks in the kitchen” scenario from happening, the OPM should encourage internal stakeholder involvement only through specific project milestones. I recommend OPMs be regimented in obtaining approvals, and once approved, be disciplined in adhering to the decisions they dictate.
Additionally, OPMs can mitigate risk through increased communication and by having agreed-upon thresholds for when change is no longer a financially viable option. Owners that are able to operate by strict change management guidelines have the highest control over project schedules and costs.
For every change the owner makes, there are a myriad of service providers that need to react including vendors, consultants, contractors and suppliers. OPMs should have a single system in place allowing service providers to quickly be notified about changes. Additionally, the system needs to allow providers to respond back with questions or updates. There are multiple cloud-based change management systems on the market to help with this process.
Having consistent reporting and communication structures established reduces the chance a detail will go overlooked or out-of-date information will be perpetuated. OPMs should remember to allow adequate time for service providers to price and implement change. A mechanism should also be put in place that enables an owner’s internal stakeholders to easily submit and approve changes.
Make Changes Early
From a consultant standpoint, the later a change is initiated in a project schedule, the greater the impact will be on design documents. Not only do costs increase related to carrying out the changed work, but so does the risk involved. Project coordination errors are more likely to occur, especially for larger, more complex projects, when changes are made late.
On top of that, any changes made after construction starts will decrease the efficiency of production and increase the amount of supervision / administration a project requires. This inclusion of more personnel escalates the cost of change. And if premium time, rework or restocking is involved, the added costs are compounded further.
My goal in sharing these strategies is not to eliminate project changes; rather, it is to help owners minimize negative impacts of necessary changes while preventing unnecessary ones. By budgeting for change, promoting transparent communications about how change will impact workflows and formalizing a structure for initiating, processing and approving change, owners can mitigate risk and minimize costs.
Headline images courtesy of Seattle Public Library (left) and Alex Blackstock (right).