Ventura County Medical Center Hospital Replacement Wing
February 2020 - LEAN IN DESIGN-BUILD SERIES
Establishing a Lean Culture in an Organization, the Southland Industries Story
By Jessica Kelley and Joe Cvetas
The steps to establishing a Lean Culture are no different than establishing any other cultural aspect within your company. What is it? Why are we doing it? And where do we want to go with it? Organizational culture is often created in one of three ways, deliberately, organically, or a hybrid of the two. For Southland Industries, a leading Design Build building lifecycle solutions company (which includes engineering, fabrication, construction, service, building automation, operations & maintenance, and energy services), developing a lean culture was deliberate in intent and organic in the evolution.
As a founding member of the Lean Construction Institute(LCI), Southland saw the benefit in delivering projects differently to provide more value to our customers by delivering projects faster, at a lower cost, and with higher value. We were able to build on our existing culture of innovation and quality, where we created a work environment that empowered our people to be innovative problem solvers. Southland is no stranger to progressive delivery models, whether it is being a leader in Design Build or Integrated Lean Project Delivery, it takes strength of conviction and deliberate commitment by company leadership to create a culture that is unique from the greater industry to sustain through market challenges, organizational growth, or limited customer pull.
Though some cultural concepts can be black and white, a Lean Culture is a spectrum that incorporates continuous learning and capitalizing on opportunities enabled by the business environment. In 1998 “Lean Construction” was primarily based on Greg Howell and Glenn Ballard’s research around workflow and production planning, what became the Last Planner® System (LPS). So that is where Southland started, implementing 3-week lookaheads, Weekly Work Plans and reflection through Planned Percent Complete (PPC) and Variance tracking. We did this independently on projects and attempted to show other Trades and General Contractors the benefits of detailed short-range planning and reflection to improve the greater project planning effort. Enlisting our foremen was directly aligned with our culture of empowering the front line to own the planning and execution of their work, which is also a necessity of the Design Build delivery method which has an overlap of the design and construct phases of a project and often prohibits full project scheduling at the beginning of the construction phase. We then transferred this empowerment of our front line to make improvements in their work. Before the “fix what bugs you” tagline attributed to Paul Akers for making 2 Second improvements we had the “SI Way” or “Simply Innovate” campaign to encourage our employees to own their work and make improvements, large or small, because those that do the work are often best equipped to improve the work.
This helped them see that we trusted them to take action and knew that the often-considered little things add up to great improvements. This took away the perceived shackles and opened the flood gates for innovative improvements throughout the business, from the shop and field to design and operations.
In cultural transformation and Lean, the iterative process of the Plan – Do – Check – Adjust (PDCA) cycle is necessary for improvement. The construction industry, unlike manufacturing, is an integrated system that depends highly on the various partners on a project. Applying LPS can only take you so far. To take the next step (adjustment), we leveraged the community the Lean Construction Institute helped create to connect with other like-minded companies that were on their Lean journey as well. People who recognized the dysfunction in our industry and made the commitment to themselves, us, and the greater industry to improve it. We teamed up with Sutter Health, DPR, Boldt, and HGA to see what could be accomplished if we worked together as one to advance Lean on our projects beyond what we were able to do individually. Building off our empowered culture of innovation and improvement, our teams were then able to say “what if” to the full project team with the goal of eliminating waste and frustration in the current delivery models. Leveraging Integrated Lean Project Delivery (ILPD) made it easier for all team members to shift behaviors from the old to the new way of behaving, breaking down dysfunction that purely existed due to the shifting of risk that traditional contracts are based upon. Already having a Design Build culture made it even easier to work in these new ways because we had foremen accustomed to providing early feedback to design for improved constructability, project managers with engineering and estimating skill sets, and engineers that could speak to the various design solutions (flexibility, maintainability, cost). As with any highly collaborative environment, the communication methods and skills needed to be effective are different than what was typically used in more hierarchical, command-and-control contract structures as well as what has been used traditionally in the construction industry. As we recognized these differences, we adjusted how we developed our employees, to make working in the Big Room, more impactful.
As our journey progressed, so did our assessment of our Lean journey. More people started learning about Lean principles, looking beyond the construction industry for fundamentals, applications, and case studies. We realized that though we were making progress on our projects and sharing our learnings with the greater industry, we still had opportunities to apply greater Lean thinking to our own organization’s operations and to our projects that traditional delivery models limited or outright prevented. Concepts such as Set-Based Design, A3 Thinking and Choosing By Advantages Decision-making helped our teams create better decisions related to design and pre-fabrication opportunities for the owner and the whole team with less wasted effort. We began using A3 reports in our Safety department to rapidly share learning on incidents with the intent to prevent the same or similar incident on other projects or in other regions.
The more we learn, the more places we find we can apply Lean thinking both internally and at a project level. The more people learn, the deeper the understanding of Lean becomes, from empowerment of our people, to continuous improvement, understanding customer value, learning new ways to increase the visibility of waste, and engaging stakeholders to make change stick becomes a relentless pursuit on our Lean Journey.
Jessica Kelley, PE, Operational Excellence Manager, Southland Industries
Jessica started her career with Southland Industries designing and managing design-build-maintain projects. From there she had the opportunity to support and manage Southland’s Enterprise Resource Platform selection and implementation initiative. She then moved on to building the Learning and Development Department and now is focused on Operational Excellence in a full-time capacity. Jessica has been actively involved in the Lean construction community from the start of her career, driving efficiency and focused improvements internally at Southland, on projects, and in the industry as a whole.
Joe Cvetas, Executive Vice President of Corporate Development and Planning, Southland Industries
Mr. Cvetas helps set overall growth strategies and goals for Southland leading the company’s mergers and acquisitions approach. He is also responsible for identifying opportunities for entry into new markets and products, the formation of strategic partnerships, and the acquisition of other companies. With over 30 years in the MEP industry, Mr. Cvetas has considerable experience optimizing building systems for a variety of markets and industries. He is also responsible for providing business leadership and oversight for Southland Energy, a division of Southland, and Envise, a wholly owned subsidiary of Southland.
January 2020, LEAN IN DESIGN-BUILD SERIES
One of Lean Construction Institute’s 8 Wastes: Under-utilization of Talent
Diane Anglin, Project Communications Executive
Clark Construction Group
2018 Past President, DBIA Western Pacific Region
The total value of a team’s strength is the sum of its applied knowledge, expertise and creativity. The key word is applied. Tapping into that full capacity of the team is one of the great challenges of the management of teams. Principles of Lean in design and construction identify the under-utilization of talent as one of the eight main areas of common wastes. "It is the biggest waste of all, the one that can hurt the most, and often gets thrown to the side and completely ignored.” suggests Bigelow, in the ISixSigma community blog.(1)
With integrated forms of delivery, we put in place organizational structures to aid in the collaboration of our teams and begin to tap into the team’s talents. Structures such as partnering, teaming agreements, and co-location have been used successfully for many years, yet fully utilizing talent continues to be an opportunity to reduce waste. Where are we missing the mark? How could we discover what talents are going untapped?
Melding of Cultures
One of the more compelling strategies that I’ve come across for combatting this area of waste is addressing the melded culture that exists when team members come together. A potential root cause for waste is not so much found in the structures that are in place but the different culture that each team member brings to the team.
In project-based teams, when members are brought together, each brings with them existing cultural norms and established mental models that have taken root over the course of their very specific experience. As positive as they may be, there will be tensions between existing personal cultures/behaviors and attempts at setting new ones for the team, and can lead to waste in the time it takes for team members to be fully effective organizational members. The Lean Construction Institute (LCI)’s onboarding process goes a long way in addressing this area of waste at the earliest moments of a project. (2)The onboarding process reinforces how intentional steps must be taken to assist team members with adapting and sometimes even unlearning their own cultures in order to accept a new team culture. LCI’s knowledge paper on onboarding offers “onboarding, also known as organizational socialization, is a way for new employees to quickly acquire the necessary knowledge, skills, and behaviors to become effective organizational members.”
I asked Lean Coach Terri Erickson with Kata Consulting to comment on the importance of onboarding. “By providing a deliberate onboarding experience for all team members, they are given an opportunity to participate in forming the “rules of the game” for the structure of the project. This helps them develop a deeper understanding of these rules and may help them avoid inadvertently doing something that may not be in alignment, or worse losing face or digging in heels.
This process of onboarding demonstrates a Lean value of deep respect for the individuals participating on the team by allowing them a safe environment to re-calibrate to a new way of working which may be different than the ways they have worked in the past.
One way, as a Lean Coach, that I have improved this onboarding experience is to meet with each trade partner individually ahead of time to provide basic Lean training and discuss the first team meeting, prepare them for it, and answer any questions they may have. By taking this extra step in the beginning they are equipped with the confidence to “hit the ground running” as a participant in the collaborative team forming process.”
Authoritarian project management models can motivate leaders to have a good plan – first and foremost and lead by providing clear direction and control. Subscribing to this, unwittingly the manager may be contributing to the under-utilization of talent in their team. This can set up a mental model that in order to be worth his/her salt, they need to show up with a fully cooked plan. This process in effect, shuts out team input, and reinforces a lack of recognition for the talent of the broader team. An action as simple as problem solving alone in a vacuum, can establish a culture of individualism versus collaboration with the pool of talent and expertise of the team going untapped and underutilized. With supervisors handling the problem solving, many employees don’t believe they are expected to be creative. This perpetuates a “knowing culture”, versus a establishing a “learning culture”. Learning cultures acknowledge that team members are a vital part of the equation for developing any plan. It should never be cooked alone.
A Manager’s Influence
The culture that is set by the manager matters. The influence that the manager(s) has on the engagement of team members may be even larger than typically thought. Gallup’s largest global study of the future of work found that “one of Gallup’s biggest discoveries is: The manager or team leader alone accounts for 70% of the variance in team engagement.” So much so, that Gallup titled the book on this study as “It’s the Manager” and states, “the need for disruption in how employees are managed couldn’t be more urgent” and offers instruction for managers to transition from “boss” to “coach”. (3)When managers spend more time coaching and guiding it can make a profound difference on the engagement and contributions of team members.
For engaging team members on collaborative projects, what is required is a different kind of project manager asserts Bill Seed, SVP Jackson Health System, whose white paper outlined a new skillset needed for successfully managing integrated projects. “The Integrated Project Manager must encourage the collaborative solicitation of need, input and output from all members. They must build trust and respect amongst team members. They must drive constructive conflict so that all ideas/concepts are presented, discussed, openly considered and either implemented or discarded.” (4) In this way the leaders pull in certain team members appropriately to tackle problems specifically in the areas where their feedback can lead to solutions and improvements. Lean approaches such as cluster groups can provide the structure to help add multi-discipline interaction into the project’s cadence.
Avoid Group Think
How does the size, and makeup of the team influence its collective abilities? If all team members look and act the same and come from similar backgrounds and roles, their expectations may be limited on the amount of impact they think they could have on the team. A group phenomenon termed “Group Think” (5)can take hold of the team’s decision-making abilities unless leaders actively seek to counteract it. Group Think has been attributed to inadequate risk evaluations, lack of creativity and lack of contributions by individual team members. Suppression of individual opinions and creative thought can lead to poor decision-making and inefficient problem-solving. In a group environment that lacks diversity, illusions of unanimity can lead members to believe that everyone is in agreement and feels the same way, and therefore they limit their input. (6) Diversity is an element of team formation that can make a real difference in the utilization of talent of the team.
Archive: November, 2019, LEAN IN DESIGN-BUILD SERIES
Lean in Design-Build – The Untapped Potential
By David Umstot, PE, Umstot Project and Facilities Solutions, LLC
2015 Past President, DBIA Western Pacific Region
This is the first in a series of blogs on Lean-related topics that the DBIA Western Pacific Region has developed to help our membership understand what Lean is and how we can leverage Lean in the integrated nature of design-build projects to deliver even better projects. You may already have an understanding of Lean, or you may not even have heard of Lean. Our goal in these series of blogs is to help educate our DBIA members to develop a fundamental understanding of Lean as it applies to design and construction and to challenge our members to look for ways to create value through more effective collaboration, elimination of waste, and continuous improvement. Let’s start our Lean journey with a short assessment of where we are as an industry.
The Construction Industry - Current State
Our industry is confronted by challenging times. The quadrennial American Society of Civil Engineers 2017 Report Card on American Infrastructure gives the nation’s infrastructure an overall grade of D+. The report card estimates $4.59 trillion will be necessary to invest in our infrastructure by 2025 to meet our needs. To complicate matters, there is an expected funding gap of more than $2 trillion. It is unrealistic that our nation will be in a position to create an additional $2 trillion in funding over the course of the next few years to address these needs. So that begs the question “Is more funding the answer, or is the solution using the available funding in a manner that yields greater value?”
McKinsey published a study in 2017 titled Reinventing Construction: A Route to Higher Productivity. McKinsey shares that while construction-related spending accounts for 13 percent of the world’s Gross Domestic Product, there is a $1.6 trillion annual gap of additional value that could be realized if the construction industry were to simply match the productivity growth rates of the manufacturing and service sectors (Figure 1).
Figure 1. The Productivity Opportunity in Construction (Source: McKinsey - 2017)
To compound matters we have an aging workforce and shrinking craft labor pool. We cannot expect to meet the world’s infrastructure and building needs with past practices. We need to take a fresh look at how to better deliver our design and construction of projects. Which takes us to Lean and a Lean mindset.
Lean – What is It?
The origin of Lean is in the manufacturing sector and specifically the Toyota Production System. While we do not design and assemble cars, Lean is directly applicable to design-build. Let’s look at some of the fundamentals and how they relate to design and construction.
Firstly, the foundation of Lean is built on respect for people. People design and build buildings. How do we leverage the centuries of cumulative experience on projects to the benefit of the project and to add the most value?
Value is central to everything in Lean. Identifying the value stream is key. Specifically, we need to start with understanding what the customer values. What is important to the customer? What are they willing to pay for it? Things the customer does not value and is unwilling to pay for constitute waste. Our industry is laden with waste and there is ample opportunity to do better and create more value for our customers and in turn their internal customers on a project. Learning to see waste is the first step.
Once the value proposition is understood, Lean allows us to apply systems to enhance the flow of production. This could be flow of information and progression of a design package, flow of material and labor in a pre-fabrication environment, or production on-site with trade contractor material, equipment, and labor. The greater the reliability and predictably of flow, the better the production rate. We will learn in future blogs more about the Last Planner® System and how it can be used for production planning to effectively identify and manage handoffs between the more than a dozen design disciplines and multitude of trade contractors on a project to better enhance flow of work. While we are very good at our own disciplines and areas of expertise, we collectively do a poor job of integrating across these disciplines. This is where much of the waste occurs in design and construction.
Let’s discuss one of the biggest impediments to value generation in our industry - waste. Waste is defined by dictionary.com as “an act or instance of using or expending something carelessly, extravagantly, or to no purpose.” There are 8 wastes in any production system. Let's look at each of these in the context of our project delivery process with examples:
Doubtless you have experienced and witnessed examples of waste on your projects regularly and most probably on a daily basis.
The Business Case for Lean – The Owners’ Perspective
In 2016, Dodge Data and Analytics conducted a study of 81 owners in the United States with large construction portfolios asking them to share the characteristics of the best project they had ever delivered as an owner and those of their typical projects. The results of the study showed that projects using Lean practices with high intensity were 3 TIMESas likely to finish ahead schedule and 2 TIMESas likely to finish under budget. How do we make that performance level consistent? We can achieve this by integrating the Lean practices shown to have the greatest impact based on the greatest degree of difference between best and typical projects shown in the chart below (Figure 2).
Figure 2. Lean Practices Used with Greater Frequency on Best Performing Projects
(Source: Lean Construction Institute - 2016)
Future blog posts will address each of these Lean practices in more detail.
In 2017, a joint working group was developed with members from DBIA and the Lean Construction Institute to explore how best to develop awareness and greater Lean adoption as part of design-build project delivery. As part of this effort, a cross-map was developed between the DBIA Design-Build Done Right: Best Design-Build Practicespublished by DBIA in 2014 and Lean practices. It is available at this link.
Progressive Design-Build and Lean
As the Design-Build community moves towards greater use of progressive design-build, the opportunities to integrate Lean into the way we design and deliver projects are significant. Design-build delivery is projected to represent 44% of the non-residential construction market by 2021 based on a study by FMIpublished in June 2018 (Figure 3). With this market share, the potential to reach a tipping point in the way we deliver our projects using Lean is within our grasp.
Figure 3. Percentage of Non-Residential Construction Delivered by Design-Build (Source: FMI-2018)
Now that you have some knowledge, what are you going to do about it?
“The man who moves a mountain begins by carrying away small stones.”- Confucius