Summary 1

VALUE, BUILDINGS AND PEOPLEWho is the Client? The concept of the client as a single entity is now obsolete. The client is a collective body built up from many different stakeholders, each with unique values. Stakeholder conflict when their values are incompatible. Client's requirements must be developed through negotiations and compromise between stakeholders.  Value Management is vital for facilitating this process. Consumer Preferences and Purchasing Choices Everyone has different preferences and motivations and we reflect these in our choices and purchasing decisions. Each of us have a unique system of values which direct and constrain our actions and expectations.  Our differences cause us to seek to own and experience different things (i.e. building that reflects our values) It is the connection between people and products that matters when we think about value. Multiple stakeholders must compromise to reach a mutually acceptable building outcome. This processes is centred on the principle of satisficing rather than satisfying. The Reflection of Values in Building Design The affective dimension of buildings influences the building's ability to perform it's intended role. The strength of our relationship with a building is dependent on whether it captures our values, a person or family would pay a greater amount of a house captured their values (e.g. homely) Our values affect our willingness to pay for a building and how safe, relaxed, happy...we feel in them. Values is a subconscious process although we can say what we think they are, you can only see their influence. Value Management has little to with reducing cost, it is simply a consequence of the process.  Ducks Vs. Decorated Sheds Every building is a statement of someone's values. This symbolism can be embodied into a building either by infusing it into the very form of the building or by applying it to a generic building using signs and facades. Venturi called these two approaches ducks and decorated sheds. Most buildings lie between these 2 extremes. Ducks Ducks are buildings that reflect a specific client's values so much that the building's form physically symbolises those values. Venturi developed this idea when seeing a building shaped as a duck which sold duck hunting equipment. Two buildings may offer similar functionality but look completely different because they embody different values. Decorated Sheds Decorated sheds modify the environment (e.g. provide warmth) but possess no qualities symbolic of the client's values. Examples of decorated sheds include out of town retail parks who rely on signage to convey their values. Apart from the signage, these building could house any type of organisation. Venturi first characterised the decorated shed when observing basic, non-unique buildings in the early developments of Las Vegas. Understanding Project Success Successful projects are considered those that fulfil the brief. Clients can still be dissatisfied in this situation as the brief might have not captured their requirements/values. It is increasingly considered that a project is a success if the client is happy rather than achieving time, cost and quality. Subjective Value vs. Objective ValueSubjective Value - Value which is more concerned with the interpretation of a product by a person and the relationship between people and products/buildings.  Value management is concerned with subjective value.Objective Value - Value concerned with qualities of a product (i.e. a building which meets a certain set of qualities) Exchange Value - Created by the ability of a product to be sold for money or exchanged for other goods (property investors are interested in this). Use Value - Created by the ability of a product to be used for an intended purpose (e.g. consumer/electric goods & factories...) Esteem Value - Created by simply owning a product that someone has worked hard to acquire or by a product providing value to it's owner by projecting a certain image to other people.  Intrinsic Value - Results from the innate product details that are hard to describe (i.e. 'something else' of a project which can't be expressed) THE CONTEXT OF VALUE MANAGEMENTWhat are Values? Values are beliefs about how things should be OR subconscious influences on our perception of the world. Decisions made by a person are influenced by their values.  Values are intangible and tacit. Value is what we want out of a situation, it exists between a stakeholder and a building.  Value ins construction seeks an appropriate balance between functionality & cost.  A collection of values is a value system which ties groups/organisations together. We all have the same basic human values but they're present to different extents in each of us, giving us unique value systems.  People's perceptions a tacitly framed by these values, making peoples' interpretations bias and their judgements irrational. Instrumental Values are reflected in actions. Terminal Values are reflected in desired outcomes. We never know what our actual values are. We can observe the influence of our values in our actions and decisions. Eliciting Values To gain a better judgement of client values, we need to elicit them but it is extremely hard. Values cannot be directly elicited but only revealed through patterns in their judgements, preferences and behaviours that can be established through workshop forums. Government Policy Until recently, UK Government policy considered value a result of investment in 'design quality'. Due to the difficulty in quantifying the benefits of creating additional value, it is hard to justify additional costs.  UK Government policy 2001-2010 advocated The Value Agenda which promoted good design for social benefit. Core Concepts of Value Management The consideration of functionality, the placing of all stakeholders on an equal foundation and the use of rigorous analytical methods  to socially construct common understandings are the key components of value management. VM ensures stakeholders views are challenged and are only allowed to influence the design if it satisfices the values of all other stakeholders and the functions they collectively require. Stakeholders require opportunities for sense making.  Client Body, Stakeholders and The Procuring Client Client Body - All the stakeholders considered together. Stakeholders - Anyone who is influenced by or influences the project. The Procuring Client - The individual stakeholder who has the business need for the building and instigated the project to create it. The Design Quality Indicator (DQI) The DQI was adopted to address the problem of quantifying value by helping designers to engage in the discussion of design quality so design proposals could be evaluated against targets expectations put in place.  BUT DQI examines the presence of build qualities rather than recognising stakeholders' subjective view of value which is an important difference that was ignored by this policy.  DQI adopts the Vitruvian principles which are expressed as 'build quality', 'functionality' and 'impact'. Despite criticism, the DQI became a central part of Government policy and remains part of Government Procurement Guidance. 

Function Analysis Function - The natural or characteristic actions performed by a product or service. The systematic analysis of a product's purpose so functions not facilitating that purpose can be removed.  Elicits the functions that stakeholders expect a building to provide.  Differentiates between needed and wanted functions. Reasons for Using a Verb/Noun Definition Forces conciseness Avoids combining functions and defining more than one simple function. Avoids influencing potential solutions.  Value Analysis The use of function analysis to improve an existing design. Method has largely been superseded in current practice by other concepts. Value Engineering The term emerged as value analysis grew into widespread adoption.  Value Engineering is 'the structured use of function analysis within a facilitated 40-hour workshop that follows the Job Plan.  What is Value Management? 'The name given to a process in which the functional benefits of a project are made explicit and appraised consistent with a value system determined by the client. VM workshops are a series of workshops during a construction project. They create a forum for stakeholders to build a common understanding.  VM seeks to help a group of stakeholders 'socially construct' a common understanding of how a design solution must perform to provide a moderate amount of value to all of them rather than a maximal amount to any one of them.  What is Applied Value Engineering? Is the spontaneous use value management techniques applied late in project progression to solve ad-hoc technical problems. Usually undertaken in structured workshop format following the Job Plan and utilising function analysis.  The constraint of design fixity means late examinations of design proposals must focus on technical problems of small scope as the opportunity to influence the whole building would have passed.  VALUE AND THE CLIENTStakeholder Value Systems Collaboration requires common values. Value systems must align between stakeholders to form coherent project goals and culture. Compromise can only be achieved if stakeholders see others also making compromises. True Partnering causes value systems to align around a common purpose. What is Satisficing? A satisficing solution reflect all stakeholders values sufficiently for them to continue to supports it's further development. All stakeholders must compromise to develop a solution that balances their competing expectations.  Facilitated workshops enables the social construction of a common understandings of achievable project value.  If the stakeholders are happy with the outcome, the project is a success, irrespective of time, cost and quality. Sense-Making Sense-making is the process by which stakeholders make sense of their surroundings by relating new info. to existing knowledge. The process is essential in VM workshops for stakeholders to socially construct new and common understandings. To prevent stakeholders disengaging from a workshop to 'sense-make', the facilitator will incorporate sense-making opportunities such as lunch breaks into the workshop.  Sense-making in value management relies on effective workshop design and facilitation. Single Loop Learning Used to solve immediate problems without changing underlying understanding. Transferrable knowledge is not constructed. Double Loop Learning New insights are combined with existing understanding. New knowledge is constructed.

The Structure of Designing Design is not linear. Design includes analysis (breaking inputs into parts) and synthesis (reassembling in a new way). The Double Diamond model is common (above) Strategic, Tactical and Operational Procuring client develops strategies to direct their future activities. Procuring client implements tactical projects (e.g. construction project) to achieve its strategic vision. The outcome of the tactical project (i.e. a building) directly influences the organisations ability to carry out its daily business operations, thus an organisation's strategic plans are connected to their daily operations. The tactical project must ensure it's outcome delivers operational value to ensure the building is a useful business asset.  Value must flow from the investor's strategic direction through the construction project to it's daily operations.

Requirements of a VMO Workshop (In Line with BS 8534) Often performed within the business. Must establish what value means in terms of business benefits and priorities. Identify and agree business needs. Identify and evaluate options for meeting business needs. Select and agree the best option to meet business needs to confirm whether or not the project is required. Define clearly and agree the project objectives through a stakeholder buy-in. Monitoring the Strategic Need for a Project A sudden change in a business can cause a sudden revision of its strategy. Every VM workshop should revisit the procuring client's business case to confirm that the building is still needed as it is possible that the business need can expire during procurement. A strategic change can cause the need for the tactical project to disappear. Should halt the project but is extremely difficult with potential penalties. Value Management workshop reports can provide useful devices to help the client make the decision. What is Issue Analysis? A fact gathering tool which defines the project context. It is performed the first time the tactical project stakeholders meet, typically in the VM1 Workshop with the findings passed onto subsequent workshops. Stakeholders brainstorm possible issues that will affect project success using yellow sticky notes. The facilitator introduces the generic issues identified by Kelly et al. which stakeholders are invited to position their post-its around and explain their reasoning. If any of these issues are insufficiently considered, Kelly et al. suggests the project is likely to be considered a failure.  This is an effective approach to rapidly sharking knowledge and developing common understandings.  Generic Project Issues Organisational Factors Stakeholder Issues Contextual Issues Location Issues Community Issues  Political Issues  Financial Issues  Time Related Issues Legal and Contractual Issues Parameters and Constraints Project Drivers Change Management

Stages of Issue AnalysisStep 1 Without knowing the issue categories, stakeholders individually brainstorm issues or concerns they have on the project. The facilitator introduces the generic issue categories. The facilitator asks the stakeholders which brainstormed issues relate to which categories. The originating stakeholder is asked to explain each issue and provide further commentary upon it. This rapidly shares information about the overall project context between stakeholders. Step 2 After the discussion, stakeholders nominate the most critical issues to be addressed by their project. Each stakeholder is given seven black sticky dots and three red sticky dots. Stakeholders place their dots on the yellow sticky notes on the issues they think are mission critical (red dots) and the issues that are important (black dots). Mission Critical issues are those that if they're not resolved, will cause the project to fail. Important issues are those that the project must find a solution for. After it is complete, the facilitator identifies the most critical issues which stakeholders are asked to discuss and raise any further concerns.  Eliciting the Client's Value System Eliciting clients values is pivotal to value management as it underpins all other project activity.  Eliciting the client's value systems reveals the influence of the client's values on their preferences. Helps stakeholders understand each other, the project complexity and the need for compromise. Typically performed in the VM1 workshop. The Client Value System Value Management practitioners find most clients are concerned about the same basic factors: time, cost and quality To help elicit the client's value system, Kelly et al. establish 9 basic components of what they term the client value system.  By exploring these components, stakeholders can negotiate a common understanding of required building functionality which if achieved, would aid in reaching a satisficing project outcome. These components do not represent the client's value system as values remain tacit and intangible.  But the components are a useful guide to reveal the consequences of each stakeholders' values.  Kelly et. al.'s Generic Value System Criteria for the Pair-Wise Comparison: Time Capital Cost Operating Cost Environment Exchange  Flexibility Esteem Comfort Politics/popularity/community Pair-Wise Comparison Process To ensure all parts of the client's value system are considered, a pair-wise comparison is performed.  It is a systematic comparison to prioritise the generic issues/value criteria which will reflect stakeholders underlying values.  The generic value criteria are arranged into a matrix. The facilitator explains the meaning of each criterion. Selecting matrix cells in a random order, the facilitator asks the stakeholders to state which two criteria in the randomly selected pairing is more important to them and could potentially be satisfied at the expense of the other.  The process stimulates the stakeholder debate required to agree a satisficing solution.  The pair-wise comparison is systematically repeated for all cells in the matrix. Clients Needs Vs. Clients Wants A function analysis is undertaken to translate the client's value system into a statement of functions that the building must perform. This aids in developing a solution that delivers the required functionality in a manner that reflects the client's values.  The functional requirements are evaluated to distinguish those that are needed agains those that are wanted.  This discussion enables stakeholders to determine which requirements could be sacrificed if project resources were unavailable.  Value in Lean Construction Lean construction does not directly consider client's values. It assumes that once the values have informed the concept design which has been agreed, the opportunity for further value lie in the efficiency of the production process by removing waste.  Lean accordingly defines value as the absence of waste, which is not the definition.  Lean construction views the supply chain as a 'value chain' through which customer value flows from one activity to the next. It also recognised the value adding contribution made by each organisation along the chain. The understanding of value held by those performing adjacent production processes should align if the process is to flow without waste and intrinsic value is to result.  This chain ensures a continued understanding of the client's expectations as the project progresses so the client is satisfied with the end result. This is achieved by promoting a 'dual customer' model which emphasises that it is important to mindful of not only the client's values but of your own and those in the next stage of the value chain.  Organisations are expected to volunteer suggestions of improvement to process efficiency to continuously improve their own actions and their alignment with those dependent on their work.  This avoids the wasted resources in rework due to misaligned understandings of the clients expectations and resulting incompatibilities of how the following person/organisation in the value chain expected to receive work.  Lean Process Optimisation - Removing Gaps - Concerns the minimisation of rework.Lean Process Optimisation - Avoiding Overlaps - Concerns the minimisation of waste.Lean Process Optimisation - Aligning Interfaces - Concerns the internal customer.THE WORKSHOP APPROACHThe Value Chain A value chain is formed when the understanding of value held by those performing sequential activities is aligned, with each each activity adding more value to it.  By aligning the understanding of value, gaps in workflow and rework are avoided which make the chain efficient.  If this is not achieved, the perceptions of value associated with the different construction stages will become disconnected.  The understanding of value at a strategic levels developed in early VM workshops must be translated into the tactical project and subsequently, into those operating the building.  Strategic corporate value must be aligned with the business which must then be translated into the various views of value held at each stage of the tactical project.  Achieving operational value (i.e. project fulfils its required role) requires all stakeholders' expectations of value to be translated through the project value chain to this final outcome.  Dual VM Workshop RolesPeriodic VM workshops must maintain an evolving understanding of value through the value chain by performing two roles: They must provide a forum so that stakeholders can update their common understanding of value in response to evolving project work and any changes in project context. They must convey the updated understanding of value to the guide those performing subsequent value chain activities. The Need for the Workshop Forum Workshops establish the social setting required for stakeholders to communicate and use analytical tools under the guidance of a facilitator to socially construct common understandings/values and reach a satisficing solution.  Sufficient understanding of value cannot be gained by other communication methods other than direct, face to face communication.  Workshop tools are designed to stimulate this debate to reveal the consequences of stakeholders' underlying values. Effective workshop facilitation must establish a socially safe space where stakeholders are all equally engaged and contribute to the developing understanding.  Value Management Study Styles Study Style 1 - Value System Audit (independent value manager) Study Style 2 - Value System Reconfiguration (independent value manager) Study Style 3 - Value System Audit (independent value management team of specialists) Study Style 4 - Value System Audit and Reconfiguration (independent value management team of specialists) Study Style 1 - Value System Audit Used to understand the nature of value to the client body. Undertaken by an independent value manager Helps project stakeholders understand the problem. Does not emphasise solving the problem. Stakeholders' motivation moves project onwards. Construction project confirmation and formation. Study Style 2 - Value System Reconfiguration Used to verify and challenge the project value system. Undertaken by an independent value manager Facilitator helps stakeholders in challenging assumptions about value systems and likely solutions. Project briefing leads to concept design verification.

Stage 3 - Value System Audit Used to confirm value system compliance. Undertaken by an independent value management team of specialists. A rare format in the UK. Validates technical system design. Step 4 - Value System Audit and Reconfiguration Used to audit and redirect technical system compliance.  Undertaken by an independent value management team of specialists. External team of specialists address technical issues. Applied value engineering would us an internal team. Used to respond to problems in technical system design. Value Creation Opportunities for value creation decrease as a project progresses from design brief stage through construction to occupancy. Cost of design changes increases as projects progress. Design and build contracts limit the ability to reflect client values throughout the design. System Sequencing & Project Crossover Technical systems are usually designed in a set order. Independent systems (that don't rely on another) can be resequenced if needed earlier in a project.  Independent systems also reach a crossover point beyond which the cost of improving the design of that system exceeds the benefits of doing so.  If designed before the crossover of the whole building, they can influence subsequent systems. If the system is independent, value can continue to be added for that system even after the crossover point for the whole building. The principle supports the ongoing application of value management in the later stages of a construction project by reducing the scope of the problem from the whole project to systems within the project and the stakeholders affected by the system. In these later stages, value management turns into value engineering as the nature of the problems become more technical.  The Problem of Design Fixity Design fixity usually relates to the whole building but can exist within technical systems. As a project progresses, the scope to make decisions and impact the value decrease.  At a certain point in the project, the benefit of responding to a new insight no longer exceeds the cost of implementing a change.  Value can still be considered within the design of a building system even after it's not sensible to do so for the whole building.

Pre Project Workshops - VM0 VM0 - Functional Examination of Strategy Occurs before a building has been identified as a potential way to advance the client's business strategy.  Assesses the procuring client's strategy to determine whether a construction project is an appropriate way forward. Uses function analysis to identify the functional needs of the client in terms of business development. The resulting insight will inform the procuring client's decision as to whether constructing a building is required to facilitate the organisations functions.  A detailed business case is made to make an informed decision. If a project is chosen, future VM workshops fall in line with stages of the RIBA  Plan of Work.  Early Value Management Workshops - VM1 VM1: Happens at the Pre-Briefing Stage Addresses the concept of the whole building. Engages stakeholders of the construction project and the resulting building. Often be the first time these stockholders meet which can help as they will potentially have an 'open mind'. Purpose: Informs the architect's briefing activities, the conceptual design development and the feasibility study which informs the procuring clients final decision to build. Establishes the basic project success criteria using issue analysis. Elicits the client body's value system and the functional role of the building using functional analysis Early Value Management Workshops - VM2 VM2: Concept Design Evaluation Updates project understanding of project value in light of the stakeholder sense-making and any potential changes in project context. Evaluates the proposed concept design to confirm it reflects the clients values and performs required functionality.  The client's value system criteria will be revisited to determine if prioritisation has change. The function analysis and FAST Diagram will be reviewed to determine if it has changed.  VM2 verifies the concept and informs subsequent design development. Late VM Workshops & Applied Value Engineering - VM3 VM3: Technical Design Strategy Verification Verifies the scheme design and  the detailed design. Ensures that the design of elements and components will reflect the client's values. Ongoing design fixity prevents consideration of concepts and spaces.  Can assist with passing understanding of client value to those designing later technical systems. Late VM Workshops & Applied Value Engineering VM4: Final Design Critique Before Construction Often only performed if elemental or component problems are emerging (e.g. over budget) that could dissatisfy the client.  It is a formal instance of applied value engineering.  Applied Value Engineering occurs on an ad-hoc basis throughout the later stages of a project when problems arise.  Workshops involve fewer and more specialised stakeholders that are involved with the element/component discussed. Client stakeholders would be involved if problem is visible to them. Standard value management methods clarify the purpose of the system causing the problems to ease the finding of alternative solutions. Workshops may not use a facilitator but rely on the ability of a design team leader or package manager to lead the workshop. The workshop will likely take place on site or in an office rather than a neutral location The Benefits of Value Management WorkshopsDirect Benefits A better understanding of the project Value improvements and a better quality product/service. Programme enhancements and time-savings. Cost savings (capital and operational) Increased functionality Reduced risk Lower maintenance costs Enhanced focus Indirect Benefits General improvement of project management Team working Information sharing amongst the team resulting in an increased knowledge base for the participants. Shared goals. 'Buy in' to project by workshop participants.   

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