Gearing interiors project management to the C-Suite.

While real estate and facilities managers are the obvious stakeholders when it comes to new interior construction projects, the chief executive officer, the chief operating officer, the chief financial officer, and other members of the "C-suite" often see these projects as important from a bottom-line accountability perspective.

Inviting interaction from these senior executives means these individuals become stakeholders in the construction and project delivery management process. They are informed of project cost information in the same way they are updated on other financial issues.

Business is fluid at every company and circumstances often change mid-project. Perhaps our clients are expanding by acquisition. Maybe they just made that great sale they've been working for. Working with the C-suite gives us a seat at the table so we can understand what's happening and how to best respond.

Interacting with these key executives is a science and an art. It requires solid interpersonal skills, the ability to communicate succinctly, and, perhaps most importantly, enough practical experience to understand what the executives want and need to know.

At JLS, we've established a few key methods that enable us to work effectively with these senior executives. The members of our senior management, including Joseph Sorbera, John LoVerde, Louis Vigorito, and myself, have 25- to 30-year careers in construction cost management. We've logged a lot of hours working with the C-suite.

First, we speak the same financial language as our clients and their executive management team. Our methodology and reporting capabilities are customized to match our client's general ledger. This insures that every line item is compatible with the client's own accounting system, keeping our financial accounting communication consistent.

For example, our company is completing a six-year rolling refurbishment of 25 floors for Time Inc., at the Time-Life Building, 1271 Avenue of the Americas. Our three-part reporting format continually ties together the project budget, the estimate to final completion, and the committed/paid-to-date in each periodic report in a form that is keyed directly to the client's general ledger and accounts-payable databases. This provides Time Inc.'s management with access to real-time cost data, which is always in balance with their financial reporting structure.

Cost estimates must be comprehensive. Our project managers are always looking ahead, weighing our company's experience with similar projects as well as the course of the current project. Our eyes are always on the estimated final cost, which is constantly updated based on current and forecasted conditions. This foresight allows us to provide the most reliable and comprehensive financial picture for the entire team, including the C-suite.

This approach is also useful for looking at long-range capital planning. At Barclays Capital, JLS provided accurate and comprehensive cost data on a major strategic capital project that had a four-year implementation horizon and little more than headcount growth as a basis. JLS's experience in the marketplace and with this client made this kind of forecasting possible and useful.

Second, we pay close attention to the client's corporate structure. It's essential to have a good understanding early on of how the various divisions work together and how this may impact the construction program. In short, we want to understand who the players are, how they interact, and how they will influence our work.

Aside from the complexities of cost and schedule control at Time Inc., for example, this project required an understanding of the relationships among the different magazines and magazine groups.

Each of the weeklies, including People, Time, and Sports Illustrated, required imaging and production facilities. The directors of these facilities at each publication had their own ideas of what they wanted. Rather than custom designing each of these facilities, we assembled the directors and developed a template design that could be customized as needed. As a result, we established a set of standards that fit into the master-planning program. In this case, the magazine staffs were instrumental in guiding our company and helping us to successfully complete this important project.

Third, in working with the C-suite, communications must be executive in tone. Written communication requires clear, concise language. Meetings should focus on the macro-business issues to which the target can relate. During meetings, think high-level, big-picture framing of the issues and don't drill down to the minutiae. It's essential to be fully prepared, however, should more detailed questions arise.

We are careful to create a focused agenda and keep meetings succinct. We are clear about where we need decisions immediately, and where we'll need them down the line. The last thing we want is to put management in the position of making a decision on the spot. We prefer to give them adequate notice so they can work toward the best decision. This doesn't mean we can avoid every emergency situation, but we do minimize them.

Fourth, we strive to create a careful balance among our contacts in the C-suite as well as those from the various company departments with whom we work--the real estate and facilities departments. Sometimes we look outside the standard departments with whom we normally interface. At Time Inc. we worked directly with the magazine staffs as well as the facilities managers.

On most projects, we strive to include the information technology people in the process right from the beginning. We've found that their input saves us work, saves them frustration, and results in a better project.

Understanding the meaning of intermediate distribution frame (IDF) room-ready enabled us to provide for utility services at the right time at Time Inc.

Otherwise we would have run into huge extra cost claims from the contractor, not to mention delays.

JLS's ability to re-phrase IT-related cost data into the vernacular of the CAO enabled Barclay's Capital to understand the full cost of a proposed project, rather than having to add the sum of dissimilar parts. And, similarly, working closely with DoubleClick's IT department during several of our projects there helped keep harmony amongst the trade unions.

Establishing this balance means developing a sense of teamwork and camaraderie right at the beginning. Doing so creates trust. We don't want to create silos, but we also don't want to have everyone in on every decision.

Finally, while most of our work is with large Fortune 100 companies, we also work with many firms that do not have real estate facilities people or, perhaps, have small departments. In these cases, we step in and fill that roll or supplement those who are already there. This is invaluable to the C-suite. Even if the company has a robust staff, our involvement at the top level makes a better team and provides management with the opportunity to hear first hand information about their construction project. The payoff: a smooth project with fewer overruns and errors that meets or exceeds the company's objectives.

BY DONALD A. HICKEY, JR.

SENIOR VICE PRESIDENT,

JLS COST MANAGEMENT DIVISION