While not the preferred cause, the COVID pause forced us to rethink how we deliver data center projects. People are wary of returning to work for all the right reasons. We are also up against labor and material shortages that are not normal, expected, or predictable. Now is the right time to pause for a moment and change the direction on how we select our teams, work together, and deliver the ever–accelerating demand for whitespace. The backbone of our digital world depends on it.

Think back to Q1 2020: The accelerating nature of the builds was stressing the delivery pipelines before COVID. Now they are leaking and show signs of bursting. Yes, things will get better, but we can take our lessons from COVID times to enhance and work with our Owners/Partners to deliver better and, frankly, faster and at a lower cost. What a difference six months makes.

We want to provide thoughts on three areas: Procurement, Builders vs. Managers, and High Performing Teams.

Procurement
Let’s talk about Rosendin’s data center procurement approach. We feel that the traditional methods of Design–Bid–Build are old-fashioned compared to the evolving needs of our clients. Yes, this model drives a low initial cost, but overall it slows delivery, creates mistrust, and adds layers of management. A term used in a circle of industry thinkers is that we are promoting the organization on a procurement basis rather than a delivery basis; contrary to advice we give our first–year employees of “start with the end in mind.”

As colocation data center leasing demand continues to increase, and delivery timelines continue to shrink, project teams must evaluate our methods to integrate into our schedules. Integrated teams will challenge all partners to discover new schedule opportunities to help us move past the current trend of design packaging (not to be confused for prefab work packaging). Teams will find that leveraging lean principles of trade flow, critical trade partners’ expertise, and ideas put forward at early stages (design–assist roles) offer fresh thinking that can accomplish cost-effective accelerated deliveries. This way of thinking is not bought or procured. It needs to be engaged and cultivated through partnerships.

A partnered and integrated team finds strategies to eliminate redundancies in staff, capitalizing on the partner most qualified to perform the service. Imagine a world where the Project Management and Field Management staff were smaller, more agile, and proactive as opposed to reactive. Would that enable faster delivery and lower cost for our Owners and the industry overall? Imagine a world where an answer is only a phone call or conversation away. We can’t avoid using our systems for the documentation, but let’s make it just that, for documenting. Four phone calls, an RFI, waiting for a meeting to review the RFI, and then deciding to price and approve it before proceeding, that’s waste and what needs to be cut out.

Ultimately, the colocation business is a mid-margin business. Procurement pressure and layers simply add friction. Friction drives unseen contingency and, ultimately, higher costs.

Builders vs. Managers
Builders plan. Managers control. Which works better?

Every “unicorn” project that Rosendin has worked on in the last 20 years in the high-tech and land development industries has shown that working with builders instead of contractors is the leading indicator for exceeding expectations. Controlling projects with contracts and layers of checks and balances disincentivizes bright and brilliant builders from thoroughly engaging.

The best projects seek to avoid the establishment of layers of procurement gates and rigid controls instead, engaging the entire team at the table early. We have seen a team ratify a “rules of engagement” document that establishes behaviors and responsibilities. Rosendin embodies the simplicity that augments typical contracts.

Having the team embrace the activities where planned work and scheduled activities help us achieve optimized workflow which in turn saves substantially in schedule and, resultantly, cost. Having the ability to amicably call each other out on behaviors and actions that diminish the flow is just as critical to the team.

Rosendin believes that the simple approach of pull planning the work, estimating the plan pulled, then tracking against the plan is the direct route and most effective way to accelerate schedules and lower cost. Envision what can happen if we spend the first two months of the job planning instead of bidding. Coordinating, rather than working through rigid bid forms. Being vulnerable and giving our Owners visibility to our risks instead of writing exclusions and blanket “get-out-of-jail” statements in the proposal.

Can you imagine the flow that would be established?

Ten years ago, we watched a small team of engineers and contractors exceed a Startup Owner’s goals when delivering on a high-tech retrofit in an existing facility. Here’s why it worked:

• The team was selected on the people, not the companies.
• The team defined the rules of engagement, and a type of change matrix became the chapter and verse for pricing and change control. Everyone signed on and played along (or got voted off the job quickly).
• The people defined the scope, not just the Owner, which sounds counter-intuitive, but EVERYONE buys in because their voice matters.
• The written scope became the contract. There was no “lost-in-translation contracting” between an initial budget proposal to the scope of work to the final contract.
• The engineers provided only the information needed. Think about having Engineers engineer and Builders build. all with open dialogue. If this intrigues you, we encourage you to reach out to us.
• The scope was granular enough that each task was a “work package” that was easy to digest, schedule, and track ­— an instant earned value check that is independent of the Builder’s accounting systems that verifies the health of the project.
• Scheduling the scope was easy via pull planning. A spreadsheet was enough and used to document the expertise of the builders. No specialized training or tools were needed.
• Pricing was an open book during planning, where everyone knew all, and Auditors were welcomed in this phase! Pricing wasn’t firm until the plan was ratified.
• Once ratified, books closed, and pricing became lump sum. The Owner agreed to a fair deal, the Builders then owned the scope and were free to execute using their best practices and were unencumbered by processes.
• All parties attended the OAC meetings to ensure alignment and eliminate communication waste.
• The project contingency was established and openly tracked.
• The agreement of the types of change governed all change control. It was fair, concise, and expedient.

In the end, the team outperformed and took on the additional scope for the Owner, while only utilizing less than 10% of the contingency because we found alternate means throughout the job and used savings to cover unforeseen costs.
So why is this so different? We talk to colleagues in the business, and we all agree that this is the method we want. For some reason, it is not the method we experience, and it is not because it is not scalable. We worked on a team to plan the electrical scope on a $1B prototypical high-tech build using this method. It scaled just fine. So why can’t we abandon the old ways and instead focus on planning, building, and controlling builds in simple ways?
Ultimately, we believe it is the people. Only a select group of Owners and Builders can comprehend this approach and take the first steps towards the trust needed. We argue that the Owners who can assemble these teams to work in this manner will enjoy the outcomes of both schedule and cost.

High Performing Teams
Now that we’ve built up the hype, how do we develop Project Teams that function at peak efficiency, in more nimble, cost-effective, and high-pressure deliveries? The most significant risk here is sales — overpromised and underdelivered — when you want a project. The first and most critical step is to give up the risk manager and sales mentality. Risk managers often view the world the same — everything can and will go wrong if left to their own devices. Risk managers shift responsibility, sell risk to others, direct and don’t do, add layers, slow down work, and add cost. Friction makes people nervous and adds costs. Ironically, great teams are optimistic and manage risk realistically, not unilaterally. That does not mean we forsake risk management; instead, risk management becomes a shared responsibility in the context of what’s truly risky to the team and project. High performing teams will develop trust that supersedes the need to protect one’s self-image.

Trust begins at the team selection phase, where the Owner selects people, not the low bidder. The Owner demonstrates their trust by choosing the best-qualified team and sacrificing the competitive bid process for visibility, partnership, and early expert advisors. The project team sacrifices their autonomy of thinking for only one’s self, and their duty becomes the most efficient and cost-effective delivery for the betterment of the project. It is this trust that will allow teams to be more candid in schedule and cost conversations, bring new innovative ideas, and truly leverage the teamwork at a project level (not an organizational level). Something that so many in our industry strive for and fall short of achieving.

In Closing
How will post-COVID times look different? Internally, we see our teams at Rosendin looking towards new ways of delivering our projects. Stretching our minds to the edge on our capacity to produce kits of work and prefabrication, and actively seeking our opportunities to shift labor hours into material dollars to reduce headcounts on-site. In turn, shifting top performers from project to project to allow their specialization and expertise to touch more projects.

So why is this different? The key is that we are stepping aside from our projects and are going against the stream (and our tried and true ways) because of COVID. We typically work with managers — the people who manage submittals, the people managing the build to the plans — and COVID is requiring us all to be facilitators.

A facilitator asks, “What works best here? What do you need to make that happen?” while taking a step back and asking, “What is the intent of the Engineer? What is the intent of the Owner? How could we best achieve the intent?” We are conditioned to follow the direction of managers. It is the result of our contractual based relationships.

Meeting our mission-critical build commitments in COVID times, regardless of force majeure, mandates that we hit the mute button on our bad behaviors, seek out eloquent and efficient ways of procuring work, and keeping everything simple.

Let’s start letting the facilitators speak the loudest and think like builders. It is the way we need it to be.

Chad Constance is Assoc. DBIA, Project Executive of Rosendin. He can be reached at [email protected].
Brett Strohlein is Mission Critical Market and Preconstruction Lead of Rosendin. He can be reached at [email protected].