Mr. Hill

Architecture & Design

Creating Value at Conception and Removing “VE”

By Roger G. Hill , Chief Executive Officer & Chairman, The Gettys Group Inc.

Co-authored by Jerry Zeitner, Principal, Gettys

The primary mindset for any hospitality project is constructed around the client’s vision, the property’s aesthetics, and the appeal to the future clientele. Unfortunately, more often than not, the design that evolves and takes on life doesn’t tend to meet one of the most important facets of the project – the budget. In an attempt to salvage the design that has already taken what seems like an eternity to perfect and reassure the client that all is well, many take a dangerous leap into a black hole called Value Engineering. Like any black hole, the design and information that enters into the Value Engineering realm cannot be retrieved and rescued. The design can crumble into an unknown subject matter that hardly resembles the original, ending with a budget that works and a design that doesn’t. At the end of the project, did anyone really get what they want or have they settled for something that has made no one on the team happy?

The question to ask is how does one get all of the pieces to work in sync? The design, budget, and vision must be created from a single point of origin. Value Creation, unlike its Value Engineering adversary, should be at the forefront of project planning. Value Creation should be what is driving the project from beginning to end. What sense does it make to start looking for value halfway through a project?

For years the term Value Engineering has been a catch-all moniker for ways to reduce a project’s budget albeit after the project is underway. Typically, this plan of action includes reducing the scope of work or modifying design with high hopes that everything still meshes in the end.

Value Engineering is solely driven by cost and budgeting, where Value Creation is steered by the overall aspects of a project that benefit an owner. At GETTYS, each of our projects is defined with the Value Creation approach immediately in mind.

First, we address the project constraints and then examine each of those to determine how best to work within the parameters including client expectations. Once the constraints are clearly identified be it budget, supplier selection, tight timeline, etc., we then summarize these specific hurdles and put a plan together from a dollar and cents perspective, which touches on each very important factor. Through this total cost approach, the best plan is to look into the overall budget and then outline every cost driver (inclusive of both finances and time) in the project, including but not limited to: supplier sourcing, product – FF&A as well as OS&E – project logistics, and ultimately installation.

We then examine how each of the costs affects the important design details and aesthetics. Cost efficient solutions are then formulated with specific focus on areas that are potentially less noticeable by the guest or end user while conversely spending more appropriately in higher touch locations.

One simple example of reshaping areas and their respective costs can be found in material identification and justifiable re-selection. In this instance, certain upholstery materials, especially leathers, originally specified in guestrooms can quickly be re-sourced utilizing high quality vinyl alternatives. This provides the exact look a designer is seeking while at the same time succeeds in the reduction of an overall price of a piece by 3-5 times (and in some instances more) compared to the original specification. GETTYS implements this approach across the board analyzing each and every specification within the project’s scope of work. It is an integral step in the process leading up to the procurement of product which meets everyone’s expectations.

Not only does this keep surprises to a minimum, Value Creation also means an early, solid relationship with all team members. Value Creation enables all involved parties the forum to decide what works best under the specific scenario umbrella. While each project and client opportunity is different, it is paramount to bring every idea to the table to ensure the overall success of the project.

In typical design/procurement scenarios, the procurement agent is often brought on-board after the design is completed. GETTYS believes true procurement experts understand their job is to uphold the integrity of the design and at the same time find a creative approach to assist with making all parties happy. Having a procurement expert as part of the team from the onset of a project is a simple way to help reduce risk in all aspects of a project.

When planning the project, the end result can only be improved by having procurement work with and alongside design rather than after. Budgeting, design, and bidding can be a fluid and ongoing process that begin and finish together. With design, procurement, and ownership involved from the beginning, everyone can feel comfortable that the ultimate product will not just fit the budget, but also the design, intent, and function.

We know our clients and we know what’s most important to them. Opening a hotel on time while making sure the hotel is manageable and operable are the priorities above all else. GETTYS accomplishes this by working with suppliers that fit within the allocated lead time windows and produce a finished good that exudes quality. As with Value Engineering this doesn’t mean simply selecting the low bidder; from experience we know that they represent a deadline and quality standard risk. That’s where Value Creation helps us plan for the unplanned as we tap our experience to foresee potential issues. We pay close attention to specifications and work with the design team to understand their vision. Some questions we ask include:

• Do the sofas and casegoods dimensions work with the layout of the elevators and hallways for seamless integrations and installation?
• Are the fabrics on the sofa durable enough for use in a hospitality environment and do they meet all local coeds and testing requirements?
• Is the carpet going to withstand the client’s timeline for replacement?
• Are we designing and procuring furniture and fixtures that are easily maintained by the hotel staff?
• How will the everyday wear and tear affect any and all of the materials?

Value Creation is inclusive of the entire supply and demand chain process taking into account all aspects of design in conjunction with all of the strategic and tactical aspects of the delivery methodology from start to finish, i.e., sourcing, product manufacturing, freight and warehousing logistics.

In the end, Value Creation is the act of producing value or causing value to exist, whereas Value Engineering, simply stated, is arranging and managing a project once the cards have already been dealt. While the thought of Value Creation seems like common sense, it is surprising how the lack of this simple and effective approach can have long lasting effects on the project.

For the last decade, GETTYS shifted its methodology from the conventional ideal of Value Engineering to that of Value Creation. To that extent, Value Engineering is a term rarely mentioned in our vocabulary. We begin with a great design and end with a final product that is finished on time, within budget, and ready to immediately start producing ROI for the owner. Isn’t this the goal of every project?

As Gettys continues to expand its hospitality expertise into hotel development, Mr. Zeitner, once again, has been one of our internal vanguards, leading the development and investment arm, acquiring and redeveloping complex, large-scale projects in gateway urban markets. He advises on feasibility and due diligence analysis, capital improvement budgeting and ROI analysis, brand and management company identification and selection, and master planning and project management both for Gettys' own development projects and in a consultant capacity for clients.

This article was co-authored by Jerry Zeitner. Mr. Zeitner is a 20-year veteran of the hospitality industry, with a depth and breadth of hospitality experience that brings incredible value his partnerships and projects at Gettys. His career has traversed from the front and the back-of-house at several Hyatt properties throughout the United States, as well as Project Management positions at the flagship Hyatt Regency Chicago and the Hyatt Hotels Corporate offices. In his decade of experience at Gettys, Mr. Zeitner has held several key positions beginning as a Project Manager. As Gettys grew and increased its interests in Procurement, Mr. Zeitner transitioned his focus to direct that business unit, becoming one of the key developers of Gettys' proprietary Integrated SolutionsT procurement management system.

Nearly 25 years ago, Roger Hill co-founded Gettys, a Top 10 hospitality interior design, procurement and development firm. Under his leadership, Gettys has grown to a global team of business-minded professionals who specialize in hotels, resorts, spas, casinos and mixed-used developments the world over. A respected industry veteran, he is frequently called upon by hospitality and business media outlets to provide insight into the redevelopment, renovation, and repositioning of hotels. A graduate of Cornell University, Roger has served as an appointed delegate for the White House Conference on Small Business, and is a member of ULI, YPO and ISHC. Mr. Hill can be contacted at 312-836-1111 or info@gettys.com Extended Bio...

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