Transcript: Death to Value Engineering

something that I'm dealing with right now as we speak, it's tying in the amount of time it takes for the iteration within even space plan reviews, schematic design, DD, and in making sure that those sign-offs are taking place, number one. But in addition to that, the design is incorporating any ad hoc requests that weren't picked up during whatever programming exercise. And that's another big part of the waste. I mean, the biggest waste we always had in design is rework, right? So we have to rework something that we've taken a lot of time on and generate a lot of direction towards and invested just time, just pure budget to rework.

Well, let's not talk about VE, right? Value engineering, that's a bad word. We absolutely, now you've really said a bad word. That's the worst word in my vocabulary. And that's exactly what over the years I've said I'm trying to remove is value engineering.

So there's just no such thing. Value engineering basically to me is just cutting scope. So you get to the middle of the project or somewhere along the way, and you figure out your budget is not working very well, or you figure out something or whatever it is. And then someone comes along, usually the owner or a CM, and they say, well, we're gonna value engineering this. And they say, well, you've made all these decisions and look where we are.

We look at the problem, we're over budget or whatever the problem is. So we're gonna value engineering that. The process that we're talking about is exactly what you've brought up, is that we're removing that buffer, that need to value engineer something after a post, after the designs have been made or decided on. Number one, we're trying to get more people involved earlier on. Number two, trying to make it more transparent what we're doing.

The idea is that we're trying to bring the value again back to the project by understanding all the parameters earlier on. Hello and welcome to the Constructor Podcast, the future of the built environment. I'm your host, Brittany Campbell Turner. And this podcast is dedicated to helping property owners have certainty in their decisions about their construction projects. We talk about fostering trusting relationships, help you to understand how to lower risk, be under budget and on schedule, and most importantly, exceed your end users desires.

I wanted to let you guys know that I'm looking to add to the Constructor team. I'd like to add someone who is proficient in graphic design and report generation. If you'd like to partner to create a report, we're already spearheading that effort and it would be great to have someone support that project. Reach out to me at britney at instructor.com if you're interested. In last week's episode, we celebrated episode 100 where I pulled together a collective of episodes where my guests talk about effective team building.

The story of team, of connection, of intention, that's what's most important. When these are clear, you can take the next steps about budget and systematic experiences and make decisions about those much more easily. You have to get the people side right. In today's episode, we're starting our recap of the 20th annual Lean Construction Institute Congress. I had the pleasure of connecting with people from all stages of the Lean journey and even had the opportunity to present this time around.

In today's episode, you'll be hearing from Bruce Cousins, managing partner at SWORD Integrated Building Solutions. We had a casual conversation about his focus on the business of design. Design is a complex and iterative approach to collecting specifications of building system components and detailing the vision of a structure meant to be constructed. It's a little bit like taking a train. You should know both destination and the direction you should be taking before you start on the journey.

You should know the fare, you should know how long it takes to get there. Many of us come together to reach a unique destination, but we have to figure out which station we're leaving from. Bruce shares his train ride with us. Bruce talks about his journey and how to improve last planner through better design management, listen in. Bruce is the CEO of the LCI Congress in Orlando, Florida, the 20th Annual Congress.

And I'm sitting here and I'm talking with Bruce Cousins. He is with SWORD Integrated Building Solutions. So Bruce, welcome to the Constructor Podcast. Hi, thanks. Great to be here and good to talk to you today.

Yes, happy to have you. I am really interested in what your journey has been to this point and we're gonna get into a little bit about design for the audience, but you've had a very interesting journey, background essentially doing design, running design company. Could you just share with us a little bit about that? So my background is I basically started as an architect, getting licensed, going through registration, doing all the things that one does to do that in the beginning. And then graduated from UC Berkeley, an architecture school, got involved with urban design, Newtown planning.

I moved to Colorado from the California area. We worked a lot on mixed use projects in the mountains of Colorado, which people were building hotels with a lot of retail underneath and the variety of things that were creating the villages of the mountains. I joined a firm that did a lot of the base land planning for Vale and Keystone and a variety of the other large mountain resorts. So in those early days, we were basically designing and learning a lot about the seasons that we were designing for.

We were kind of constrained in our timeframes and schedules and so on, changes in the season. And so of course you can't build in the middle of winter. What that sort of got us started with is fast track design or design build versus design bid build. And so from the earliest days of my career, I was doing those kinds of projects, which encouraged a couple of things. It basically got me a very specific focus on understanding how my designs, which were always looking at a design that was appealing to the user and user-friendly and all the kinds of things that we do as architects to meet our needs, besides the life safety things in the mountains, sliding snow off the roofs.

That's gotta be so fun, way different from Chicago. Yeah, well, not so different. So thinking about all the parameters that go into a design early on and making sure that they get into the design, that the costing aspects of that and the bidding aspects, since we are participants with our builders, we were doing really kind of an integrated product in the early days. In those days, what we did is what we called a order of magnitude pricing. So what that meant was that as a project got more and more clear in its direction, we could begin to understand and explain the costs of those things.

And that's why we called it order of magnitude. And a lot of things then would end up at the end of that process as we finished DDs and CDs and all the different division sections of being a much more, what I'll call a reliable number that we could depend on. And what we ended up doing was working with our contractors to get what we call very good conceptual estimators, people who could actually understand that this was the sort of the level of finish and other criteria that they could decide how to actually estimate to a more accurate level.

And so what ended up happening is after doing those kinds of projects for many years, I also did a lot of resort, large scale houses up in those areas, which were basically, we call them, you know, they're princes houses for princes. And they were commercial grade housing, large scale, high end finishes, all those kinds of things that we really like as architects. Yes, of course. In locations that were really nice. And those firms, I started off with small firms, we grew them, one firm we had was 40 people.

Another firm after I left that firm, basically five or six people. Then what we did, what I did in my career direction was to actually implement, we called it 3D modeling in those days, BIM. And what that meant was we were trying to understand how computers could help us be more efficient, how computer assisted drawing and drafting and so forth. And in those days, AutoCAD was the big gorilla in the market, 2D CAD package. But I said, well, you know, look, our architecture is 3D.

I'm really a 3D guy, I've always drawn in 3D and I still do. So we really implemented 3D CAD in the earliest days from those things. So what we ended up doing, as I look back on it now, 30 some years later, basically began finding all these sort of links to what I'm doing today. And what that means is that I understand the business side of it. My understanding the business side, it means I'm cognizant of how billings go and how we make billings work and why, how we project a budget for a job, how we can be more precise with that.

And at the same time, hit our targets with meeting the client's needs, fulfilling their needs as a program and so forth, defining their needs more carefully and so on. And so then that's another thing that BIM actually did is we began understanding it was really much more transparent for our customers on how they could see their project early on and make decisions. And so we were refining sort of that focus of our projects from the earliest stages, right? And then what happened was one of my customers was one of our big builders.

He said to me, well, why don't you just come and work for us and set up our BIM around the country? Nice. And so we did. I didn't really sell my company to them. What we did is they hired me personally, and then we could do our arm's length with them with my old company.

Okay. So it was kind of like we had our built-in staff already and everything was ready to roll. So what ended up happening was I got involved with that company, which was White's Construction in Des Moines, Iowa, but we had nine offices around the country. So we set up the BIM process in each office. But my focus in that was actually not to set up BIM to do modeling.

My focus was to basically set up BIM to do model management because we felt that the documents, that really was sacred and we weren't gonna change anything and we didn't need to rebuild. Sometimes if we did rebuild the model, we build it for a construction model, but we would actually send that out. We would actually outsource that to either India or some other parts of the world, a lot of them in Romania and different things where we could get a fairly inexpensive construction model. So learning over all these years has been really a matter of taking different technologies, taking different ideas, and then focusing all those ideas into a more efficient way to do things.

And at the same time, delivering more value for the customer, whether it's the customer in the construction company or whether it's the customer in the design side, receiving our design work and so forth. Now, as I've gotten into my later years, we basically have ended up, we're working with our construction through the Lean Construction Institute and that's why I'm attending here. And I've attended for the last basically almost 12 years at this Congress, started off as 80 people. And now as we saw today, it's 1500 people.

One strong. And it's just amazing to me to see. But the exciting thing about that is that everybody else is finding the same path, right? We're finding a way that we could improve our processes, we can make things more efficient, add more value for our customers, and just in general, make even life better for the people actually doing the work, both on the construction side and on the design side. And so because of my experience in the design side, I really have been focused in on the idea of implementing Lean and Last Planner and all the Lean tools in the design phase.

While I have used them in the construction phase, that's one of the things our company does now is consult and assist companies in building, setting up project teams, IPD, integrated project delivery, the variety of things that we can do. We can do tack planning and Last Planner. And so one of the tools that's very widely used in this industry that we're in, the Lean Construction Institute, is the Last Planner. And the Last Planner is a great method of thinking about things, but it's only one tool.

We have lots of tools. But the focus that we're just working on, Glenn Ballard was one of the original fathers of the Last Planner system. And through P2SL, which is the research institute at University of California, Berkeley, they basically every so often have a look at it and say, how can we improve it? So this is right now a 20-year-old that they've come up with. And he and his colleague at P2SL, Iris Tomlin, basically had a paper about the current state of Last Planner.

And so what we're trying to do now is take that idea of using that current state and say, where are the things that have changed? Or where are the things that need improvement? We found that with about 50 senior users, we had a couple of workshops and we kind of focused in on the things that were the most important. And we came up with basically five different areas to improve that we are really pursuing now as a group. And without going into that detail of each one of those, they basically include the metrics, how our metrics are organized, what do we use, percent plan complete, are there other metrics now that are appropriate to be used from the original edition of Last Planner?

We also do location-based planning, which we've added a piece that people are investigating location, because that's now such an important part of tact planning and the kinds of things that we're doing with that. And then we've basically looked at sort of the value side in the beginning of a project. How do we create psychological safety in a project? What are the elements of that that allow people to talk about how they've made mistakes or if we wanted to change something or improve it, are they given freedom to ask questions and improve the process as we go through?

So we're looking at a variety of those things. And then what I've been focusing in on is the design phase. Designers haven't jumped on the bandwagon, let's say. Where we think the theory about it is that one, it's kind of coming from a top-down standpoint. So either owners or general contractors are telling designers that this is one of the ways that we'd like to operate.

Either the designer says, well, wait a minute, I've been doing this for so many years and I have my own sort of methodology. That's one side of the story. The other side of the story is designers in general, design one is iterative, meaning that people aren't goofing around. People are studying different options. I think that the criticism on one side is that the contractors think that that looks like goofing around.

And I think without that sort of dialogue during the design phase, they don't learn that basically that's a matter of iteration, right? We're really iterating to find the best solution. And those iterations are valuable. Now, what happens when we're doing last planner is that last planner is really focused originally on task management for sequential projects. And what that means is that sequential projects, if you're building a building, you're gonna dig a hole, you're gonna put a footing in it, you're gonna put some steel in it, you're gonna do some stuff and you're gonna make a foundation, right?

It's very sequential, right? And basically design is not sequential, as we just said. And because of that, it has different needs. And the design industry in general has adapted themselves to things that they can do to make their work easier. So predicting work tasks, for example, in the beginning of a project, a lot of them use a waterfall process.

And so it's very linear and just sort of the old CPM approach. And that hasn't worked very well either because they really don't know what they're talking about. They build in buffers and they build in buffers for safety. You don't wanna tell somebody you're gonna finish in a certain amount of time without having some general idea that you can, well, we can do that in that amount of time. But maybe it'll take us half that amount of time or even a third of that amount of time.

But I don't wanna tell anyone that I'm gonna make those decisions until we actually need to. There's the layer of the approval process. Yep. Right? And actually that's something that I'm dealing with right now as we speak.

It's tying in the amount of time it takes for the iteration within even space plan reviews, schematic design, DD, and in making sure that those sign-offs are taking place, number one. But in addition to that, the design is incorporating any ad hoc requests that weren't picked up during whatever programming exercise. I can see what you're talking about for sure. And that's another big part of the waste. I mean, the biggest waste we always had in design is rework, right?

So we have to rework something that we've taken a lot of time on and generated a lot of direction towards and invested just time, just pure budget to rework. Well, let's not talk about VE, right? Value Engineering. That's a bad word. We absolutely, now you've really said a bad word.

That's the worst word in my vocabulary. And that's exactly what over the years I've said I'm trying to remove is Value Engineering. So there's just no such thing. Value Engineering, basically, to me, is just cutting scope. So you get to the middle of the project or somewhere along the way, and you figure out your budget is not working very well or you figure out something or whatever it is, and then someone comes along, usually the owner or a CM, and they say, well, we're gonna value engineering this.

So really what they're gonna say is, okay, you, I say to them, okay, you can make a better decision than I can. That's what my job is, is to make a decision. And they say, well, you've made all these decisions and look where we are. We look at the problems that we are, we're over budget or whatever the problem is. So we're gonna value engineering that.

The process that we're talking about is exactly what you've brought up, is that we're removing that buffer, that need to value engineer something after a post after the designs have been made or decided on. Number one, we're trying to get more people involved earlier on. Number two, trying to make it more transparent what we're doing. It's not just about IPD, by the way. There are other ways we can do that, where we can actually do it without a full IPD approach, even though that's probably the best.

But the idea is that we're trying to bring the value again back to the project by understanding all the parameters earlier on. Now, a lot of our designers feel that that's limiting. Well, if you're a designer, constraints are what makes design work. That's the challenge as a designer that you wanna just say, well, we need these constraints. We have the constraint of cost, we have a constraint of schedule, we have a constraint of owner, safety, all these different things that we build in that are all constraints.

And so we're removing constraints, but at the same time, we're recognizing constraints. We're acknowledging them early, early on. In a recent project we did, we were designing an air and space museum in the Colorado area. We didn't ask everyone. I'd said, well, let's not bring in the civil engineer yet.

Let's go to the airport and ask the airport what they thought about where we should locate the grade for this, because of the FAA, you can only have a certain grade above the runway. So we went to the airport and they told us an answer and it was the wrong answer, surprisingly enough. Later, we had to redo all of our work to lower the building because they had told us the edge of the runway and it's really the middle of the runway. So we ended up not having the right person at the meetings at the time.

Our civil engineer would have figured that out had they been there and so forth. And it just is a good lesson for me. And we make those kinds of decisions all the time. I mean, that's not an uncommon challenge, but the great news, by the way, about BIM was with the BIM model, we're able to make those adaptions very quickly because we're maybe moving things around within the model. Thank you for sharing about your background and the holistic approach to how you approach management of design and the iterative approach that we take to design.

And also the fact that designing two certain specifications can sort of streamline that when you know as many as you possibly can collect at the beginning of the project. So I think we've established that really well. I have two questions and you can separate them how you'd like BIM execution plans. How do they layer into what you're learning about and researching right now? And in addition to that target value design.

I love it. BIM execution plan. Okay, so that to me, I preach all the time that the BIM execution plan is the backbone of planning our work for design. And so what we talk about is that we wanna sort of align all of our outcomes. One place we can do that is in the BIM execution plan because what we can do, and we did this when I was working with Turner construction is we basically work on the idea that we have certain fixity.

We need to fix certain parts of the plan by a certain time so that we can do either let's say vertical loading. So we understand the foundation if we're doing that or we can do other kinds of things that require a certain fixity at a certain point. So then more people can make decisions. They can begin to guess where that comes from. The BIM execution plan.

I have some great graphics on that where we basically flow the work based on the BIM execution plan. People look at the BIM execution plan and it just kind of throw it away and it becomes a commodity. In my world, the BIM execution plan really guides all our decision making in terms of the detail of how we're gonna actually deliver our project. So target value design is again another great tool that we've come to look at in the last 10 years or so. And really what again we're doing there and we started this with, we were doing a headquarters building for Google.

So what we do is we have a huge workshop in the beginning of a project and we start defining all of our objectives and all our values. Not just the values of how much something's gonna cost, but what we're trying to achieve. Are all the products that go into this for construction gonna be green? Google had a very specific amount that they wanted for green. It was just quality of life of the user.

Are we gonna have lighting that really benefits our users in our spaces and how are we gonna make that work? Are we gonna have minimum earthquake challenges? You know, how are we gonna do that? So on and so forth. So we define all the values in our target value design process and then what we do is we take that next step and we basically take those values and we subdivide them into the cluster groups for each area.

So we have advocates for each area of skin of the building, the enclosure. We have HVAC, all the building systems, interiors, furnishings, FF&E, the whole group, everything that's gonna make up that building. And then we have advocates and some advocates crossover between groups and so on and so forth. First we define the values in the target value design process and then we basically implement it using that kind of an approach where we basically have advocates and they each have their own budgets and those budgets are then coordinated with each other and then we can start balancing the budgets.

Now that's on a big IFOA type project, tri-party agreements, all the fancy stuff, but you can do the same thing by just taking that step, that target value approach. Lean Construction Institute really has just created a book or two on that. We have actually now a course on that. I just taught that up at the University of Washington in Seattle to their facilities people and their big takeaway from that was, look, we now know how to talk to our administrators, our budget people who are working with the legislature, who's figuring out our budgets for our facilities and so on and so forth.

It's really a big idea that's originating from the Lean Construction Institute. As you're doing your research, are you investigating the pitfalls that we might be facing in preparing BIM execution plans and doing the process of target value design because we're improving lean now at this point, right? What the baseline standard has been. Obviously these things have been layered in over the years, but people are taking them on and maybe doing them well, but what's the feedback? A couple things started that process for the BIM execution plan.

University of Pennsylvania did a big book on it. Would you say that it sort of originated there? But I'd say they were one of the leads. Then what's happened now is that there are other, including the agency, for example, a lot of agencies have created their own BIM, lean integrated processes, and they have requirements now that you have to come up with goals and conditions of satisfaction and all these kinds of things within the BIM execution plan too. You integrate the pieces and the parts and have taken that Pennsylvania, probably two or three others, I was trying to think of some of them, that basically have taken the BIM execution plan, originated it as a template, now are using it in administrative work and making policy and actually creating that as well as delivering projects.

And we used it in the, as I said, in the Wheelchair Grand Project when I was working with Turner to create our deliverables for and understand what the alignment of permitting was, for example, what the alignment is for, based on the idea of fixity, when we need to think some, when we need to understand, okay, we need now to have this kind of information that needs to go into this process, and it's prioritized, whereas historically it hasn't been. It's been just kind of random. Well, we'll just do this and we'll do that.

By the way, that reminds me that the old segments of design, which the AI has had since the 1900s, is basically, you know, schematic design, design development and construction documents, were very valuable in those days, but nowadays with BIM and the other things we're doing, they're sort of out the window to me. I'm so glad you said that because I believe that as well, especially with the iterative process that we're going through and layering in 3D. It's prioritizing physical locations now. Well, we call it the data pool.

I call it the project playbook. So what we try to do is we put within the BIM execution plan is just one piece of the project playbook. What I mean by that is that if you're trying to create a process, the content of the playbook has the BIM execution plan, it has the lean development plan, it has the building program just in general, and the standards and the things we want to accomplish with that, and the owner brief, I call it, which actually in San Francisco's airport, they have a phenomenal owner brief that was built by Gensler within their own group at the airport.

And then that basically gets into the design playbook, I call it. And so we then have a package of information that's done way before. And from my old days of architecture, there's a great book out there by Bill Pena, William Pena, who was one of the starters of Cottle, Rollit and Scott, CRS, they call it the CRS method. It's called Problem Seeking. And Problem Seeking was my way of saying that we want to look problem seeking before we do any problem solving.

Yes. And most typically what happens in design, whether it's the engineering side of it or the architectural design, designers want to jump off and get going. We're going to get full speed ahead before they really know all the parameters. And that's what this problem seeking talks about versus problem solving, right? And there's two distinct ways of understanding where we are with this information.

So we create this project, this design playbook, and then we basically have these topics. And one of the basic ideas of the Lean Construction Institute is optimize the whole, not the parts. And so that's really what we're trying to do with this. And then the next step is we create basically the build playbook. And the build playbook has really done sort of a backwards look at stuff, right?

And maybe this is where your blockchain gets into that. Enter blockchain. So there you go. This is wonderful. Just for the audience's understanding, Bruce has a PowerPoint slide opened up to share with me.

I wonder, Bruce, would you be willing to share this slide or some version of it with us so that we can, I can post in the show notes or something for this interview? Yeah, we use a level of development a lot in the BIM execution plan. So this is the Wilshire Grand. And you can kind of see here, LOD 100, LOD. So the secret sauce of our BIM execution plan is the level of development, how that works.

And so then that we can align, you can see here how in this graphic, we can align with the different aspects, the different parts of the job, and the different colors basically are the detail needed for delivering those pieces. I must say, looking at this graph, and I'd love to share this too, literally mind blown. Like this right here, it makes a lot of sense. You heard both Bruce and I talking about the Lean Reshaping Design document. Look for this document in the show notes.

So now let me show you the next one, and you'll even be more mind blown, I hope. Then basically what we do is we then align our pieces and parts again. Design decision alignment. And this is really based on a lot of things, but one of the things that we've focused in on improving Last Planner, if we get back to that for a second, is the idea of using Agile and the Agile methods, Agile Kanban methods, in terms of the day-to-day work. Once we're in the day-to-day functioning, we can put up our information, what's to do, what do we need to do, what's in progress, what are the gateways, where we can figure that out, and so forth.

I consider it kind of like a soccer game where you're playing all over the field. It's not like football, which has set plays, but soccer is much more interested relative to the Agile nature of the thing. You have set plays, but at the same time things change. It's a very mobile environment, right? But at the same time, you always see the goal.

You always see the other team, you know who's who, and so forth. And that's really what the Kanban methods does with us for the work environment, is it manages how we're managing our projects with a visual nature. Very cool stuff. Well, Bruce, this has been really fun, just chatting with you. Is there anything else you wanna share as a follow-up to what we've spoken about?

Gonna be doing a book on design management and design thinking over the next few years. And I've actually done a piece of one before, which we were funded for the DBIA, the first version of their design management book. That was done 10 years ago or so. And so now I'm ready to sort of jump in and take these ideas that we've talked about today and actually create a new book. That sounds exciting.

Sounds like a lot of hard work. It is. I'm not gonna push you for a timeline, but I would love to talk with you about it when you get to that point and you're ready to think about release. Hearing it first here tonight. I've told a few of my close colleagues, but this is now public.

I'm grateful that you were willing to share with us. Well, with that, thanks for sharing. And is there any other way you want people to reach out? Bruce Cousins, for more questions, certainly just email brucec at sword.build. LinkedIn, you can get an idea of who I am and so forth.

I've written a few articles for that. Also Lean Construction Blog. I've written quite a few articles over the years for that. I'm doing another one right now on this exact subject, business of design, lean and design. Awesome.

Thanks so much, Bruce. Thank you. Optimize the whole, not the parts. If you liked this episode, find out more in the show notes at constructor.com slash Bruce Cousins. If you learned something valuable in this episode, share it with your friends and colleagues.

You can also let me know if you enjoyed our discussion by connecting with me on Twitter at Brittany underscore CT or find me on LinkedIn. You can also email me at Brittany at constructor.com. That's B-R-I-T-T-A-N-I-E at constructrr.com. Next week, we'll continue the recap of the 20th annual Lean Construction Institute Congress. Don't forget, if you haven't subscribed to the podcast, do so at your favorite podcast player.

I look forward to continuing the journey with you next week.