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February 13, 2012

Expensive Lessons that Teach No One
Filed under: Construction — Tags: — nedpelger

I read an ENR article about some design flaws in the World Trade Center NYC projects adding millions of dollars to the cost. I’m always curious about how those type problems arise and get resolved.

Apparently One World Trade Center will be a 104 story tower developed by the Port Authority of NY and NJ. The future Manhattan skyline is shown below. As the construction nears completion, they realized that a temporary subway station blocks the access for the loading docks into the new building. So temporary loading docks must be built (at a cost of several million dollars) that will be used until the temporary subway station can be dismantled.

Of course, no one takes full responsibility for those type of staging scenarios (and I know they are dreadfully easy to miss) and the taxpayer simply pays more. As I read more, though, that trend seemed to intensify.

The cost for the project increased by 22% to $3.8B USD. A $700M increase in times of almost no inflation seems another bitter pill for taxpayers. One World Trade Center is only 60% leased and the developer struggles to find tenants. Other related buildings in the World Trade Center complex also aren’t finding tenants and the scope of the projects, including the # of stories being built, are getting reduced.

I understand the complexity of deciding the right thing to build. When private developers make those decisions, they risk their future financial well-being on the results. The intensity (and often effectiveness) of their efforts increases as the real possibility of financial ruin looms. While America’s lenient bankruptcy laws allow private developers to take big risks without worry of sending their families into complete destitution, the pain of bankruptcy still deters.

Government entities as developers simply don’t face the same downsides. The decision makers may care intensely, but in the end the agency survives and everyone generally still has their jobs.

In my early days in construction, I remember a couple of my bosses telling me stories that made a surprising point. A bid was won that they later discovered had a substantial downside error. There was a debate about throwing in the bid, but a decision made to just live with the numbers and manage it as intensely as possible. Often those sure-fire financial loser projects turned into winners because every detail was managed so well.

I believe in the¬†efficacy of intense construction management. I believe private entities have a much higher likelihood of managing construction projects with intense levels of efficiency. I guess that’s why I’m a private market enthusiast who owns my own business and encourages other like-minded folks to give it a try.

When we make expensive mistakes (which we all do) at least we tend to learn from them.


July 6, 2010

Management Disaster
Filed under: People Skills — Tags: — nedpelger

You can’t make everybody happy. That’s a truth I’ve seen proved true many times. The folks that try make no one happy. The other half of that truth, though, involves not sticking your finger in some one’s eye on purpose. You can often avoid intensely aggravating someone with just a bit of effort.

As I watch BP and the government respond to that oil spewing hellhole, though, I’m amazed at how little effort has been put into not poking eyes. 20,000 volunteers have signed up to help clean up the oil on the Gulf beaches and have mostly heard nothing. International offers to provide oil skimmers and other equipment tend to go unanswered for weeks.

How can these guys be so bad at managing a disaster?

The basics of management still apply: consider options, make a plan, communicate like crazy, keep checking back on effectiveness, measure results. I’m not surprised the government does this poorly, that’s normal for them. BP, on the other hand, has their survival at stake and should at least be successful in managing their response to this technical crises.


June 28, 2010

Inconceivable! The Management Style of Vizzini
Filed under: People Skills — Tags: — nedpelger

My brother Jim (an electrical contractor and developer in Missoula, MT) and his wife and four young kids are in for a visit. We were going for a walk back to the lake for some swimming and I decided to take the donkey along. I knew the kids would have fun walking with the donkey. TBW warned me it wasn’t a good idea.

Their three year old son, Dutch, kept getting near the donkeys back legs and I kept telling him that was dangerous and to stay away. Then I heard him start to cry and one of the kids said, “Dutch got kicked in the head by the donkey!” Blood was gushing and we did a little Keystone Cops routine till we finally got a car and him to the emergency room for eight stitches. Fortunately he didn’t have a concussion or any more serious injury. I felt terrible for not avoiding this preventable injury.

Jim and Erin were cool, telling Dutch that his hoof shaped scar would give him a great story. He was a trooper through the process and started playing as soon as he got out of the hospital.

For part of the hospital time, I had the two older kids watching a movie with me. They’d never seen “The Princess Bride” and I thought we needed to change that. They loved the movie as did I.

The early scenes with Vizzini managing Fezzik (Andre the Giant) and Inigo Montoya (Mandy Patinkin) reminded me of some construction supervisors I’ve seen. Vizzini managed his workers by:

1. Belittling them
2. Threatening them
3. Ignoring their suggestions due to his own huge ego

When asked about his own intelligence, Vizzini replied, “Have you ever heard of Aristotle? Socrates? Plato? Morons!

If you’ve seen the movie, this short clip of “Inconceivables” will make you laugh.


As you are dealing with people this week, remember the bad example of Vizzini and of me. Take the time and put forth the energy to listen. Question what you think to be inconceivable. You’ll make better decisions.