Team Selection Costs Everyone

Posted on May 7, 2014

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Pursuing work costs any enterprise money—opportunity cost as it is discussed in business.  When a hospital needs ideas from professionals, it costs both the hospital and the professionals money to find each other and complete the business development courtship to win a job, regardless of formalities.  Several past posts have noted how hospitals affect this investment from the early stages of a professional relationship.

There are numerous ways, both effective and ineffective, for a hospital to select a group of smart pros to provide insight, just as there are numerous ways for an architect, builder or consultant to find work.  What percent of the bottom line is worthy of allocation each year toward new business pursuits is debatable, and differs by industry.  Maybe you have heard the John Wanamaker quotation on marketing investment:  ‘”Half of the money I spend on marketing is wasted; the trouble is I don’t know which half.”  There is waste, but without more information, to opt out completely would likely be disastrous.

Still, within project pursuits there are good odds and long shots.  A long shot for a hospital might be to host an international design competition for their next 20,000 square foot renovation.  This approach is simply not wise.  Similarly, pursuing federal design-build work has been a historic long shot for most firms.  According to an AIA Large Firm Roundtable study, the cost to pursue a single such project is roughly $260,000.  Luckily, legislation is in progress that might streamline the steps that make this such a costly endeavor for firms.

While talking with some Department of Veterans Affairs (VA) colleagues, which selects quite a bit through the expensive design-build process in question, there are some creative ideas percolating.  Some ideas include cutting out steps in the process, reducing submission deliverables, simplifying contracts, and even awarding ‘clusters’, or a group of projects at once.

Whether it was federally driven or lobbied from the firm’s side, someone is trying to improve a broken federal process.  The wrong process can hinder the ability to do business effectively, whether providing care or purchasing services.  Fortunately, hospitals do not have to pass federal legislation to get better.  Some of the ideas the VA is entertaining could help all manner of healthcare providers better find and hire teams.  That said, how many hospitals have similar streamlining on their ‘to do’ lists for 2014?

 

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