Our clients in the construction business tell me that the industry enjoys flush times, once again. The leaders of these firms say that they marked 2016 as the year in which they felt that they could put the dark days of the 2007-08 recession behind them, once and for all. Many construction firms are family led. Employees become extended family. Memories of business lost and layoffs chill them to this day.
Growth, however, brings its own challenges. Leaders of the firms ask…
How might we engage and tap into the collective intelligence of our employees such that engagement, along with the outcomes from their contributions, increases the likelihood they remain with the firm? Employee retention in the skilled trades is a challenge, especially with those employees who have experience working on big, complex projects.
How might we capture and re-apply the knowledge that our veteran staff has developed over the years? A goodly number of people holding high-skill, supervisory roles are drawing closer to retirement. Many of the seasoned employees who work on the job site operate as lone wolves, making it doubly hard for the organization to benefit from their years of experience.
How might we continue to differentiate ourselves from the guy down the street? Flush times do not mean relief from competition. Quite the contrary. Whereas the recession culled the weaker players, renewed growth has brought new entrants in the space.
The practice of leveraging the collective intelligence of employees to spark new solutions and driving innovation through collaboration can serve as a means of addressing these challenges. However, many of the firms struggle to apply the practice within the context of their day-to-day work. Field staff, for example, view overarching corporate challenges as peripheral to their work, which involves long hours in challenging environments to keep commitments.
They ask—and rightfully so: What’s in it for me? How does tapping into the collective intelligence of employees help me?
Connecting Lean Construction with Collective Intelligence
To be effective as a leader in a large distributed organization, you must have a sense of what it means to go with the flow. Practically, can you help your people accomplish the job in front of them, as opposed to giving them new jobs to do?
It’s in this spirit that several savvy leaders have made the connection between lean construction, which their firms have already embraced, and the practice of leveraging the intelligence and experience of every employee. How might the latter support the former? I identify the linkages below.
Linkage One: Cementing the Customer Relationship
The best deal in construction is the one that never hits the street: the new business opportunity that the client does not shop to the world as an RFP. Every construction firm, primes and subs, values the captured client as a source of repeat business.
At the same time, advocates for lean construction observe that the industry has a bad reputation of not making its commitments, in part because breakdowns between the client, the prime, the sub, and the source of materials, and/or finished goods. Firms get in their own way of gaining repeat business.
The collective intelligence of crowds – employees, customers, suppliers, etc. – offers a way forward. Imagine, for example, an innovation community consisting of the client’s program team, the primary contractor, the key subs, and even the critical suppliers (e.g., sources of long lead items for the job(s)).
The prime, as orchestrator with the client, pose a series of innovation challenges, perhaps as an outcome of a pull planning session (the “should.”).
Questions might come in the form of, “How might we increase the likelihood that we keep our commitment tied to [milestone X]?” They might come in the form of, “How might we gain greater clarity around hand-offs?”
Lean construction is by design set up to be collaborative and inclusive to get at the truth of scheduling and resourcing, as opposed to mandating commitments and then hoping the parties deliver. This sort of approach to challenges reinforce the inclusive intent. The questions reinforce the later stages of “can,” “will,” and “did.”
The payoff: increase client retention and the promise of no-bid work when they client becomes used to—addicted to—working with their contractors in this fashion. Lean construction, when paired with the Digital Age practice of tapping into the collective intelligence of crowds, holds great promise as a source of competitive differentiation for firms looking to transform their businesses for the future.
Linkage Two: Cementing Internal Planning and Coordination
Resourcing and coordinating projects within the primes is a complex endeavor. Can we do the “can” tied to the latest pull planning activity? How might we eliminate the roadblocks we have identified in the constraint log?
The primes do not always want to expose the sausage making to their clients, subs, and suppliers. Using the collective intelligence of employees offers a way forward for the project teams. Embracing lean construction bolsters collaboration in kind, as the project-based focus aligns with how work is done in the firm, increasing the likelihood that employees participate in the discovery process tied to the innovation practice.
The nice-to-haves begin to look like must-haves.
The key, here: focus on converting as many “can’s” to “will’s” as possible, for the given project.
Linkage Three: Process Improvement
Top-line growth becomes easier in flush times. Margin attainment, however, is always at risk. Indeed, growth can place exquisite pressure on margins as accounts receivables lag accounts payables during ramp-ups. Cash management becomes a fine art.
In this environment, any opportunity to reduce costs in the form of wastes that get between the firm and the client are more than welcome.
Here, the lean practitioners at the prime can run value stream mapping exercises with an eye towards critical processes around designing, building, and managing. The critical value streams to a prime might tie to how the organization manages new business development, supplier relationships, and estimations, for example. Every hand-off offers an opportunity to remove waste.
The resulting kaizens tie to discrete innovation challenges. The following blog post outlines how this approach works.
The construction industry does not need to make the case for innovation. The business is changing rapidly, across the board. Simply keeping up with the innovation that is already happening, today, is the order of the day, in these flusher times.
The construction industry does not need to make the case for lean practices, either. The large number of missed commitments and cost overruns—the pain born by the clients—makes the lean practice an easy sell within the industry.
The question—the challenge—becomes how does the organization bring the practices up to the Digital Age for effective engagement with the people doing the work and, thus, gaining the essential knowledge. That’s the key, today.