Victor R. Ortiz
I have always been interested in Psychology -- the study of the human mind. Early in my career I learned this important truism: Success and failure in life are the result of the solutions we choose to deploy. Life's challenges come at us in a constant stream and cannot be avoided. Every day we face choices about how to spend our time, how to mange feelings and relationships, how to make and manage money, how to find meaning. If we have good solutions we get good results. Bad solutions -- bad results. When we get industry results such as late and over-budget projects, or record high rates of suicide and depression, we must seek and adopt better solutions.
In general, we all make the best decisions and apply the best solutions we know - and hope for great results. The solutions we develop are based on a constant stream of choices, some repeated so regularly that they become habitual and even unconscious. Our choices reflect our underlying mental models -- about life, about people, about projects. Our work experience informs that mental model as we adapt to the organizational culture and demands of our work.
Our response to bad results can range from entrenchment and denial ("but I'm doing everything right!"), to frustration and self-doubt ("aargh, what am I doing wrong?!"), to curiosity and determination to learn ("Wow! What am I missing??") We resist change when we don't believe there are viable and promising alternatives to our current solutions.
W. Edwards Deming, a co-developer of Total Quality Management (TQM), said, "No person can perform better than the inherent limits of the system in which they work." He advised us to take a whole-systems view of work-place issues and get everyone involved in figuring out how to improve the system. He thought that individual performance reviews and employee ranking were a waste of time and advocated that rally everyone to focus on organizational and operational performance excellence instead. Creation, he wrote, of a culture focused on excellence in every action should be the singular focus of all project and organization leadership.
Lean Construction relies on a new set of solutions to the problems of traditional construction. Therefore, much of the training we do focuses on techniques and tools, such as the Last Planner System®, the 5S process, or Target Value Delivery. Implementation of these solutions runs into deep resistance in traditional projects because Lean and traditional approaches rely on different mental models how projects and organizations produce results. Lean Construction requires us to make a fundamental change in our thinking and to rework of our underlying mental model.
In 2002, Howell and Koskela set out to understand why traditional Project Management practices so often fail to deliver projects on time and on budget. They searched for any defined theory of project management in the PMI "PMBOK Guide". The result was their classic paper, "The Underlying Theory of Project Management is Obsolete". Among their observations were:
- "...project management as practiced today rests on an implicit and narrow theory"
- "Indeed, it is the poverty of current theory that explains the other problems of project management, such as frequent project failures, [and] lack of commitment toward project management methods. Thus, an explicit theory is the crucial and most important issue for the future of the project management profession."
- "What is needed is a production theory and related tools that fully integrate transformation, flow and value concepts."
- "...the present doctrine of project management... rests on a faulty understanding of the nature of work in projects, and deficient definitions of planning, execution and control"
A clearly articulated "theory" of project management could not be found. What theory they could divine was "implicit", one must look at traditional practices and try to figure what the heck we all have been thinking.
Luckily, 25 years of training and Lean Construction implementation work with some brilliant colleagues have exposed many traditional misconceptions of the AEC industry. Many examples can be identified, I hesitate to call the following list the "Top Ten" Misconceptions, it's close. If we are to succeed with Lean Construction implementation we must challenge and change the following ten mindsets. Below, each traditional misconception listed is coupled with a Lean alternative way of thinking.
Projects are not production Systems
Traditional thinking holds that "production systems" exist in factories and that projects are completely different animals. We think our products and methods are unique because players and designs keep changing, there is no "production line", etc. The effect of this thinking is to keep us focused on discrete, trade-specialized activities. We blame people issues rather than pursue overall production system excellence.
The Lean Thinking alternative starts with the simple observation that any time something is produced (a drawing, a model, a plan, a procurement, a site installation) there must be a production process or system that creates the output. Project-based production systems are conglomerations of numerous production subsystems to which modern operations science and quality management principles absolutely apply. We must adopt whole-systems thinking to understand the integration of each subsystem and any process improvements into the overall project production system. Other industries have been doing business process re-engineering for years and there is much we can learn and apply. We need to look outside our traditional mindset to make significant progress.
Schedules, contracts and budgets control project work
These three documents are the traditional purview of project management as taught and practiced by PMI. If these were sufficient project control mechanisms, our results would be better -- on every level. An implicit assumption is that leadership must direct and constrain the project through top-down, professionally specialized management structures and tools. We further assume that when workers sign a contract, it binds them to work as directed and holds them responsible if they fail. More on this later.
The Lean Thinking alternative makes distinctions between "project controls" as methods that define and measure desired performance, and "production control" -- the processes that manage what is done minute to minute to produce results. TQM teaches us to put the "point of control as close as possible to the point of variance." The Last Planner System® moves control of production into the hands of the producers rather than planners or managers in distant locations. Planning and execution are managed in cross-discipling teams with constant monitoring and adjustment of actions based on immediate feedback and input from those performing the work. The response time needed to make corrections and adjustments is greatly reduced.
Design and Construction are separate phases with separate teams
This misconception fosters a too narrow view of the interdependence between design and construction. Cost overruns generally appear during construction, where blame is laid. But the truth for all product development is that design drives both immediate and lifecycle costs. The traditional mindset is that Designers design and Builders build. We fear that involvement by construction experts up front will add cost and slow the design process. It might also prejudice the bid process.
The Lean Thinking alternative holds that the design process should strive to create the maximum value. A focus on value creation for diverse stakeholders forces us to design more collaboratively right from the start. Design guru Bart Huthwaite has called these various expressions of value "the -ilities". These "ilities" include affordability, utility, procurability, constructability, maintainability, upgradeability, approvability, and more. What started in the auto industry decades ago as "DFMA" (Design for Manufacturing and Assembly) is now called "DF-'X'". (The "X" can represent a long list of "ilities" all of which are important.) Costly rework during construction is avoided when we solve the "ility" challenges before we buy and build. Skillful and efficient stakeholder engagement should start early, during concept development, and continue throughout the project life cycle. Stakeholder engagement starts with definitions of "Conditions of Satisfaction" for all stakeholders, including construction workers, suppliers, etc.
Each Contractor should choose and be responsible for their own "means and methods"
This concept goes back to the roots of skilled artisanship. But the practice of separate contracts and associated performance liability, of separate trailers and independent subcontractor work management systems is much more recent. It is driven by two concerns. First, it recognizes that top management, with its specialized silos in scheduling, procurement, contracting, estimating, budgeting and marketing, are too divorced from actual design and construction work to understand detailed means and methods. Second, if we believe Misconception #2, that contracts and schedules are adequate controls. The system tries to absolve senior management of responsibility for how site production is actually run while maintaining an illusion of being in control.
Lean thinking is based on the principle that production is not simply the result of separate trade activities but is created by the flow of production by a "parade of trades". We must define and measure the throughput and efficiency (reduction of waste) of each production workstream and constantly adjust how any individual trade performance supports throughput. We deploy new integrated contracting methods that reward collaboration and production quality to encourage the smooth flow of work. The right people are doing the right work, in the right amount, at the right place, in the right sequence. It's a team effort to make sure that each trade's means and methods enhance the overall production system. We know that when we optimize the means and methods of each trade subsystem without Lean integration, we sub-optimize the whole system and everyone loses. Production control is more in the hands of the producers.
Lowest bid = lowest final cost
This concept is wrong on so many levels. It is driven by the idea that cost, or price, is the only criterion that matters. It avoids any differentiation of value delivery capacity between bidders, which can vary immensely. It gives the false illusion that cheap is best. Decision-makers can be absolved from their responsibility to choose team members who will deliver the most value for the money. And it encourages all sorts of game-playing to come up with unrealistic low bids. It forces contractors and subs to do whatever they can to protect their tiny profit margins, regardless of the effects on the overall project.
The Lean approach focuses on maximum value delivery within a target cost. Through Integrated Project Delivery (IPD) contracts and collaborative teams, complex tradeoff decisions lead to better results. If we are to make IPD work, we need the best partners who can deliver the best outputs, working together as a team. When stakeholders share risk and reward incentives, gamesmanship is discouraged, as is litigation. Owners typically develop relationships with their top capital project performers that last from project to project to improve work conditions and results for everyone.
More people working faster = earlier completion
How often have we seen this? The schedule is slipping, and the proposed fix is to bring out more people. The result is that work is done out of sequence, work spaces are crowded and less safe, budgets are blown, change orders are flying and creating new overhead costs, nerves and tempers are frazzled. The blame game absorbs energy that should be devoted to fixing a broken system.
The Lean approach is to define, then refine, a Project Execution Strategy before and during early Concept Development and Validation. The product and the production system are designed together. The methods of contracting and operations management are designed to utilize Lean principles and operations science. When everyone is working to optimize operations through project production management tools such as the Last Planner System®, work streams are defined, performance is measured, and performance improvements are implemented in real time. The optimal size of work crews is determined by the optimal flow of work that improves throughput, quality, and safety. Money is saved by right-sized crews and faster throughput of completed work.
Get materials, equipment and crews on site as early as possible
Traditional design and construction are plagued by constant, unanticipated variation. Owner changes, supply system changes, labor availability, weather, prices, all are assumed to be outside our control, and our solution is to buffer the project against all this out-of-control variation with inventory and resource (capacity) buffers. We specialize our management systems so we can blame the Procurement Department if materials are late and we create change management systems rather than getting our supply and production systems in control. We assume thias is just how things are in construction.
Lean teaches us to treat all aspects of the project as interdependent entities, integral parts of a Project Production System. For example, when we investigate and map the production and delivery fabricated systems by our supply chains we often find that suppliers pad their production schedules with time buffers because of our unreliability. We usually find that the value-added time for production and delivery of building components is a fraction of the stated lead times. It is often possible to negotiate just-in-time delivery in small batches when our production process is reliably in control. This saves us cash flow, site clutter, material damage or misuse, and much more. When we fucus on getting our project teams to create reliable work streams we enable all sorts of upstream efficiencies and cost reductions.
More schedule detail = more accurate production control
This idea is based on the illusion that schedules control production and that a scheduling professional is the best person to determine, often long in advance of the start of design or site work, what should be done, when, and by whom. By assigning "means and methods" to each contractor, we avoid responsibility for errors in schedule assumptions. We assume that a college-educated scheduler knows more about production than a field crew with many years of collective experience. Any updates to the schedule are made after changes have occurred, further proving the inadequacy of a schedule to predict and control production.
Lean best practice makes a crucial distinction between scheduling -- putting activities on a calendar -- and production management -- the collaborative coordination and planning of production activity based on the current realities in the design studio or the field. It's not that a Master Schedule that defines high-level phases and flows of work isn't useful, it's that such plans are not adequate to control daily production. They are too divorced from daily reality to make agile adjustments. The Last Planner System® of Production Control is a system that manages and adjusts work on a daily, weakly, and 6-week look-ahead cadence. Real-time adjustments are automatically made to production phase and master schedules. The whole system uses pull planning to create production work streams in response to the push of the schedule. We recognize that until we use production management to get variability under control, the more detailed the schedule, the more detached from reality it is, and the bigger waste of time.
Subcontractors own any people issues on the job
This misconception derives from issues #2 and #4, above -- the idea that the contracts signed by subs bind them to do the promised work and handle all related problems regardless of the constraints and variability imposed by the larger system's inadequacies. Because the contract gives total responsibility for means and methods to the sub, it assumes that all "people" issues will be handled by the subs and absolves senior "leadership" from any responsibility to create a healthy project culture and environment.
The Lean alternative view is that every sizeable project should be treated as a unique, ad hoc, multi-party enterprise. When we think of the project as an enterprise, we realize that is has enterprise-wide systems, a culture and a community. Large project enterprises are complex systems that need leadership with collaboration skills and shared values at every level of the project from crew leader to top management. If we are to change the shameful legacy of being the industry with the highest suicide rate, we must change our leadership model from top-down control to collaborative empowerment. This is why Owners, like several major health care providers in California, have developed communities of providers with proven Lean cultures and skills with whom they contract again and again.
"Leadership" is conferred with an upper management job title
We typically think of projects and AEC companies as hierarchical structures. "Leadership" is a linked to higher level positions with more decision-making authority. By definition and by structure, the higher the decision-making power, the more distant it is from where the work is being done. And construction projects are not led by just one project hierarchy. Everyone in the project also works for some other company creating multiple separate hierarchies. Each of those hierarchies has potentially conflicting goals: serve the client and project or protect their company's profit margins across however many projects they may be managing. If a sub has a project in trouble and their best Superintendent is on your project, who controls whether that person, or a whole top crew, gets pulled from your project? Finally, such a system discourages initiative and empowerment of folks below and encourages staff to compete for higher positions. As Todd Zabelle points out in his new book by the same title, it's a system "Built to Fail"!
The High-Performance Leadership approach that I have explained in my 10-post contribution to the Lean Construction Blog can be manifest any time a person at any level in a project organization takes a risk and stands up for a better way to do things. Leadership in the collaborative project environment requires skill and positive intention, regardless of title. Five critical collaborative leadership skills are meeting facilitation, interpersonal communication, stakeholder engagement, win/win decision-making, and collaborative problem-solving. (See https://leanconstructionblog.com/victor-ortiz.html)
In conclusion, when we begin to see the world through "Lean Lenses" everything looks different because our perspective is different. We are informed by new set of principles and a new appreciation of how whole, complex systems work. We develop a new and better underlying mental model based on operations science, proven best practices, and respect for people. To get better results we must make better choices -- based on a clear understanding of what makes project-based production work for everyone.
