Transforming Your Office While Protecting Your Bottom-Line

By Robin Weckesser and Bob Garcia

It is critical to engage the right specialists to customize solutions, mitigate risks, and optimize value, since hundreds of thousands of dollars lie in the balance.

SAN FRANCISCO—In the Bay Area and beyond, companies are realizing that the workplace environment can have a significant impact on recruitment, retention, and productivity.  They are also learning that the workplace strategy, design, and construction process has become more complex and sophisticated.  Accordingly, it is critical to engage the right specialists to customize solutions, mitigate risks, and optimize value, since hundreds of thousands of dollars lie in the balance.

Before making quick decisions based on what’s trendy versus what best meets your needs, CEO’s, CFO’s, and corporate real estate executives are advised to assess the different routes toward workplace transformation.  By performing this due diligence, companies will discover the advantages and disadvantages of each approach, including the roles played by a project manager and construction manager.

Increasingly, project managers are being engaged to oversee workplace solutions, but every project is unique, and companies need to understand what resources are available and how best to utilize them.

A good place to start is by examining the difference between PM and CM.  Project managers bring a broader, strategic perspective to the overall process.  PMs not only understand design, construction, engineering, IT/AV security, and furniture procurement, but also the business implications of commercial real estate projects. They view solutions in a larger context that includes lease terms, business objectives, and other value-added client services.

Construction managers, key to the workplace solutions team, are specialists trained to manage the construction process, from pre-construction to close-out and move-in.  As such, CMs help ensure projects are delivered on time and on budget, and an experienced, knowledgeable professional is obviously required to perform this role.  However, since most high-dollar construction decisions have far-reaching strategic and business implications, the PM is better suited to take the lead. In this light, it is useful to regard CM as a subset of PM, and you may well find that the ideal approach is when the PM and CM functions are integrated.

Roadmap toward Success with Integrated Project Management

• In-house. Some companies believe they can save money by managing the workplace development process in-house. This may work for projects that aren’t large and complex.  But for more substantial and complicated assignments, companies rarely have the expert skillsets and sufficient resources to manage projects in-house.  Also, consider the time that would be diverted from focusing on your core competencies—and the guaranteed ROI you will realize with the right consultants in place.

• General Contractor or Architect. General contractors and architects are obviously also vital players on the workplace solutions team. But are they the right people to manage the process?  Often, conflicts of interest arise involving changes, costs, and overruns if you don’t have an objective third party providing oversight and a strategic perspective to protect the client’s interests.

• Real Estate Firms. Traditional transaction and project management real estate firms are worth considering if you need integrated brokerage and PM assistance.  If not, the PM services from real estate firms may not be their primary focus. What’s most important is which consultant is the most specialized and experienced in PM and CM.

• PM Firms. So, that brings us back to independent project management firms. The advantage of such groups is they provide objective and comprehensive project oversight from start to finish and typically ensure an ROI of 70% to 100% or better. This starts with strategic planning and includes negotiating the tenant improvement allowance as well as selecting and managing of all vendors, all budget items, and all phases of the assignment (see below).

Again, this begs the need to consider an integrated PM firm that has the requisite experience and very strong CM and design components.

Trust and Full Disclosure

How can you optimize prospects for a successful outcome?  It starts with a client-relationship based on trust and openness.  Companies should regard the client/PM relationship as a partnership and share their true budget numbers from the start.  Armed with a thorough understanding of the project requirements and the budget, the PM can provide realistic plans and deliver optimal value.  If the client is not forthcoming with this critical data, the consultant will be at a disadvantage, the partnership will be compromised, and results will be diminished.

Also important to project success is that a realistic budget is established at the project’s onset.  The “all-in” budget will allow the PM firm to carefully monitor the design and assure its alignment with the budget.  To prevent budget surprises, the firm will refine and manage the project budget, including the entire cost spectrum:  permitting, design, construction, IT/AV, security, furniture, relocation, and other related expenses.

Overall, the PM model, including the CM’s involvement, brings value through a comprehensive approach that involves four project phases:  real estate/property search; preconstruction, programming, and design; construction; and close-out/move-in.  The steps in each phase are outlined below.

Project Phases

Real Estate/Property Search

• Analyze the building or property to determine suitability for client’s needs.
• Work with the client to establish a realistic preliminary budget.
• Review the lease “work letter” to assure that no language restricts the client’s intended use for the building or property.
• Review the lease to assure an adequate tenant allowance and no financial restrictions that will negatively affect the project.
• Review local, state, and federal restrictions, limitations, or permitting issues that could negatively affect the project.
• Help negotiate lease terms that are favorable to the client.

Preconstruction, Programming, and Design

• Help determine which project delivery method best fits the client’s needs: design build, design bid build, etc.
• Help select the design team that best matches the client’s needs.
• Help select the construction team experienced in building similar projects.
• Help organize the client and their teams to communicate needs to the design consultants.
• Oversee design to assure it addresses the client’s needs.
• Access design elements that may adversely impact the budget.
• Monitor design elements and their effect on the schedule.

Construction

• Protect the client from unwarranted schedule and budget changes.
• Represent the client at all project meetings.
• Oversee the change process.
• Monitor the submittal process to confirm that installed products meet the client’s requirements.

Close-out/Move-in  

• Coordinate the move schedule and move resources.
• Assist in furniture procurement and installation.
• Assure that client requirements are being met in the commissioning process.
• Confirm close-out documentation is organized and complete.
• Confirm punch-list completion.

Closing the Deal

An independent PM firm is well-positioned to provide conflict-free services that incorporate all the steps outlined above. But all project managers and construction managers—like all projects—are not created equal.  How can you find the right fit?

First, you should take into consideration that as technology continues to advance, the real estate industry will continue to evolve, and you’ll want to partner with a firm that is cutting-edge and has a long-term view… but also one that has good, old-fashioned people skills in listening and communicating.  So check references and track records. View sample projects.  Make sure there is a good comfort level.

After enlisting the firm, it’s important to collaborate and let the PM, often in concert with the CM, do their jobs.  When the client and the consultants are on the same page, the result invariably is a successful project that elicits the satisfaction of staff, improves the recruitment and retention of talent, and earns the stamp of approval from the CEO and CFO.  It’s win-win-win.

a3 Workplace Strategies, Robin Weckesser, and Bob Garcia

Robin Weckesser is the President and founder of a3 Workplace Strategies, a workplace consulting group based in San Jose and serving companies throughout the United States and worldwide. An industry pioneer, Robin specializes in workplace design, process alignment, project implementation management, corporate facilities management, and architecture.

Bob Garcia is a Senior Project Manager at the firm with 35+ years of experience and specializes in system design, resource management, risk analysis, budget management, and estimation.

a3 Workplace Strategies provides a full range of project management and facilities management services, including strategic planning, change management, site selection, design, construction, and relocation oversight, space programming, and open office/collaborative environments.

For more information, visit a3workplacestrategies.com or email Robin at rweckesser@a3workplace.com.