Clients want ever more value from their construction projects but this can be difficult for designers to define and demonstrate. Simon Austin and Derek Thomson of Loughborough and Glasgow Caledonian universities describe a new approach in which all project stakeholders are engaged.
At a time when the construction industry has become proficient at delivering technically and logistically complex projects, clients' expectations are evolving in their demand for value.
Until now, narrowly-defined views of value have proven adequate. Value engineering, for example, applies a rigid functionally-based view of value in the analysis of projects but has been misused to the extent that it has become a euphemism for cost-cutting and despecifying. More recently, the design quality indicator (DQI) is a good innovation that stimulates stakeholder engagement by scoring a fixed set of building qualities. It is also laying the ground for benchmarking building performance by collecting data through the web.
However, the DQI quality criteria cannot be adjusted and it sets out a single, collective view of design quality. Given the variety of projects we undertake and possible configurations of stakeholders involved in them, we must establish what each stakeholder considers value to be before we set about delivering it.
Defining value
A team of construction organisations led by Sheppard Robson and Loughborough University—involving Amec, Arup, BAA, Broadgate Estates, David Landon, LLP, CABE, CeBe, CIBS, RIBA and RICS—and funded by the Engineering and Physical Sciences Research Council and Department of Trade and Industry have collaborated over the last three years to investigate the nature of stakeholder value and to develop approaches to its delivery that accommodate differences between stakeholders. This work resulted in two key insights.
The first came from a multi-sector review of value theory—from philosophy to customer value management —which resulted in a simple definition of value as ‘what you get for what you give.’ More specifically, value can be expressed by breaking it down into three components
benefits stakeholders seek from a project
sacrifices stakeholders are willing to make to get those benefits
resources stakeholders are willing to consume in making those sacrifices.
Asking each stakeholder to define these makes the ‘get’ and ‘give’ of value explicit and helps them to make compromises when agreeing the project solution. It also provides a structure for objective setting and performance evaluation.
The second insight arose from a cross-disciplinary review of existing value-delivery practice. This established that every stakeholder has different values or guiding principles and, therefore, sees value differently. Attempts to form a single definition of ‘project value’ are therefore misguided as the concept can only be meaningfully understood from the perspective of every stakeholder. We need to capture each party's perspective and monitor their performance judgements so that designers can be better informed when reconciling different points of view within the project solution.
A new approach
The project team developed the ‘VALiD’ (value in design) approach to embody the insights in a flexible approach to managing stakeholder engagement. VALiD is structured around a three-part framework which can be used in whole or in part to suit project requirements (Fig. 1). The framework guides an ongoing discussion among projects stakeholders which helps them to
understand each others' values so that compromises can be made when reaching a single solution
inform project design by setting targets for value delivery in the form of benefits, sacrifices and resources
judge value-delivery performance throughout the project life cycle, from inception through to obsolescence.
The three-part framework of the VALiD process—designers engage all project stakeholders in understanding, defining and assessing value before construction work starts
The three-part framework of the VALiD process—designers engage all project stakeholders in understanding, defining and assessing value before construction work starts
The latter judgement process provides continuous feedback that designers, constructors and operators use to monitor project whole-life value-delivery performance.
VALiD has been shown to be effective in helping stakeholders express their values, expectations and judgements of value delivery. The approach is a timely and effective response to customers' growing need for stakeholder value—whatever form it may take—to be defined and demonstrated. Moreover, its flexible nature makes it well-suited to a wide variety of infrastructure projects. Further information, support and a free toolkit are available at www.valueindesign.com.
FOR FURTHER INFORMATION CONTACT, Simon Austin, TEL 01509 222608, EMAIL s.a.austin@lboro.ac.uk, WEB www.valueindesign.com
