Incentivizing change: Show me the money

I recently moderated a panel discussion in the UK co-hosted by the CIOB and Construction Manager, where UK BIM managers and consultants from both the UK and US explored the timely question, “The UK BIM Level 2 mandate: was it a success?”

It became clear almost immediately that defining exactly what was meant by “success” was going to be a lot harder than answering the question! “Success” is generally defined as “achieving your goal”—but whose goal are we referring to when it comes to the UK BIM mandate? The UK government’s goal? The building owner’s goal? The contractor and subcontractor’s goals? Every one of these groups views “success” differently. Some might define it as industry-wide compliance, while others see saved time and increased profits as the goal.

So who is succeeding, and on what terms? And what will it take for everyone to experience the benefits of that success?

Let’s start looking at this question by agreeing that the UK BIM mandate will be a success when the building owners, architects, engineers, contractors, subcontractors and facility managers all benefit from implementing the change. There’s no way actual success can be defined as one group profiting while another group suffers.

The truth is, implementing BIM, a system designed to root out and minimize risk, is in fact a risky proposition for many of the groups who are required to implement it. This is because the risk BIM seeks to eliminate has value, especially up front, and that valuation is often left out of the equation. Let’s face it: there is money to be made from taking on that risk.

So I think we need to face the real, underlying challenge head-on, which is to redefine the true value of a project over its total lifespan so everyone can benefit from the increased efficiencies BIM introduces.

The total value of BIM is realized over the lifetime of a building—30+ years. All the relatively short-term value saved up front by sharing data and modeling information during the construction phase gets lumped into the long-term F&M value, which both yield significant savings.

This clearly benefits the building’s owner, should they hold onto the asset or choose to sell at a higher price based on projected long-term profits. So owners might say the BIM Level 2 mandate is succeeding at increasing their bottom line. But the owners aren’t the only ones looking to define success through greater profit. What about the architects and the engineers? The contractors and the subcontractors? How is the BIM mandate going to make them more successful?

For these players, the successful implementation of the BIM mandate can’t be defined as simply sharing data on the jobsite for the benefit of others. As much as we all want to “do the right thing,” the economics of construction are such that compliance means less risk and fewer billable hours. The benefits of working harder on more projects to make the same money doesn’t really seem like progress.

In order for everyone involved to embrace the mandate and take on the mammoth job of implementing new technologies and workflows, the teams taking on the bulk of the work have to be able to experience their fair share of the profits. If the efficiencies create profit over a 30+ year timeframe, then the way building projects are financed needs to change in order to ensure everyone experiences the benefits. Valuing a construction project over the building’s entire lifecycle with the long-term benefits of BIM built into the equation would result in increased capital being made available up front to replace the real-world risk and profit BIM eliminates.  

More money available during the construction phase would reflect the increased value realized over the entire building’s lifespan. BIM implementation could then be rewarded by replacing the profits associated with assuming risk under the old model with profits earned through compliance with the new BIM model.

People need incentives to make changes. It’s human nature. Mandates by themselves may deliver simple compliance, although implementation can be painful and the benefits are often obscured. Bonuses related to boosted performance work, but you can easily end up with uneven results as groups of highly skilled companies emerge that outpace the competition. The combination of both has to be the way forward, leveraging mandates and bonuses together to level the playing field by rewarding increases in productivity on projects that have been appropriately valued.

As for the question we originally proposed, “BIM Level 2 mandate: was it a success?” We’re getting there. Ultimately, people will believe in what works for them. As Fred Mills, Director for The B1M said on the CIOB panel, “Real change is like jumping off a cliff and then trying to build your wings on the way down.”  It’s our job as industry professionals to ensure whatever means and methods are used to deliver on the promise of BIM, everyone benefits equally. And that’s a definition of success we can all agree on.