2 Assignments - PAPER – Construction Business – Lean Construction– CONSTRUCTION PROJECT MANAGEMENT

Creating a lean culture

Keiser (2012) cited several practitioners who experienced lower costs, shorter schedules, improved safety, and better quality (Lichtig 2010; Izquierdo 2010; Angelo 2010). These practitioners closely linked the benefits with the degree of adoption of a lean culture in their organizations. The creation of a lean culture involves having stakeholders embrace the principles of respect for people and continuous improvement. Additional steps are needed to inculcate these values in the hearts and minds of people who held opposing, and long established, beliefs and attitudes.

Lichtig (2010) points to the need for a lean transformation to make a lean journey successful, and links it to the element of effective leadership. Project characteristics vary widely, as do the project teams. That creates a challenge for those who provide or support the lean function. Some companies have detoured from lean because of an inability to create a company-wide transformation (Keiser 2012).

Leaders must visibly lead the change – senior managers (in the project delivery team) must decide to commit to lean, and declare this to employees. This declaration must be followed with a steady effort to align the organization with a lean culture. The lean transformation must be organization- wide, and continuous, not sporadic. The organization must provide resources – training, facilitation, and equipment such as meeting facilities and computer systems. Initially, a consultant may be needed to fill this role, whether external or internal).

Training should be just-in-time – when people start to work on their projects they should already have had the necessary lean training, but not too long before. As observed in a UK study three key issues influence the readiness of organizations for undertaking a lean journey: lack of adequate lean awareness and training; lack of top management commitment; and culture and human attitudinal issues (Sarhan and Fox 2012).

Lean methods require new behaviors. One cannot effectively enforce change, but skillful management can lead people to derive intrinsic satisfaction from outstanding performance. A “Shared vision” places all stakeholders on the same page (Macomber and Howell 2005). The work force aligns itself with the direction set by a leader, based on a sharing of beliefs and a positive view of the future. A Study Action Team™ (SAT) is recommended to develop the shared vision. Members may start as a reading group and focus on learning as much as possible to bring about change.

An Integrated Form of Agreement (IFOA), such as used by Sutter Health on their projects, or ConsensusDocs300 or its equivalent should be provide a legally enforceable relational contract that incentivizes collaborative behavior between project team members. Standard commercial contracts are adversarial in nature, emphasizing penalties for underperformance. The IFOA seeks to align the commercial relationships of a construction project’s design and construction participants as a temporary production system. Disputes are settled at the lowest possible level. It requires collaboration to bind team members as a network of commitments. It formally requires lean project activities including training, joint planning, performance measurement such as percent planned complete (PPC) and continuous learning. Completed assignments serve as a source of learning for future improvements instead of being a search for sources of blame.

Developing a successful relational contracting culture

The people who are a part of the project team need to fit in the concept of lean construction; they require special attention. Management can best enable this by:

• Employing people who are receptive to a new way of doing things. A belief in relational contracting is essential.

• Providing training and development companywide to all staff. Training industry wide would help to increase the pool of people who understand and accept the RC culture.

• A commitment by all involved companies to send their staff to workshops on relational contracting. Alignment of team objectives: Common vision/goals and an understanding of each individual’s responsibilities and values are identified as two of the most important aspects of relational contracting. The criteria for selecting partners in RC approaches must reflect the client’s business objectives and comprise both “hard” and “soft” qualities.

• Team members, along with the partners thus selected, should agree on their mutual objectives, and devise common performance appraisal plans.

• Team members should commit not to do anything that is contrary to the spirit of the relational contract. They should not impede the work of others (for example, by doing work out of sequence).

• Team members should not accept an assignment that cannot be performed correctly or safely. They should not leave the job until they know what they are planning to do the next day.

• Relational contracts should communicate management’s commitment to optimizing performance at the level of the project and not push for local optimization of resources.

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