Houston Feedback (Transcript)

JP Beitler

• Positives – got to see a bit of everyone’s world!! First time. 
• Next – great first step to understand the issues and isolate them. The next step is to come up with realistic solutions; e.g. How can the developer integrate a couple of the value members? Now that each party better understands how the other works can begin developing solution for and with one another. 
• Opportunities – open book model partnership. 
• Challenges – politics is the biggest challenge (e.g. Chicago, broker going down path of least resistance bring their favorites in, furniture dealer needs to make a choice to go to brokers willing to promote the holistic approach – take a position – so if we have a holistic opportunity we need to go to those promoting the concept over the favors). If they believe the benefits ARE more valuable then they will change but politics are the last chip to fall. 
• Personal Goal – happy if one or two of the elements would get on the same page. Someone needs to prove that this can happen – otherwise its all rhetoric. This would be a risk sharing model. Have to tell a new story of why these players are involved in a value network vs. separate. Everyone seems to want to do this. 
• AHA – as a developer often a glorified wedding planner. They bring unrelated parts (different goals and objectives) and bring them together for a final product. All of those parts have not sat down to understand one another; how to work together, help each other and care about it. The developer ends up trying to orchestrate it. So instead of being resistant or competitive.
• Thought Leadership – developing a new risk model that brings players together as a team, sharing risk but with a higher upside. The end-user receives a better product. 
• What are others doing?  Haworth is asking others to take risk to change the model – what is Haworth doing?

Craig Janssen 

• Overview – Rated as a 4 out of 5. Felt that there were some who saw the need for a foundation change and others looking for greater efficiences through better integration. They may both be saying the same thing – however, they are looking at a different context. We may want to decide which strategy to take; foundation change or improving integration. Craig’s table felt strongly that foundation change was needed (Bill Black, Ric Nelson and Marilyn Archer). Foundation change is riskier and will take more time because the root of foundation change is connected to larger social, technological and cultural shifts. He recommends we build that contextual foundation with the core members. 
• Positives – intellectual stimulation, reassurance that others feel the same as he does, network contacts and starting something from a broad base that other narrowly focused groups have been talking about for a long time. 
• Improvements – technology representation, gaining more consensus on the root need, gaining a better understanding of each person and company’s goals for the group. 
• Opportunities – there seems to be enough interest and horse power to make fundamental change.
• Challenges – getting a core team that is on the same page with the basic premise that a foundation change is warranted and needed. 
• Surprised - at some of the negative response when mentioning the inclusion of potential competitors. 
• Craig is interested in continuiing with the group and becoming a potential thought-leader for the technology side (BIM, web tools for clients etc) He is a strong proponent for rapid prototyping and early cost modeling. 
• Craig is fascinated by the similarity in the dialogue about seeking a new model (foundation) for performing arts centers and our conversations. Craig is currently working with Gehry Partners on the New World Symphony project.  
• I would recommend that we find an excuse to bring Craig up to Holland to see want Global Ideation is doing. There are similar cross-overs to what he is doing with Strategic Dimensions. 
• One interesting side-bar – Craig met with his team and began connecting the dots between paradigm changes in Performing Arts, Event stadium and our world and said that their firm could easily find a horizontal differentiator vs. a vertical market differentiator. That distinction deals with understanding the fundamental shift taking place between all organizations and developing a roadmap through it (now a plug for my book – he said its basically my book applied to different industries).
• Thought Leadership – Craig wants to be part of the team that explores the technology platform providing rapid prototypying and job costing.

Ric Nelson

• Observations – Tom’s chart was illustrative of the GC problem. They had one timeline with design, bid build. That was reduced with design-build. Now its been reduced again but there is not time to work out the contingencies ahead of time. They’re being asked to perfrom in 1/3 time – considerably increasing the risk. Ric said the industry needs a better, more accurate means to price a job (do the take offs) quickly. He said we can’t burn up 3 weeks on the front end (like we did for the ABSG project) to vallidate an AI approach vs. conventional. Ric is familiar with Big Picture and said there is too much marketing fluff and its too cumbersome. This tool should be stripped down and presented like a GC presents their data along with the ROI included. (This is the kind of tool that Craig said we should make open and available to anyone). 
• Positives – meeting Craig Janssen, felt was most articulate and learned the most from him. Very impressed with JP and thought that the industry needs more people like him. Jim Oswald was phenomenal and really tied it together. 
• Improvements – felt we needed a more neutral ground and the room itself did not allow much interaction. 
• Opportunities – To take the visuals that Jim Oswald developed, several of the quotes and create a narrative to begin telling the story through different voices. Ric has travelled Europe extensively and they are ahead in so many ways he is surprised that we don’t hear and see more of those solutions in the states. 
• Challenges – the CFO is the key leverage point – the one that ties the capital and expense sides together. 
• AHA – Franco’s adjustment to take a less direct approach to stating the problem and turn that into a more educational effort or statement of opportunity.
• WIFM – Ric wants to be part of an industry change that helps the planet, creates a new economics of scale and propels us into the next level which is a global solution. 
• Thought Leadership: Ric wants to be on the team that crafts the financial model and metrics into a message to the CFO.

Jabir Al-Hilali

• Overview – Rated as a 3, good start, a little rehash, would have liked more AHA moments. 
• Positives – felt everyone was on the same page even with each area of interest – a better integrated model. 
• AHA - from Craig Janssen – make public that you are doing and it takes away the lower end competition. 
• Improvements –

  • If we accomplish everything on the list it would still fall short of KPMG’s objective. 

  • Need other disciplines even those outside the core industry. 

  • Tax benefit for specific design approaches, furniture etc. that are not being passed along. Expense, acclerated depreciation and standard depreciation. 

  • Embedded cost review (a portion can be expensed by the client). So cost is less. Cost segregation is key. Prorated for tax purposes. 

  • Energy conservation. Lighting – tax benefit designer can recoop.

  • SRES – Stratetic Relocation Expansion Services (utilities, # of emps etc.)

• Opportunities – many areas beyond the control of Arch. 
• Challenges – may recommend a site that is contrary to the broker’s interest
• Climbing uphill - KPMG is able to develop collaboration when they sell it but not a part of the up-front process.
• Observation – real estate is evaluated in pre-tax dollars but we need a model to view it in after-tax dollars. Hard to boiler plate because after the pro-forma each company has their own tax position to filter it through. 
• Thought Leadership: Jabir wants to be part of the team that develops the financial model (possibly the metric too).

Terri Stewart

• Overview - High-level group representing entire “chain” of players involved; investor, developer, broker, architect, consultants/subtrades, contractor, vendors – SVP from Turner Construction, President of Haworth, Gensler principals, representative from KPMG, VP from Transamerica – good networking opportunity.  Group expressed that architect should be the lead in the process but that currently the broker is acting as the go-between with the client.
• Positives - Impressed by open candid conversations  Well facilitated by Jim Oswald.  AIA's efforts with Integrated Practice fits well with the direction of the team.  Felt they could make a good contribution.  Not a lot of “fluff” discussion dealt with substantive issues and covered the spectrum of players.  The discussion included the fact that many other groups are trying to “fix this process or subsets of the process” and how to integrate and/or tag on to these so duplication of efforts is decreased.  Felt that this could make a strong contribution by connecting the different efforts and making room for their participation.
• Opportunity - picking the right people is key.  The group was well selected in terms of skills, knowledge and transparency.  Open dialogue and debate will be key to getting to core issues.
• Challenges - creating a platform for all of the different conversations to fit together.
• Thought Ledership: Terri said that AIA would be interested in leading the dialogue on integration. 

Gensler

• Dean Strombom and Marilyn Archer
• Overview - broad representation and diversity.
• Positives - Everyone brought a lot to the table.  The different prespectives shed new light on the process. 
• Opportunities - to work with a core group to wrestle down the key issues, frame the dialogue and reach a critical mass before going out to the industry.  Too many previous industry wide events get diluted before they are really ready for a broad debate. 
• Improvement - refine the mission and values.  Good discussion but these were not tied down at the end of the day.  We need to add an investor category. 
• Hopes - to see this become a Global Idea and not just a consortium.  Dean and Marilyn feel there is an opportunity to transform the model and enthusiastically support that aim.