Build or Die

A Knowledge Management Exercise

Prepared by: Arch. Edgardo L. Mallari TM298-Knowledge Management

1. HIVE309. Company Profile.

Hive309, Incorporated is a design and construct firm with office at 2554 Alejo Aquino
Street, Vito Cruz, Manila. The firm is being managed by four partners, three of which are
architects and the fourth is a civil engineer. Hive309 had been in existence for more than 12
years under an evolution of three other different business names. The changes in business
names were due to changes in the incorporators and some modifications in the nature of
the business itself.
Due to the recent economic downturn and the cut-throat nature of the Architecture,
Engineering, and Construction (AEC) industry, projects are coming in at turtle pace. At this
rate, Hive309 will not be able to sustain the existence of the firm for long. The traditional
process of marketing, design proposal (schematic design, design development) is a tedious
workflow and does not always guarantee of a contract. Even a contract at this time is not a
guarantee of revenue unless down payments are received from the clients. The traditional
process mentioned involves overhead costs which are additional burden to the firm.

2. KM Methodology. Future Center.

The KM exercise was done as a creative brainstorming session among a group of AEC
professionals and industry practitioners who are familiar with the present challenges, future
trends and business environment of the industry. It was patterned after the “Future
Center,” a process of using "out of the box" thinking to identify promising strategies or
business models for a specific industry. According to Dr. Ron Dvir, the founder of Innovation
Ecology (2000) and co-founder of Future Center Alliance (2008), a future center is a
facilitated organizational space dedicated to support an organization in its efforts to prepare
systematically for the future and address it in a proactive way. Future centers nourish
radical open innovation and complement other functions of the organization. Based on the
Innovation Ecology website:
a. The center provide the employees and other stakeholders an "Ecology for
Innovation" – a climate that encourages innovation, wild ideas, and co-creation.
b. The center provides the methodology, facilitation, expertise for identification,
analysis of (very) long term threats, trends and opportunities. We call it "a future
image".
c. The center is a space for focused continuous dialogue between stakeholders. It is
where scenarios, radical policies and alternative futures are envisioned and
developed, and the basic assumptions of the organization are refreshed.
d. It facilitates the meeting of ideas and resources (financial, organizational, political
and human resources).
e. It is a place for rapid prototyping of new products, services, business concepts, and
ways of working.
The informal brainstorming session resulted in the identification of various factors
affecting the business environment of Hive309 and the construction industry in general.
Through a SWOT Analysis, the Strengths, Weaknesses, Opportunities, and Threats affecting the
Hive309 as well as the industry were identified.

3. SWOT Analysis
a. Industry Strengths
Notwithstanding the calamities brought about by typhoons Ondoy and Pepeng,
soaring oil and food prices and the global crisis, the Philippine economy grew by
3.0% in 2009 as OFW remittances remained strong. Although there was a slowdown
in construction industry growth last year (2009), the Construction Industry Authority
of the Philippines’ (CIAP) outlook for 2010 is very promising. According to CIAP, the
Philippine Construction Industry (PCI) value for this year has a 7.16% real growth
data. Furthermore, from 2010 up to 2014 year on year, a 10% real growth data for
the PCI is expected. These data further reinforce the industry’s strengths.
b. Industry Threats
There are a number of threats to the above-mentioned construction industry
outlook. Prices for construction materials increased in April and May 2010, and in
June Holcim Philippines announced it would increase its cement prices in the
country, starting June 21 2010, further confirming the announcement made by the
Board of Investments (BOI) that Philippine cement is one of the most expensive in
Asia, second only to Indonesia. Rising prices for cement in the country have been
blamed, in part, on the cost of electricity. The high cost of electricity, and the
intermittent supply, could also pose a threat to the construction industry value
growth. The Philippine Contractors’ Accreditation board (PCAB) issued 5,069 licenses
for local contractors. An additional 21 licenses for foreign contractors were issued
for 2009-2010. These industry competitors are threats to Hive309 as a business
entity.
c. Industry Opportunities
Ironically, one of the largest areas of potential in the Philippines’ infrastructure
sector – the renewable energy sector, is also a threat. Investment pledges have been
received for 87 projects, of which, 70% were for power projects, including
renewable energy and rehabilitation projects. This data presents further upside
potential to our forecasts. Despite the passing of the renewable energy act in 2008,
which set up a feed-in tariff for renewables, it has yet to define the levels for each
individual technology under the renewable bracket, including - solar, geothermal,
biomass, wind and small hydro. This is causing uncertainty in the market; indeed, in
June 2010, Northwind Power Development put a new wind farm on hold for a year
to be located in Aparri, Cagayan. Despite this, the creation of the Wind Energy
Development Association (WEDAP) of the Philippines by a number of power
companies, in June 2010, does present potential for better regulations in the sector,
and therefore facilitating investment. The association's main focus is to promote and
support the development of wind power in the Philippines, as well as influence
policy creation under the Renewable Energy Act.
d. Hive309’s Core Competence / Strength
 In terms of architectural design skills, Hive309 takes pride in generating innovative
and custom design solutions for its clients. Hive309 believes in rendering no less
than pure architecture as a professional service. Two of the partners have extensive
experiences in Singapore’s progressive architectural firms. The other two partners
are seasoned builders who equally have diverse experience in the construction
industry.
e. Hive309’s Weaknesses/Threats
Hive309’s core strength is ironically its primary weakness. Too much design zeal
compromise its target profit margin most of the time. A lot of sacrifices had been
made to satisfy design urges which were not on the original project costing. Too
many architects make too bad a living: a problem that is largely the result of
believing that quality design will inevitably lead to decent clients and a fair income.
The firm’s design partners lack the design pedigree or labels that clients look for.
Great buildings and pictures were the first branded products, the authors’ name
adding value to stone or canvas. Fame is to an architect or an artist what brand
value is to soap. Formal documentation of processes does not happen in Hive309,
hence, pertinent knowledge related to design and construction are not codified. Just
like any other AEC industry player, Hive309 employs the services of an accountant as
a glorified bookkeeper. Accountants should be business consultants and professional
mentors. They can provide invaluable advice about how and when to take on staff,
whether or not to buy an office, what fees to charge and even (legally speaking) how
best to configure the business. Sadly, that accounting principle is never practiced in
Hive309. “Marketing” is hardly in the vocabulary of architects. Most architects are
victims of the myth that the quality of their work is their best marketing tool. Good
work is, of course, crucial to the success of any practice, but it is of little use if no one
has heard of it. Part of the problem is that many architects are curiously non-
commercial, and consider that the art of their profession ought not to be sullied by
the dirty act of actually marketing it. Charging the right fee is another problem area
of the firm. Our country does not have a “design paying culture” yet. Clients tend to
argue that designs are just drawings and as such do not require standard
professional fees. More than 25,000 Registered Licensed Architects (RLA) pose a
threat to Hive309 as a design professional. The total RLAs are from the United
Architects of the Philippines (UAP) alone. Quite a number of architects are also
registered with the Philippine Institute of Architects (PIA). The Republic Act 9266
known as the “Architecture Act of 2008” states that only architects can sign and seal
architectural plans. However, there are allied engineering professionals who up to
now are violating R.A. 9266’s provisions. The borderless practice approved by the
Professional Regulation Commission (PRC) through the Board of Architecture (BOA)
is also a big threat to Hive309 as a design professional. Through the said borderless
practice, architects from 9 ASEAN nations plus 18 APEC nations may practice
architecture in the Philippines provided they collaborate with local architects.
f. Hive309’s Opportunities
Hive309 has to redefine its core values as a design professional and look at a more
focused practice rather than being a sort of “jack of all trade.” It must find its niche
 in the AEC industry, capitalizing on the opportunities of Green and Sustainable
Building requirements brought about by the global climate change. The borderless
practice of architecture, although a threat, is more of an opportunity in terms of
knowledge management. Through design collaborations with ASEAN and APEC
design professionals, knowledge and technology transfer will be possible. These
opportunities have to be formally codified so that Hive309 will reap the benefits.
The way that we communicate with one another has dramatically changed over the
last decade. The unprecedented use of the internet as a knowledge base has forever
changed the way information is accessed and shared. Technology, architecture and
new media technology in particular are redefining the way we work and play. As
architects living in this ‘new’ world, Hive309 has to leverage on such technologies,
tools and products to build better and serve the profession more responsibly. In
terms of construction, Hive309 can be its own client. Low-cost property
developments, financed by a spin-off business firm, are opportunities to showcase
the design prowess of Hive309. These property developments are also opportunities
for more diverse business ventures and exposures.

4. Recommendations
Success depends on a complex matrix of variables including marketing, cash flow, vision, the
ability to open up separate income streams, the advice of a good accountant and pure luck.
In the AEC industry, the quest for success can be really daunting. With the right Knowledge
Management tools, Hive309 still has a chance. Mining tacit knowledge and codifying these
knowledge is a must. Knowledge sharing through professional collaborations, linkages, and
Communities of Practice are good channels of topping up on relevant information not only
in the construction industry. Hive309 will benefit a lot in utilizing a web-based portal where
its professional services are offered and easily disseminated. Technology partnership with
web developers can be explored to offer professional web-based services relevant to the
design profession, gathering of the voice of the customers, collaboration, and knowledge
management.