Capital Project Solutions – March 2012 The Final Countdown: Project Launch Curtis Skolnick, Vice President As anyone who has ever seen a space shuttle or rocket lift off into space can attest, the National Aeronautics and Space Administration, NASA as we know it, is an expert in launch. The iconic video images of the Saturn V rocket blasting Apollo 11 and her crew into space across our TV screens on that July day in 1969 for the sole purpose of landing on the moon, truly represents the point of no return. Once that massive vehicle rumbled off of the Florida coast, there was no turning back. The launch in and of itself is an event, but not the goal of the mission. Not executed properly, the launch can be disastrous and prohibit reaching the goal of the mission. Thinking back to that day, and many other space missions since then, a simple question can be asked: “What kind of preparation does it take to successfully launch a space craft and her crew into space?” Do we think NASA engineers, scientists, and astronauts woke up one morning thinking it would be a neat idea to walk on the moon and then a few months later merely leapt into space? Of course not. Only after years of study and preparation, involving teams of experts working together as a cohesive group towards one goal – one vision – set by President John F. Kennedy in 1961, did that momentous day come. So what on earth does this have to do with a major healthcare capital facility project? It Starts With a Vision Typically, as with JFK, the decision to embark on a large building project (such as the addition of a new patient tower, the construction of a new ambulatory “healthplex”, or the replacement of an existing, outdated hospital) starts with a vision from organizational leadership. In today’s healthcare environment, the vision typically involves improving the physical environment as an enabler to meet the healthcare needs of a population, achieve higher quality at a lower overall cost and deliver care in an efficient manner, in a patient-focused environment. The vision of the project can usually be clearly articulated and rallied around by everyone in the organization. What is typically less clear is the path and preparation it takes to actually launch a project.
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Capital Project Solutions – March 2012 The End Depends on the Beginning Much like lift-off and then lunar landing, everyone will remember the ground-breaking, topping-out, and grand opening ceremonies of a construction project as these are the public examples of years of hard work conducted behind the scenes by a dedicated team of individuals. No one gets to these points without properly launching projects. Launch can simply be defined as “To start on a course” or “To get going; initiate”. Without properly launching a project in the beginning, can a successful result be expected in the end? The Launch Phase of a facility project is the most critical part of the delivery process, but it is also the least understood. During this Phase, the project delivery team is formed; the scope, budget, and schedule are defined, and the project implementation plan—the foundation on which the project will be planned, designed and constructed—is established. Healthcare Owners must allocate sufficient time for the Launch Phase and ensure that the Design Phase does not begin before the Launch Phase is complete. This will increase the likelihood of success, especially from the cost and schedule perspective. A successfully completed Launch Phase makes the design, construction, and transition and occupancy phases pleasant and collaborative rather than adversarial, unnecessarily costly, and frustrating. The Launch Phase focuses on organization and planning. It sets the project expectations and defines the “Big Three”: project scope, budget, and schedule. Organizational leadership, typically the Chief Executive Officer (CEO) should drive this phase, assembling and preparing the internal and external delivery teams. Early in the Phase, the CEO and key team members solidify a project vision and guiding principles that serve as “guardrails and touchstones” for the project. Team members establish a system of checks and balances that ensure that the strategic master facilities plan and project vision are transformed into a solid project implementation plan. Critical decisions on project scope, budget, and schedule should be made during this phase, because changes at this early stage will have less effect on costs.
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Capital Project Solutions – March 2012 The importance of properly launching a project cannot be overstated. Some benefits include: The likelihood of project success is greatly increased if Launch is executed before the Design Phase begins. Project goals, expectations, and conditions of satisfaction are defined and team members and key constituent groups are aligned. Changes to the project can be made early, prior to design and construction. Changes at this time are less costly in terms of both money and time. A collaborative and creative team environment for internal and external project members is created, thus making the whole greater than the sum of its individual parts. Elements of Project Launch Setting the scope, schedule, and budget are essential but Launch also establishes project controls and defines key project parameters prior to design. So what are the major elements of Launch and what needs to be contemplated, considered, discussed and defined prior to design and construction? Strategic Master Facilities Plan: A Strategic Master Facilities Plan should be completed that addresses market need, workload and capacity projections, operating parameters, and facility requirements (e.g. master space plan, organizing concepts, master site plan, etc.). The facility plan should be a tactical element that helps an organization meet a specific strategic objective. Project Vision & Guiding Principles: A common vision and set of guiding principles should be established. The vision should state the overall goals of the project and the guiding principles should summarize major operational and design goals (e.g Evidence Based Design, Sustainability, flexibility, safety, efficiency, etc.) Site Analysis & Land Acquisition: Investigate and complete necessary “due diligence� on any new site (e.g.
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Capital Project Solutions – March 2012 ALTA surveys, environmental assessments, wetlands studies, etc.). Ensure that all land encumbrances are known, the site is zoned properly, and under proper ownership control. Project Delivery Approach: Define the approach you will utilize to deliver the project whether it be design-build, CM at-Risk, or an Integrated Project Delivery (IPD) approach. Establishing this approach early will ensure a smooth selection of external project delivery team members later. Project Delivery Team Organization: Make sure your internal leadership team is invested, educated, and organized. Once the internal team is ready to go, they should then develop a structured and logical approach for external team member selection (e.g. design team, construction manager, and project manager). Alternative Financing Opportunities: How are you planning to fund this capital investment? Will the project be financed through operating reserves, bond issuance, philanthropic funds or some other delivery method? Make sure you know where every dollar is coming from and the potential non-traditional alternative funding sources that may be available to you. Integrated Process Planning: Develop a detailed roomby-room space program based on scope, efficient operational assumptions, and clinical strategy / future care model. Ensure that all internal users have provided input and accepted the program plan. Master Program Budget: Develop a realistic total project budget that is fully vetted internally and externally. The budget should match the project scope, financial ROI targets, and available funds. The budget should include not only construction cost, but the cost of furnishings, equipment, technology, consultant and design fees, site work, escalation, and contingency. Master Program Schedule: Similarly develop a realistic detailed schedule that includes all project elements including launch, planning, design, regulatory approvals, construction, activation and post-occupancy activities.
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Capital Project Solutions – March 2012 Medical Technology & Equipment Strategy: Define your technology and equipment strategy. Will you be re-using equipment or purchasing new? What type of technology platform will you be using and how will IT be incorporated into operations and design? Medical technology and equipment are major budget elements, so leave yourself ample time to discuss and define your approach. Regulatory Approval Process: Make sure you comprehensively understand regulatory approvals such as zoning and Certificate of Need requirements. Develop a strategy to address these and other approvals as they will definitely impact your project scope, schedule, and cost. Adequately define the project needs prior to gaining regulatory approvals as you will want the project to define the approval approach, not the other way around. Activation & Occupancy Strategy: It may seem like Launch is an odd time to discuss occupancy, however, begin discussing how you plan to operate in the new space and ultimately move in. Developing a basic Facility Activation strategy early on will ensure that enough time and resources are allocated to this important project element – start strong, finish strong. Are you ready to Launch? Finally, if you are certain that you are ready to launch, conduct a Launch Gap Analysis (LGA) that assesses the elements above. Project Launch and a LGA align expectations with project objectives while validating the plan of action to get everyone moving in the same direction prior to design and construction. With so many things on the plate of busy executives, this type of due diligence can help to avoid distractions that may derail a project and hinder meeting important strategic objectives. In reviewing this information you found yourself scratching your head and thinking “Hmm, I hadn't thought of that", do yourself a favor, as there is no turning back - proceed only once you are truly prepared to Launch. For more information on Project Launch and other Capital Facility topics, visit KLMK’s Educational Insights.
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