CII CMAA Best Practices Best Practitioners

CII – CMAA Best Practices – Best Practitioners Wayne A. Crew Director, CII CMAA 2010 Owner’s Forum Atlanta, GA • May 4, 2010

• A consortium of leading owners, contractors & suppliers, and academia working to improve the constructed project and the capital investment process. • An organized research unit of the Cockrell School of Engineering at The University of Texas at Austin

History • Established as a recommendation from The Business Roundtable Construction Industry Cost Effectiveness (CICE) Project to address: – construction research – fragmentation of the industry • Founded in 1983 by 28 companies; now over 100 members. • First to bring research to the engineering-construction world. • First owner-contractor-academic research collaboration for the constructed project.

Purpose To measurably improve the delivery of capital facilities. Mission • Enhance business effectiveness and sustainability of the capital facility life cycle • Expand the global competitive advantage of its members through: – active involvement and participation – effective use of CII research findings, including CII Best Practices.

CII Principles • Place a premium on safety, ethics, continuous improvement, and leadership. • Owner/contractor member balance. • Promote a high level of knowledge transfer. • Provide leadership development through member participation. • High member involvement; small professional staff.

Owner Members Abbott Air Liquide Air Products and Chemicals Alcoa Ameren American Transmission Co. Anheuser-Busch In. Bev Aramco Services Archer Daniels Midland Barrick Gold BP America Bristol-Myers Squibb Cargill Chevron CITGO Petroleum Codelco-Chile Conoco. Phillips Constellation Energy DFW International Airport Dow Chemical Du. Pont Eastman Chemical Eli Lilly Exxon. Mobil Glaxo. Smith. Kline Hovensa International Paper Kaiser Permanente Marathon Oil NASA Naval Facilities Engineering Command NOVA Chemicals Occidental Petroleum Ontario Power Generation Petrobras Praxair Procter & Gamble Progress Energy Saudi Basic Industries Corp (SABIC) Sasol Technology Shell Global Solutions US Smithsonian Institution Southern Company Sunoco Tennessee Valley Authority Trans. Canada Corp. U. S. Architect of the Capitol U. S. Army Corps of Engineers U. S. Dept. of Commerce/ NIST/Building & Fire Research Lab U. S. Dept. of Energy U. S. Dept. of Health & Human Services U. S. Dept. of State U. S. General Services Administration

Contractor Members Aker Solutions Alstom Power AMEC Atkins Faithful + Gould AZCO Baker Concrete Construction Barton Malow Bateman Engineering Bechtel Group Bentley Systems BIS Frucon Industrial Svcs. Black & Veatch Bowen Engineering Burns & Mc. Donnell CB&I CCC Group CDI Engineering Solutions CH 2 M HILL CSA Group Day & Zimmermann Dresser-Rand Company Emerson Process Mgt. e. Project Management Fluor Foster Wheeler USA Grinaker-LTA/E+PC Gross Mechanical GS E & C Hargrove E & C Hilti Jacobs JMJ Associates KBR Lauren E & Constructors M. A. Mortenson Mc. Dermott International Mustang Omniware Oracle USA Parsons Pathfinder Pegasus Global Holdings R. J. Mycka S&B E & Constructors The Shaw Group Siemens Energy SNC-Lavalin Technip URS Corporation Victaulic Company Walbridge Wanzek Construction The Weitz Company Worley. Parsons Zachry Zurich

Universities involved 1983 -2009 University of Alabama Arizona State University Auburn University Bucknell University of California-Berkeley Carnegie Mellon University of Cincinnati Clemson University of Colorado-Boulder Colorado State University Columbia University East Carolina University of Florida Georgia Institute of Technology University of Houston University of Illinois Iowa State University of Kansas University of Kentucky Lehigh University of Maryland University of Michigan Mississippi State University of New Mexico North Carolina State University North Dakota State University Oklahoma State University Oregon State University The Pennsylvania State University of Pittsburgh Purdue University Polytechnic University San Diego State University San Jose State University Stanford University State University of New York-Albany Vanderbilt University Virginia Polytechnic Institute and State University Texas A&M University The University of Texas at Austin (CII headquarters & founding university) University of Washington University of Waterloo University of Wisconsin-Madison Worcester Polytechnic Institute

CII Knowledge Processes Management, organization, and assessment of the 500 -plus CII documents and publications. Assessment of the impact of CII practices through benchmarking. Knowledge Creation Knowledge Management Knowledge Assessment Research to define best practices, breakthroughs, and industry norms. Dissemination through publications, implementation guides, educational materials, workshops, and conferences. Knowledge Dissemination

A world-class leadership program for senior executive candidates in the engineering and construction industry Program Description This intense custom-designed program offers the in-depth knowledge that will allow participants to understand develop the broad range of leadership skills needed to realize their potential as contenders for the top capital facilities positions in their companies. The program’s innovative curriculum is comprehensive and integrated. It will fine-tune the business acumen of participants, develop executive skills, and enhance their abilities to enrich their organizations’ cultures and drive to profitability. The curriculum focuses on how to: • Enhance executive leadership capabilities and strategic business skills. • Build collaborative relationships between owners and contractors, and with peers across the industry. • Benchmark on best practices and network with leaders from both owner and contractor companies. 10

2010 CII Annual Conference August 3 -5, 2010 Grand Cypress Resort Orlando, Florida • Over 500 Top Industry Attendees • Presentations on: – New CII research – CII product implementation case studies • New CII Initiatives – Professional Development – Implementation – Benchmarking – Other • Notable Speakers

Performance Improvement Workshop Fall 2010 Focused on: • CII Product Implementation • Best Practices • New Practices • Case Studies • Networking Houston, Texas November 8 -10, 2010

Benchmarking Conferences & Workshops • Essential for implementation of reliable benchmarking process. • Updates improvements in the online system • Explains new metrics and interactive reports • Delivers annual training needed to stay in tune with improvements • Ensures greatest benefit from this valuable CII resource. June 2 -3, 2010 Abbott Park (Chicago), IL Hosted by Abbott

Value of Best Practices 0. 4 Performance 0. 3 0. 2 Better 0. 1 0 -0. 1 -0. 2 4 th Quartile Low 3 rd Quartile 2 nd Quartile Practice Use 1 st Quartile High

Use of Best Practices • Company Level VBP • Project Level VBP

Corporate Culture Actively Supports the Implementation of Best Practices? – Results of Both Owners and Contractors

Owners’ Use of Front End Planning 15% Cost Growth 10% 6. 4% 5% 0% -2. 2% -5% -10% -15% High Use (N=59) Low Use (N=37)

Owners’ Use of Partnering 15% Cost Growth 10% 5% 2. 4% 0% -5% -6. 7% -10% -15% High Use (N=15) Low Use (N=75)

Owners’ Use of Change Management 25% 20% Cost Growth 15% 10. 2% 10% 5% 0% -1. 2% -5% -10% -15% High Use (N=79) Low Use (N=15)

Owners’ Use of Planning for Startup 15% Cost Growth 10% 5. 7% 5% 0% -1. 7% -5% -10% -15% High Use (N=55) Low Use (N=22)

Contractors’ Use of Constructability 15% Cost Growth 10% 5% 4. 8% 0% -1. 3% -5% -10% -15% High Use (N=12) Low Use (N=28)

Contractors’ Use of Planning for Startup 20% Cost Growth 15% 10% 6. 9% 5% 0% -3. 4% -5% -10% -15% High Use (N=15) Low Use (N=9)

Capital Projects Leadership • Mc. Kinsey & Co. (1998) “The management of capital investment has an enormous effect on profitability and competitiveness, yet few companies do it effectively. We believe that the use of evaluation tools, disciplined processes, and best practices can help companies trim capital spending by up to a quarter without reducing capacity or functionality - and improve their operating costs and revenues through better investment decisions. ”

CII – CMAA Mission Statement Improve delivery of capital facilities in all settings by promoting the professional practice of Construction and Program Management in conjunction with the broadest possible application of recognized industry Best Practices. 25

Best Practice – Best Practitioner CII • Dedicated to organizational transformation. • Promotes a culture of high-quality execution in contractor (architect/engineer companies, construction companies) and owner organizations. CMAA • Emphasis on individual excellence. • Established Certified Construction Manager credential. • Solid Standards of Practice. 26

CII – A Legacy of Industry Leadership Total Recordable Incidence Rate (TRIR) 44 Companies Reporting as of July 15, 2009

CII – A Legacy of Industry Leadership Days Away, Restricted, and Transfer (DART) Rate 44 Companies Reporting as of July 15, 2009

The Legacy Continues Best Practices – Best Practitioners

Thank you for your attention! Wayne A. Crew, P. E. Director Construction Industry Institute 3925 W. Braker Lane (R 4500) Austin, TX 78759 -5316 (512) 232 3003 wcrew@cii. utexas. edu www. construction-institute. org