Turner construction

Turner construction company: Turner is the leading builder of green buildings and has extensive experience across a wide variety of sustainable construction projects.

1. Turner Construction Company Arrigo Gaetano Rinaldi Alessandro Organizational Design

2. Turner Construction Company In 1983, turner led building contractors in the value of contracts booked

3. Construction services Turner operated as General Contractor : a C ontractor plans to deliver (and built a portion of) a finished product to an owner ( customer ) Construction manager : A CM acted as the owner’s agent and adviser , providing preconstruction services and monitoring the firms that actually built the project . Contracts were : Lump -sum : an owner’s architect completed plans and specifications and then contractors bid on the project ; the contractors competed primarly on price , and their incentive was to meet specifications at minimal cost because their remunerations was the lump -sum price minus their final cost of materials and construction . Negotiated : contractor and owner worked together from the planning stage, negotiating specifications , cost estimates , a guaranteed maximum price , and the contractor’s fee .

4. Construction services Turner perfomed most of its work through negotiated fee contracts where it acted as both General Contractor and Construction Manager Planned and scheduled the project ; Procured materials ; Marshaled the different personnel required ; Awared and supervised subcontracts ; Assumed responsability for on-time completion at a guaranteed maximum price ; ‘’ Our business is a combination of consulting and underwriting : we buy risk and sell predictability ’’ ‘’ We manage all the project’s details for the owner and, because we’re involved early , we can guarantee a price earlier than the lump -sum bidder . Thus , the owner can begin arranging financing earlier and construction (and occupancy ) can begin sooner . TIME IS MONEY IN CONSTRUCTION’’ Turner’s senior vice president

5. Major Markets and buyers Commercial Turner Public Hotel/ residential Health care Commercial : Real estate developer Corporation building a new heardquarters Health care : Total hospital construction expenditures were expected to continue increasing ( due to financing through municipal bond offerings )

6. The Selling Process Winning a contract involved several activities : To locate prospects and create awareness of Turner’s capabilities in that building category ; ( in hospital construction , potential building was public knoledge and presentations at hospital associations were a common means of maintaining awareness of Turner’s services ; in commercial construction , contacts with developers and architects are crucial ) To meet with the decision makers ( architect or owner ); at this meeting, the territory’s business development manager sought information about both the specifications and the people involved in a project To send a proposal and references A 30- to 45-minute presentation to a board or development committee ; this presentation also covered preconstruction services such as cost estimates and scheduling Ivolved pricing , where lump -sum versus a negotiated fee contract was often a key issue

7. The Project Selection Selecting a project meant judging future demand and potential opportunity costs : Type of contract : lump -sum or negotiated The job’s size : bigger can be better , but large projects take years and carry risks concerning the availability and perfomance of subs during that time The owner : some developers will chisel away your margin , and some existing relationships take precedence over the other criteria mentioned Required staffing The level of business in the territory : often determines whether we commit to pursuing a job Whether it’s a client we want to get to know

8. Project Management Complexity of projects ( purchasing , scheduling , fabrication , inventory control, shipping , coordinating of subcontractors ) Project executive = key Turner person during construction Scarcest resource Territory manager had spent several years as project executive Local knowledge is fundamental Most projects required changes during construction lead by Fast changes in technology (Hospitals) Changes in owners mind Key words : Executive manager have to manage the owner proprerly with daily meetings « There are networks at each phase »

9. Organization Until 1973 Home office in charge for executive selling and for estimating / purchasing for large projects Starting from 1973 we had a reorganization of the Organization Chart…

10. Organization Turner corporate organization , 1984

11. Organization Turner Territory Organization

12. Organization Turner Typical Project Staffing

13. Organization

14. Organization Territory GMs had been with Turner for 20 to 25 years with experience in estimating , purchasing and project management GMs reported to regional VPs who reported to Kupfer GMs and VPs were measured on annual sales and earning goals

15. Recent developments Kupfer became executive VP in May 1983, previously he held the position of International Industries ’ president and senior VP for eastern region . He was responsible for corporate marketing and sale, contract administration , and strategic planning Two long- term development setted by him : Product specialization National accounts

16. Product specialization Hospital market: Turner had lost share in recent years to a new company (Park). Park is considered a «hospital construction specialist », it operate from corporate offices Ability to bring national resources to a hospital project «The core of precostruction service’s Parks is software that provides a fancy checklist of cost and design estimates » Park’s presentations are very professional

17. Product specialization Similar competition in correctional and high-tech industrial market In response to this competition Turner established in 1983 a «Management Consulting Service, M.C.S. » to standardize service among territories Some GMs welcomed these groups , wile others considered their involment redundant . What do you thing about this new function at the corporate level of Turner?

18. National accounts Various factors had increased the national scope of construction work Nationwide expansion of large regional developers and major architectural firms National insurance companies beginning to assume development as well as financing tasks in JV with developers Large retailers and manufacturers had expanded into national companies . IN 1978, Turner estabilished a National Account Program (N.A.P.) Objectives : develop a network for early detection of new business opportunities In 1984, corporate management was disappointed with this program National firms are not pursued aggressively or proactively In your mind, why the N.A.P. is not working well ?

19. National accounts Recommendations concerning N.A.P. Granting a territory some percentage of the operating fee if it performed “work of substance ” in generating a project for another territory Placing one or two senior managers as full-time NAP rappresentative at the corporate level Developing Turner’s product-specific capabilities beyond the MCS stage by establishing national groups for hospitals and correctional facilities .

20. Today ’s Decisions Commercial building project in territory A Turner had not previously worked with this owner but it had worked with DA (Design Associates ) for 30 years . All key staff available in territory… ( not really it the three previous proposal were successful ) Project’s starting date suggested a tight schedule Hospital Facility Group Turner had not built an hospital in territory A in the last decade and had not worked with HFG Kupfer believed the hospital market would be increasingly important and that the commercial-building market, while currently strong, was vulnerable to overcapacity in the near future.

21. Today ’s Decisions Call from business development manager of Territory B He reported a possible contract of renovation ($50 million ) for Goodnight Hotels national chain A senior VP of Goodnight Hotels request a uniform standard of service and fees through the United States

22. Q&A session End