In the first post of this series I argued that when stakeholders do not agree on the problem, they probably will not agree on the solution. The “problem” for which advances in Lean Construction are “solutions”, is the failure of the Architecture, Engineering and Construction (AEC) Industry to realize similar productivity gains achieved by other industries. Three root causes of this problem were suggested: a “Knowing” vs a “Learning Culture”, Lack of Strategic Leadership, and Inertia. In this second post suggestions to address the three root causes are offered.
What should be done to address these root causes?
The good news is that there is no shortage of resources including books on Lean Transformation and Lean Leadership (see references, Post 1 of this series), local and national LCI chapters and other professional and research associations (PPI, P2SL, CIFE, etc.) and coaching, consulting, and training resources. What is needed is committed Lean leadership, evidenced by “walking the talk” through dedication of time, attention and resources to a Lean Enterprise Strategy. Lean must be “the way”, not a bolt-on to an existing strategy.
Develop “Profound Knowledge”
W. Edwards Deming, a father of the modern quality movement that has spawned Lean, Agile, Six-Sigma, and more, was an early advocate of “Enlightened Leadership”. He proposed a “System of Profound Knowledge”  with four elements that address all three of the root causes listed above. I offer the following short explanations of each of the four system elements from a Lean Construction perspective.
1. Appreciation for a System
Deming attacks the problem of “process blindness” by noting that work of every sort gets done through processes - a linked series of steps. These processes, along with various tools and techniques, form a Production System. Traditional construction strives to break projects down into discipline-specific bits, controlled by contracts and project controls such as budgets, schedules, and retrospective reporting. Lean/IPD embraces a “whole systems” approach to the project from project definition to abandonment/alteration . Traditional Design-Bid-Build project contracts and controls tend to impede understanding how all the parts of the project production system need to work together to create customer value. Owners must provide the main leadership initiative by establishing strategic preferred-provider networks that engage their supplier’s leadership over time and across projects to develop a replicable and continuously improving project delivery system.
Deming  correctly states that no person can perform better than the capabilities and constraints of the work system in which they operate allow. Therefore, if there is a lack of productivity improvement in the AEC Industry or underperformance in any particular project, the first issue to explore is whether the system in which people are currently operating is adequate to support success. In 95%+ of all failures, system inadequacies are wholly or mainly at fault, not individual team members who generally try to do their best. Responsibility for the effectiveness of the production system belongs to Management.
Deming explains: “the greater the interdependence between components (of a system), the greater will be the need for communication and cooperation between them. Also, the greater will be the need for overall management.” Our traditional systems of individual contracts and functional specialization obscure our ability to see and understand all the interdependencies in a typical project. Lean Construction and IPD require rigorous collaborative leadership through the project life cycle, and adoption of a “whole systems” perspective.
2. Knowledge About Variation
There is always variation in any system. Deming advises us to understand and distinguish between “common” and “uncommon” causes of variation. Don’t worry too much about common (acceptable) causes of variation, and don’t ignore uncommon sources of variation. The distinction between the common and uncommon variation causes requires that we understand a project as a set of production sub-systems that can be described and measured. Traditional AEC practices, with their focus on individual trade activity optimization, do not support system definition and variance analysis. Variation and uncertainty plague us.
Lean construction contradicts the traditional assumption that quality, cost and schedule must always counterbalance each other so that an improvement in one area must always cause degradation in another. Lean has shown that a reduction in variation drives improved reliability and improves flow (therefore reduces waste), which simultaneously improves quality, cost and schedule performance. The reduction and strategic management of variation through an Operations Management (OM) approach and the application of Lean tools and metrics is essential to improvement of system performance. This requires a profound change in thinking for most of us in the AEC Industry.
3. Theory of Knowledge
You might think that leaders simply need “knowledge”. What is this “Theory of Knowledge” business?
Deming observes knowledge is always based on some sort of theory, and that when facts contradict traditional knowledge, a new theory must emerge to explain what has been learned. Management requires prediction, based on our personal theory of how things work that we develop from our experience-based knowledge. To lead positive change and disrupt the old order requires new thinking. While Deming was the primary exponent of Statistical Process Control (SPC) and famously said that you cannot manage what you cannot measure, he was not a fan of data for data’s sake. Both Deming  and Russell Ackoff  make the point that data is not the same thing as knowledge. Knowledge is not the same as Understanding, and Understanding is not the same thing as Wisdom. Without theory, there is no derived meaning to experience and hence, no ability to learn. Deming requires us to think about how we think.
In 2002, PMI (The Project Management Institute) published a paper by Howell and Koskela entitled, “The Underlying Theory of Project Management is Obsolete” . They state that one main distinction between a craft and a profession is the existence of a body of theory that guides and informs professions. Howell and Koskela further state that “mastery of theory, along with mastery of practical skills of the field, is a hallmark of professionals”. In fact, an analysis of over forty years of research on Project Management has revealed no coherent and explicit underlying Theory of Project Management. This goes a long way toward explaining why even though something on the order of 80% of capital projects end up over budget or schedule, or both, we continue to rely solely on traditional project management methods.
Lean Construction is derived from many roots. A key one is Total Quality Management (TQM) with a solid base in operations management theory and process improvement practices. If we are to transform the AEC Industry, our Theory of Knowledge must help us to learn. Deming says, “the procedure will depend on the purpose.” Determination of our sense of purpose is based on our theory about what we are trying to do. Therefore, our Theory of Knowledge must lead us to a Knowledge of Theory. Some study of OM Theory  is required - and that “study” can come in many forms such as reading, but also workshops, videos, simulations, and deep discussion and questioning.
Deming says, “a leader of transformation, and managers involved, need to learn the psychology of individuals, the psychology of a group, the psychology of society, and the psychology of change.”
As a Psychologist, I have spent my career working to understand how both the theory and the practical application of these realms of psychology apply to productivity improvement in a broad range of enterprises. I know this: people are both unique and complex. When you combine unique and complex people into a project team there will be unique and complex dynamics. But again, both theory and a practical knowledge of proven Collaborative Leadership techniques and processes can be applied to foster strong, effective and efficient project teams that deliver superior value. However without investment combined with an intrinsically motivated and committed leadership “value” cannot be realized. Leaders need to walk the talk i.e. Lean Leadership. People must want to follow, not be told to follow.
For a great compilation of relevant psychological theory, read “Lean Leadership”, by William Lareau. 
ConclusionIt is the nature of the human brain to rely first on what is familiar and habitual. Change in general, and especially in the world’s largest industrial sector, AEC, takes motivation and hard work. And it never stops.
If we don’t agree on the problem, we won’t agree on the solution. When the problem is that our theory is obsolete, and our practices inadequate, the change required is profound and multidimensional. There is no short-term fix, no magic pill, no “Lean Lite” that will suffice. But there is a huge wealth of information we can apply because almost every industrial sector other than AEC has been at this transformation for years, with stunning results. There is no reason that we cannot do the same, and more.
 Deming, W.E., 1994. The New Economics, MIT Press, Cambridge, MA, Second Edition
 Ballard, G. 2008. The Lean Project Delivery System: An Update. Lean Construction Journal 2008: pp. 1-19. http://www.leanconstruction.org/media/docs/lcj/2008/LCJ_08_001.pdf
 Ackoff, R. 1991. Ackoff’s Fables, Irreverent Reflections on Business and Bureaucracy, Wiley, NY
 Howell, G., & Koskela, L. 2002. The Theory of Project Management is Obsolete, LCI Website, Research Resources
 Shenoy, R., & Zabelle, T., 2016. New Era of Project Deliver - Project as Production System, Journal of Project Production Management, Volume 1, PPI, San Francisco
 Lareau, W., 2000. Lean Leadership, Midland Press, Davenport, IA