Whitepaper: 10.15.2015

The New Master Builder

— Mike Bolen, Chairman & Chief Executive Officer

A 21st century approach to success
by Mike Bolen, McCarthy Chairman & CEO

Centuries ago, the “Master Builder” method was how things were built. Architect and engineering functions were combined, and there was a single point of responsibility for managing design, risk and the constructability of the project. The Master Builder purchased all of the building materials and hired tradespeople to carry out the design.

It was a solid system for the times; many of the great structures built by Master Builders centuries ago still stand today. But along the way, the system began to unravel, responsibilities fragmented, and the critical components of risk management and constructability became “hot potatoes” that no one entity truly owned. The buck didn’t stop anywhere — short of the owner who paid for all the confusion.

Eventually, it became clear that this is not the optimum way to build. It’s inefficient, creates needless waste and cost, and, above all, leads to a contentious environment in which no participant can function at the highest level to deliver a product in which everyone is proud.

How did we get here? More importantly, what might we learn from the “good old days” of the Master Builder to evolve a new and more successful way to build in the 21st century? How do we best deliver a project in the future with the desired quality, on time, and at the best final cost?

To get to the answer, we first need to understand how the design and construction industry has evolved away from the Master Builder philosophy and that means focusing on two of the most important aspects of the building process.

Risk vs. constructability: Who “owns” what?
Through the years, many models have attempted to corral these two components. None have been 100 percent successful because they drove the proverbial wedge between design and construction. Inevitably, the owner was in the uncomfortable position of being caught in the middle. While the end product may have been positive, the owner’s experience along the way was far from it.

In the 1960s, McCarthy was an early leader in attempting to solve this issue by adopting the concept of the at-risk construction manager, initially in the healthcare industry. With this approach, the construction manager engaged in the design process early on and was responsible for coordinating the integration of design and construction. McCarthy accepted a transfer of the cost risk and became the “middle man” between the owner and other team members. While it was a better experience for the owner, there was often still excess friction between the design team and builder.

In the years that followed, other models evolved to try to improve these relationships, all with an eye toward better managing risk and constructability. These efforts ultimately led to the concept of Integrated Project Delivery, seeking to combine the talents and insights of the entire design and construction team — working in collaboration to reduce waste, maximize efficiency, and deliver a quality project on time and at the best final cost.

In effect, everyone shares the responsibility of risk and constructability. But the problem is that there’s no single point of responsibility. Someone needs to be in charge. That’s what owners expect. The buck has to stop somewhere.

That brings us full circle to where this all began. The single point of responsibility for risk management and constructability ought to be the Master Builder. But for very complex technical reasons, that function has been impossible to perform correctly in the modern age ― until now.

Technology: The catalyst for a better way
Consider the traditional, three-legged stool of the building industry:

  1. Estimating and preconstruction — determines the cost of a project’s design
  2. Manages the budget
  3. Builds the project

Make sure that the delivery method is consistent with what you’re trying to accomplish – and that the culture fosters true collaboration. At the risk of sounding simplistic, you’ll want to be sure you understand the roles of every player in the process and whether or not they have a history of cooperative behavior. For example, many team member roles are very different between the design-bid-build (hard bid) and design-assist processes. This disparity is even more significant, and the need for a collaborative, cooperative partner is even more important, when the design-build approach is utilized.

Design-bid-build is a more traditional approach in which the design and build functions are essentially separate, and the builder has less of a role, if any, in the preconstruction phase when essential cost and constructability decisions are made. In contrast, the builder has a greater role up front with the design-assist approach. In addition, design-assist delivery typically involves an integrated team (inclusive of early subcontractor trades) that work collaboratively to develop a design solution that meets the client’s need for quality, schedule and budget certainty as well as meeting their operational and aesthetic needs. A true Master Builder will take the leadership role in managing this process from day one.

  1. Your builder should have a dedicated leadership team. A builder may say there’s an in-house team dedicated to leading the building process — from preconstruction through post-delivery — but too often the team members are “borrowed” part time from other functional areas of the business. In fact, the overwhelming majority of builders don’t have dedicated leadership for design-phase services. For those that do, there’s a cost associated with bringing the additional leadership skills to the table. When that leadership performs correctly, the modest, added cost is more than offset by the overall project savings achieved.
  2. Confirm that your builder’s preconstruction and construction capabilities are equally robust. It goes without saying that strong preconstruction capabilities will make little difference if the builder doesn’t also have the resources, skills and experience to bring the project to life — from the first shovel in the ground to the final walkthrough and warranty periods. To succeed, owners need the complete package from preconstruction and integrated design delivery through final project completion. Many builders say they can do it, but only a very few actually can. Even fewer have a proven track record of success.

Mastering the future
The construction manager of the 1960s didn’t have the technology tools we have today to help us efficiently lead the building process from preconstruction through post-delivery. But today’s true Master Builder does. If we’ve learned anything from the past, it’s that a single point of leadership is essential to achieving the challenging mix of efficiency, quality, timeliness and cost-effectiveness that owners demand today. This responsibility falls most naturally to the builder, who is ultimately responsible for delivering the final product.

To succeed, the new Master Builder must lead fully integrated project teams, working closely with designers to ensure that their vision matches the owner’s expectations and budget. Once construction begins, the new Master Builder must remain the hub of oversight and communication, seeing the project through to completion and ensuring that the building performs as expected throughout its useful life.

The time for a better path is here. Today’s technology now helps make the foundational process of building itself more effective and efficient. The new Master Builder is ready and willing to lead the team to an optimum result.

About the Author
Mike Bolen is Chairman and Chief Executive Officer of McCarthy Building Companies, Inc. With over 30 years of experience in the construction industry, Mike joined McCarthy in 1978 as a carpenter, moving his way up through the company to assume the role of CEO in 1999. He earned a bachelor of science in general engineering from the United States Air Force Academy in Colorado Springs, Colo., and completed his graduate degree in guidance and counseling at the University of Northern Colorado in Greely, while on active duty.

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