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Making The Leap To IPD

By Richard L. Peck | June 3, 2019

 

When owners ask a project team to get on board with integrated project delivery (IPD), putting profits at-risk and adopting costly technologies like building information modeling (BIM), all while forsaking professional autonomy in favor of collaboration, the challenge is obvious. Nevertheless, recent years have indeed seen growing numbers of healthcare projects adopting IPD in some form, with already impressive results in time and money saved, errors avoided, and profits made.

To be sure, IPD is not for everyone, says attorney Lisa Dal Gallo, whose firm Hanson Bridgett LLC (San Francisco), has crafted some 150 multiparty IPD contracts since 2008. “The owner is the leader in the IPD world. If the owner is not design and construction-savvy and prepared to be very involved in the day-to-day process, IPD may not be the best fit for them,” she says.

“Design-build, in which the owner contracts with the designer-builder entity who oversees the project rather than participating in the contract, may be a better collaborative choice.”

Dal Gallo adds that companies embarking on IPD also need to make sure they select the right individuals, including general contractors, architects, and engineers, for the team. “Some professionals are simply not collaborative, it’s just not in their makeup,” she says. “IPD doesn’t work for those individuals, either.”

While there are various flavors of IPD, with varying approaches to compensation, risk-sharing, and decision-making, the key, for the owner, is to convince design and construction partners to sign on to a single contract holding their profits at-risk for budget overages or performance shortfalls and to share in rewards for savings and efficiencies achieved, throughout the life of the project.

So what does it take to make such a leap from the traditional design-bid-build relationship to IPD? One case study sheds light on the process.

Inside story

For Chicago- and Milwaukee-based Advocate Aurora Health—the ninth largest not-for-profit healthcare system in the United States, with 28 hospitals and more than 500 additional care sites—an initial impetus to eliminate waste inherent in the design and construction industry coincided with the Great Recession of 2008.

“After that played out, we were still relatively well-positioned to start capital projects,” says Scott Nelson, system vice president of planning, design and construction for Advocate, “so we got a lot of attention with our plans.”

Those plans included moving in the direction of IPD. Nelson said the healthcare system interviewed prospective design and construction partners and asked them about their stance on IPD. “There was some reluctance on the part of construction about going forward” he says.

Nevertheless, in 2011 Advocate initiated three large-scale projects across the Chicagoland area in a modified IPD approach under separate traditional owner/architect and owner/contractor master agreements rather than a single multiparty agreement. As the projects progressed and were completed, Nelson says Advocate saw varying levels of success among all three teams. “But in every case we saw better outcomes in terms of schedule, budget savings, quality, and construction site safety than we had in projects of similar scale and complexity in the past,” he says.

Building on this success, in 2016, Advocate decided to move toward full IPD, engaging many of the general contractors, architects and engineers already in its Partner Program to participate in the review and development process. “Our intent was to obtain buy-in to the agreement so we weren’t negotiating the structure and terms on every individual project going forward,” Nelson says. The master IPD agreement put all parties at full profit risk, but with savings incentives that would potentially enhance their bottom lines.

The multiparty contract, prepared by Dal Gallo, went into effect in 2016 and was first executed on several ambulatory facility projects by Advocate’s ambulatory collaborative team, stripping out all profit and putting everyone at risk until target cost value had been achieved—in this case, a savings of 3 to 5 percent below the target (allowable) cost.

“The full-risk nature of the agreement created quite a bit of discomfort at first,” says Nelson. “It was quite a leap.” But, by  the end of 2017,  cost savings attained had already hit 14 percent below target cost, along with a 30 percent reduction in construction time and preventable change orders reduced to 0.27 percent of construction cost. By this time, the partners were sharing 50 percent of the savings from the shared savings threshold (the point at which savings were agreed to be shared), providing an obvious enhancement of their margins.

Nelson says the resulting budgetary freedom due to the savings achieved allowed Advocate Aurora Health’s design and construction partners to innovate. For example, the team implemented more modular construction, moving from a construction platform to a manufacturing platform for pre-fabricated mechanical racks, panelized wall systems, exterior cladding, and full exam room and toilet room pods, ready to plug in efficiently when the time came.

Making it work

The ongoing process for achieving all this relied upon that Lean mainstay, the Big Room, where all nine of the IPD contract signatories on the ambulatory team would convene regularly during project construction to review progress on all ambulatory projects underway, exchange lessons learned, and evaluate attempted innovations—as well as brainstorm solutions to pressing problems.

For example, Nelson says bad winter weather was interfering with some of the interior work on a particular project, so the design team devised a prefabricated insulated exterior wall panel that would be rapidly erected, allowing them to condition the interior space where the work needed to be done. The team also devised a modular exam room pod, manufactured off-site, which could be readily installed while other construction was underway, improving quality and saving a great deal of time.

The multiparty contract partners also collaborated on using the same technological platform for BIM. “This was a requirement for all of them, as part of their participation,” Nelson notes, adding that in the future he sees the organization moving beyond BIM into augmented and virtual reality during design development, especially for non-ambulatory projects. “It’s more suitable for these big projects because they are one-offs, and augmented reality and virtual reality can be of great help in design development.”

With ambulatory projects, on the other hand, Advocate has
developed enough of a template over time to simplify design development, so that
the partners know basically what to expect from project to project. “We’ve been
able to set a standard for the design overall, and then leverage that for
expanded use of prefabrication and modular,” he says.

With the Advocate Aurora Health ambulatory team, Nelson views the current multiparty IPD master agreement as one that will continue in perpetuity, although formally requiring it to be reviewed and renewed every five years. “We envision the partners staying on indefinitely, as long as the demand for ambulatory facilities holds out and the team continues to perform,” he says.

Dal Gallo maintains that five-year review should be required of all IPD master contracts, partly because the laws governing design and construction change but also to improve the documents by incorporating lessons learned. A major benefit of the master IPD is that it avoids the necessity of negotiating and drafting the downstream risk/reward subcontracts and consulting agreements after the owner, architect, and contractor have already executed the tri-party IPD agreement.

Similarly, the issues of insurance, liability, indemnity, and compensation are worked out upfront with the IPD master agreement, leaving only the project-specific business terms to be negotiated, which saves upfront negotiation time and legal expenditures.

The IPD approach, with its shared risk and reward among the parties, is probably most suitable for facility owners that are developing several projects or large, complicated projects sponsored by private owners, says Dal Gallo. Public agencies, banks, and other financiers can be put off by the risk that the owner will continue to pay direct costs (without profit) if the project exceeds the target cost, exhausting all the profit placed at risk.

As for the participants, it’s an adventure: “Once in it,” she says, “everyone succeeds or fails together.”

Richard L. Peck is a freelance writer based in Lakewood, Ohio. He can be reached at peck.richard117@gmail.com.

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Making The Leap To IPD

By Richard L. Peck | June 3, 2019



When owners ask a project team to get on board with integrated project delivery (IPD), putting profits at-risk and adopting costly technologies like building information modeling (BIM), all while forsaking professional autonomy in favor of collaboration, the challenge is obvious. Nevertheless, recent years have indeed seen growing numbers of healthcare projects adopting IPD in some form, with already impressive results in time and money saved, errors avoided, and profits made. 

To be sure, IPD is not for everyone, says attorney Lisa Dal Gallo, whose firm Hanson Bridgett LLC (San Francisco), has crafted some 150 multiparty IPD contracts since 2008. “The owner is the leader in the IPD world. If the owner is not design and construction-savvy and prepared to be very involved in the day-to-day process, IPD may not be the best fit for them,” she says.

“Design-build, in which the owner contracts with the designer-builder entity who oversees the project rather than participating in the contract, may be a better collaborative choice.”

Dal Gallo adds that companies embarking on IPD also need to make sure they select the right individuals, including general contractors, architects, and engineers, for the team. “Some professionals are simply not collaborative, it’s just not in their makeup,” she says. “IPD doesn’t work for those individuals, either.”

While there are various flavors of IPD, with varying approaches to compensation, risk-sharing, and decision-making, the key, for the owner, is to convince design and construction partners to sign on to a single contract holding their profits at-risk for budget overages or performance shortfalls and to share in rewards for savings and efficiencies achieved, throughout the life of the project.

So what does it take to make such a leap from the traditional design-bid-build relationship to IPD? One case study sheds light on the process.

Inside story

For Chicago- and Milwaukee-based Advocate Aurora Health—the ninth largest not-for-profit healthcare system in the United States, with 28 hospitals and more than 500 additional care sites—an initial impetus to eliminate waste inherent in the design and construction industry coincided with the Great Recession of 2008.

“After that played out, we were still relatively well-positioned to start capital projects,” says Scott Nelson, system vice president of planning, design and construction for Advocate, “so we got a lot of attention with our plans.”

Those plans included moving in the direction of IPD. Nelson said the healthcare system interviewed prospective design and construction partners and asked them about their stance on IPD. “There was some reluctance on the part of construction about going forward” he says.

Nevertheless, in 2011 Advocate initiated three large-scale projects across the Chicagoland area in a modified IPD approach under separate traditional owner/architect and owner/contractor master agreements rather than a single multiparty agreement. As the projects progressed and were completed, Nelson says Advocate saw varying levels of success among all three teams. “But in every case we saw better outcomes in terms of schedule, budget savings, quality, and construction site safety than we had in projects of similar scale and complexity in the past,” he says.

Building on this success, in 2016, Advocate decided to move toward full IPD, engaging many of the general contractors, architects and engineers already in its Partner Program to participate in the review and development process. “Our intent was to obtain buy-in to the agreement so we weren’t negotiating the structure and terms on every individual project going forward,” Nelson says. The master IPD agreement put all parties at full profit risk, but with savings incentives that would potentially enhance their bottom lines.

The multiparty contract, prepared by Dal Gallo, went into effect in 2016 and was first executed on several ambulatory facility projects by Advocate’s ambulatory collaborative team, stripping out all profit and putting everyone at risk until target cost value had been achieved—in this case, a savings of 3 to 5 percent below the target (allowable) cost.

“The full-risk nature of the agreement created quite a bit of discomfort at first,” says Nelson. “It was quite a leap.” But, by  the end of 2017,  cost savings attained had already hit 14 percent below target cost, along with a 30 percent reduction in construction time and preventable change orders reduced to 0.27 percent of construction cost. By this time, the partners were sharing 50 percent of the savings from the shared savings threshold (the point at which savings were agreed to be shared), providing an obvious enhancement of their margins.

Nelson says the resulting budgetary freedom due to the savings achieved allowed Advocate Aurora Health’s design and construction partners to innovate. For example, the team implemented more modular construction, moving from a construction platform to a manufacturing platform for pre-fabricated mechanical racks, panelized wall systems, exterior cladding, and full exam room and toilet room pods, ready to plug in efficiently when the time came.

Making it work

The ongoing process for achieving all this relied upon that Lean mainstay, the Big Room, where all nine of the IPD contract signatories on the ambulatory team would convene regularly during project construction to review progress on all ambulatory projects underway, exchange lessons learned, and evaluate attempted innovations—as well as brainstorm solutions to pressing problems.

For example, Nelson says bad winter weather was interfering with some of the interior work on a particular project, so the design team devised a prefabricated insulated exterior wall panel that would be rapidly erected, allowing them to condition the interior space where the work needed to be done. The team also devised a modular exam room pod, manufactured off-site, which could be readily installed while other construction was underway, improving quality and saving a great deal of time.

The multiparty contract partners also collaborated on using the same technological platform for BIM. “This was a requirement for all of them, as part of their participation,” Nelson notes, adding that in the future he sees the organization moving beyond BIM into augmented and virtual reality during design development, especially for non-ambulatory projects. “It’s more suitable for these big projects because they are one-offs, and augmented reality and virtual reality can be of great help in design development.”

With ambulatory projects, on the other hand, Advocate has
developed enough of a template over time to simplify design development, so that
the partners know basically what to expect from project to project. “We’ve been
able to set a standard for the design overall, and then leverage that for
expanded use of prefabrication and modular,” he says.

With the Advocate Aurora Health ambulatory team, Nelson views the current multiparty IPD master agreement as one that will continue in perpetuity, although formally requiring it to be reviewed and renewed every five years. “We envision the partners staying on indefinitely, as long as the demand for ambulatory facilities holds out and the team continues to perform,” he says.

Dal Gallo maintains that five-year review should be required of all IPD master contracts, partly because the laws governing design and construction change but also to improve the documents by incorporating lessons learned. A major benefit of the master IPD is that it avoids the necessity of negotiating and drafting the downstream risk/reward subcontracts and consulting agreements after the owner, architect, and contractor have already executed the tri-party IPD agreement.

Similarly, the issues of insurance, liability, indemnity, and compensation are worked out upfront with the IPD master agreement, leaving only the project-specific business terms to be negotiated, which saves upfront negotiation time and legal expenditures.

The IPD approach, with its shared risk and reward among the parties, is probably most suitable for facility owners that are developing several projects or large, complicated projects sponsored by private owners, says Dal Gallo. Public agencies, banks, and other financiers can be put off by the risk that the owner will continue to pay direct costs (without profit) if the project exceeds the target cost, exhausting all the profit placed at risk.

As for the participants, it’s an adventure: “Once in it,” she says, “everyone succeeds or fails together.”  

Richard L. Peck is a freelance writer based in Lakewood, Ohio. He can be reached at peck.richard117@gmail.com.               

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Lori Weitzner x Artistic Tile Collaboration Wows at HD Expo

An example space featuring the Forest pattern in the Whisper colorway. Photography courtesy of Artistic Tile.

 

Collaboration is the name of the game in today’s design industry. Pairing the inspired sensibilities of a big-name designer with a manufacturer whose technical capabilities can realize their vision has resulted in some stunning products over the years. It’s also highlighted the robust abilities of manufacturers to not only fabricate product, but act as talented design partners in the creative process.

The latest iteration of this trend can be found at HD Expo, where Artistic Tile unveiled two new collections made in collaboration with award-winning textile designer Lori Weitzner. Designed specifically for interior vertical surfaces, the Lori Weitzner x Artistic Tile Collaboration features two organic patterns, River and Forest, that originated at Weitzner’s White Box Sanctuary Studio.

Read more: Kohler’s WasteLAB’s Crackle Line with Ann Sacks Breaks the Mold 

The River pattern in the Night Shadows colorway. This look is rendered in China Black marble. Photography courtesy of Artistic Tile.

 

“When Artistic Tile first proposed this collaboration, I knew our studio could bring something to them that they didn’t currently have in their portfolio,” explains Weitzner. “Organic, textural looks are something that our studio does very well. For Forest and River, we created a lot of preliminary looks through painting, drawing, and paper folding. Then we worked with Artistic Tile to narrow down the selection.”

In exchange for her substantial expertise in creating earthy, tactile patterns with textiles, Artistic Tile opened up a whole new world of materials for Weitzner to discover. “I had no idea there were so many different kinds of stones in world—it was an eye-opening experience for me,” says Weitzner. “Because I didn’t have much knowledge of what was actually possible to create with stone, I could really push the envelope in terms of coming up with patterns. The exceptional design team at Artistic Tile would then say ‘Oh we can’t do that, but maybe we could try this.’ Everyone really benefitted from working and exploring together.”

The Forest pattern in the Whisper colorway. This look is rendered in Bianco Carrara marble. Photography courtesy of Artistic Tile.

 

When it came time to select colorways, Weitzner and Artistic Tile settled on three varieties of marble in black and white tones. “Sometimes people don’t think of whites and blacks as colors but they absolutely are,” says Weitzner. “We selected whites and blacks that create mood and easily serve as backdrops to other colors, but aren’t dead.”

The Whisper palette utilizes Bardiglio Nuvolato and Bianco Carrara marbles. The lightness of these stones creates an ambiance of calm, quiet, and sanctuary. On the opposite end, the Night Shadows palette veers towards a masculine, urban sophistication rendered in China Black marble.

Both River and Forest are available now for specification. 

Watch now: Product Insight: ExCinere by Dzek in Collaboration with Formafantasma

For More Information About This Blog Post, Click Here! 

Lori Weitzner x Artistic Tile Collaboration Wows at HD Expo

An example space featuring the Forest pattern in the Whisper colorway. Photography courtesy of Artistic Tile.

 

Collaboration is the name of the game in today’s design industry. Pairing the inspired sensibilities of a big-name designer with a manufacturer whose technical capabilities can realize their vision has resulted in some stunning products over the years. It’s also highlighted the robust abilities of manufacturers to not only fabricate product, but act as talented design partners in the creative process.

DEADLINE EXTENDED: Enter the 2019 HiP Awards by May 17th

The latest iteration of this trend can be found at HD Expo, where Artistic Tile unveiled two new collections made in collaboration with award-winning textile designer Lori Weitzner. Designed specifically for interior vertical surfaces, the Lori Weitzner x Artistic Tile Collaboration features two organic patterns, River and Forest, that originated at Weitzner’s White Box Sanctuary Studio.

Read more: Kohler’s WasteLAB’s Crackle Line with Ann Sacks Breaks the Mold 

The River pattern in the Night Shadows colorway. This look is rendered in China Black marble. Photography courtesy of Artistic Tile.

 

“When Artistic Tile first proposed this collaboration, I knew our studio could bring something to them that they didn’t currently have in their portfolio,” explains Weitzner. “Organic, textural looks are something that our studio does very well. For Forest and River, we created a lot of preliminary looks through painting, drawing, and paper folding. Then we worked with Artistic Tile to narrow down the selection.”

In exchange for her substantial expertise in creating earthy, tactile patterns with textiles, Artistic Tile opened up a whole new world of materials for Weitzner to discover. “I had no idea there were so many different kinds of stones in world—it was an eye-opening experience for me,” says Weitzner. “Because I didn’t have much knowledge of what was actually possible to create with stone, I could really push the envelope in terms of coming up with patterns. The exceptional design team at Artistic Tile would then say ‘Oh we can’t do that, but maybe we could try this.’ Everyone really benefitted from working and exploring together.”

The Forest pattern in the Whisper colorway. This look is rendered in Bianco Carrara marble. Photography courtesy of Artistic Tile.

 

When it came time to select colorways, Weitzner and Artistic Tile settled on three varieties of marble in black and white tones. “Sometimes people don’t think of whites and blacks as colors but they absolutely are,” says Weitzner. “We selected whites and blacks that create mood and easily serve as backdrops to other colors, but aren’t dead.”

The Whisper palette utilizes Bardiglio Nuvolato and Bianco Carrara marbles. The lightness of these stones creates an ambiance of calm, quiet, and sanctuary. On the opposite end, the Night Shadows palette veers towards a masculine, urban sophistication rendered in China Black marble.

Both River and Forest are available now for specification. 

Watch now: Product Insight: ExCinere by Dzek in Collaboration with Formafantasma

Continue reading Lori Weitzner x Artistic Tile Collaboration Wows at HD Expo

ASID Events

NATIONAL
MAY
9
2019 EXP Speaker Series: Team Leadership Essentials

DESCRIPTION

Join ASID and Renée Safrata of VIVO Team Development for a series of live webinars designed to enhance your leadership skills in the areas of communication, productivity, collaboration, accountability, and performance. As a precursor to The Leadership Experience: Presented by ASID (EXP), this webinar series sets the stage for personal growth and leadership development and will prepare you for the experiential learning offered at EXP, July 18-20 in Atlanta.

The more webinars you attend in this series, the greater discount you will receive on The Leadership Experience Pass. Get the details below.

DATE AND TIME

3:00 PM
5/9/2019 – 5/23/2019

LOCATION

Webinar
United States

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Description

Learn the importance of listening to effective team productivity and collaboration. Communication is critical to any relationship and the most fundamental of all the soft skills. It is the most important of the six key indicators of highly functioning teams.

In this webinar you will learn:

  • The missing step in creating effective communication
  • The costs associated with ineffective communication
  • The two types of listening skills necessary to communicate effectively in the workplace
  • The need for clarity of action before executing on tasks to avoid costly errors
  • New techniques and one common model for effective listening and communication in the workplace
  • The skills to lead and manage others to accomplish team goals and objectives
  • To hone your communication skills and listen more effectively, deliver inspiring feedback to improve performance, and create a culture of accountability for your team.

Description

Discover the power of the three “F” words to inspire and engage people to improve their performance.

In this webinar you will discover:

  • Feedback alone doesn’t work. Research tells us that about one-third of the time feedback leads to momentary performance improvement; one-third of the time it results in nothing; and in one-third of cases, leads to worsening performance.
  • The real dynamics of “negative” and “positive” feedback
  • The one thing that will make a huge difference in your influence power

Description:

Explore how to motivate people so they become more accountable and do what they say they will do when they say they will do it.

In this webinar you will explore:

  • How accountable people get stuff done, drive results, and are more engaged
  • How avoiding conflict and creating a culture where being liked is more important than being respected can lead to lack of accountability in a team. As a result, staff produce low-quality work, miss deadlines, and engage in passive-aggressive conflict, causing team productivity to plummet
  • The tools to help the team succeed
  • Holding people accountable to motivate them to perform
  • The “Six Steps to Painless Accountability Improvement”
  • Accountability as a way of doing business that leads to higher engagement, increased satisfaction, and a huge ROI

Registration & Pricing

Register and attend the live webinars to receive special discounts on your registration to attend The Leadership Experience: Presented by ASID (EXP), July 18-20 in Atlanta.

  • Attend one or two live webinars: 20% off The Leadership Experience Pass
  • Attend all three live webinars: 30% off The Leadership Experience Pass

*Note: Discount code will be provided after attendance at live webinars.

Single Webinar: $39 non-member/$29 member

Two Webinars: $39 non-member/$29 member

The Complete Series (3 webinars): $99 non-member/$69 member

The Presenter

Renée Safrata, VIVO Team Development, was one of the most popular speakers at EXP 2018 and will be featured again at EXP 2019 in Atlanta, July 18-20.

Renée Safrata
Renée Safrata

VIVO Team Development

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Impact of Design Series, Vol. 5

studioIDS

StudioIDS is the new self-designed home of the Minneapolis office of international architecture and design firm Perkins+Will. The studio challenges what an office is and can be. Strategically located in the heart of downtown Minneapolis, the office focuses on landscape architecture, planning, architecture, and interiors in the areas of healthcare, corporate + commercial + civic, higher education, urban design, and science + technology.

 

WINNING PROJECT:

ASID 2019 Outcome of Design Awards (Category: Culture)

Project Type:

Corporate Office (Workplace)

Location:

Minneapolis

Size:

9,800 SF

Case Brief By:

The Design Challenge

The new studio design needed to support Perkins+Will’s local purpose of design excellence, sustainable stewardship, and social responsibility, in addition to becoming a model mobile and agile work environment. P+W sought to challenge conventional workplace models using less to offer more opportunity for choice, creativity, and collaboration.

 

The Design Solution

  • Participatory Design Approach that included all employees in the design process. The design team’s goal, as a living laboratory, was to measure pre- and post-occupancy to understand successes and areas for improvement.
  • Free Address System enabling users to adapt, define, and self-organize their workspace as needed. With this inherent flexibility and the use of non-precious materials, the space acts as a living laboratory for workplace strategies and innovation.
  • Restrained Material Palette using five core materials that are rapidly renewable and have toxin-free qualities: Aspen plywood, ceramic marker boards, homasote tackable surface, glass, and carpet.
  • Salvaged Materials from the previous office were used to make adjustable shelving in the gallery wall and large harvest tabletops in the cafe, and millwork was reused in the print and model shop rooms.
  • Social Cohesion was established through a partnership with a Minneapolis based furniture maker and by specifying a custom area rug from Arzu, a company that employs women and provides healthcare and education to them and their families in developing areas in Afghanistan.
IMPACT OF DESIGN
  • Perkins+Will reduced their square footage in half from 391 s.f./person to 130 s.f./person.
  • Employees reported a 40 percent increase in their ability to concentrate and a 43 percent increase in their ability to collaborate.
  • Sense of community increased by 61 percent in the new space and the sense of energy/buzz increased by 62 percent.
  • The project reused 16 percent of construction materials and 68 percent of furniture ($100,000 savings).
  • Fifty-five percent of materials were manufactured within 500 miles and 97 percent of new wood used was FSC certified.
  • The project had a lighting power reduction of 57 percent over the LEED code baseline.
  • With the use of low-flow fixtures, the project had a 77 percent reduction of water use.
PROCESS
Timeline
  • Design: March-July 2015
  • Construction/Approval: September 2015–February 2016
  • Project Completion: February 2016
PROJECT TEAM
  • Design & Research: Perkins+Will
  • MEP Engineer: Dunham Associates
  • General Contractor: Gardner Builders

Continue reading Impact of Design Series, Vol. 5

Multigenerational teams: Creating ageless collaboration

No matter what your age or generation you identify with, if you work in a creative field like design or architecture, you are part of a team. It doesn’t matter if all your team members are working under one roof or if they belong to different companies or disciplines. Design is a team sport.

Continue reading Multigenerational teams: Creating ageless collaboration

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