From the Chairman: Offer program management services?

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Design firms may have a niche to fill in this area. After all, you can do it better than a dispassionate program manager.

Architects and engineers have long complained about their relationships with program managers. “They challenge us on our fees. They don’t understand the value we provide. As owners’ representatives, they don’t do very much. I come away from a meeting, and it seems as though they have distributed every task to someone other than themselves.”

Sound familiar?

Look at the origins and processes of program management as a professional service offering. I’ve seen two strong needs for a seasoned professional: 1) an owner or tenant, constructing a building or improving leased space, who does not have the expertise in-house to manage a construction team; 2) a corporation that has assembled a large bureaucracy to manage the procurement, design and construction of space, and then oversee its management and change over time.

Large real estate organizations, like CBRE and Jones Lang LaSalle, skilled in brokerage and facility management, saw a need among their clients for this service. They acted as an owner’s representative for individual projects. Eventually, they began to take over entire real estate departments from large corporations, proposing to reduce costs and assure professional staffing in each role. After all, no corporation is in the business of procuring, designing, constructing and managing real estate, and if it’s not part of the core business, why not outsource it?

These entities claimed they could achieve highly professional results, lower costs relative to an in-house department, as well as in construction, by using their broader leverage. And, relative to any other entity (like an architect, engineer or contractor), they maintained that they could remain unbiased with no conflict of interest. Their power grew to the point that architects and engineers feared that they would be “black-balled” if they entered into competition with these entities.

After all, architects had gained a reputation for being irresponsible with budgets and schedules, concerned for “design” above all else. Contractors were just builders, lacking the sensitivity to and engagement in the full range of issues an owner is solving for. The reality is, however, that people from these same architects and contractors staff these entities.

So, should an architect, engineer or contractor consider entering this field? At this time, to try to compete with the large, established practices like CBRE and JLL with their national and international networks, scale and capabilities, would be extremely difficult. There are, however, market niches where an architect or engineer with a definitive expertise, should be in this business. Why? For the very same reasons that others entered the field. An owner considering doing a on-off building or tenant interior who doesn’t have in-house design and construction expertise is well served by someone highly knowledgeable in all aspects of bringing a project from concept to occupancy. Many architects and engineers live with their clients from the time they identify a need to the day they occupy or begin to use a facility, and often many years after.

Specialties such as retailers that either acquire land and must secure entitlements, site engineering, design and construction, or even simply lease and build out a space in an existing retail building could be well served by someone outside their own organization.

Many years ago, the firm I was part of took on this entire array of services for a healthcare provider to build what they termed a “doc-in-a-box,” which they planned to replicate. We provided a turnkey service, managing everything from site development and entitlements, through design and construction, right up to supplies in the drawers like Band-Aids and rubber gloves. Why not? The healthcare provider had never done this before, had no expertise in-house and no desire to staff up.

With so much change in the way services are being offered (the healthcare industry, data centers and other critical facilities are good examples), I believe the opportunity to enter the program management field is strong. Select your path carefully, research the process being used today to go from concept through the lifecycle of the use of the facility, and design a service offering that will achieve a better, more creative and cost-effective design solution because the process is being managed by an architect or engineer, rather than a dispassionate program manager.

Edward Friedrichs, FAIA, FIIDA, is a consultant with ZweigWhite and the former CEO and president of Gensler. Contact him at efriedrichs@zweiggroup.com.


This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1079, originally published 11/10/2014.

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