Getting started, I could claim that writing my first blog was interrupted in part by work, life and dogs, clearing the snow, splitting firewood, those sorts of distractions.  In reality, time passed as I tried to find a place to stand, a voice for what I wanted to say. My longer-range plan begins here with a reflection on the conceptual foundations, the theories drawn from different domains for why Lean Construction works as it does. And I will respond to questions, additions and corrections you might have, or suggestions for other topics.

So my objective here is to explore those conceptual foundations of Lean Construction (LC). The quickest definition of LC that I know is “A new way to see, understand and act in the world.” This is true but unfortunately useless in practice because it only hints at the deeper paradigm shift that LC brings to the industry. Thus, exploring the foundations of LC requires both organization and definitions.

Projects managed by Traditional Practice (TP) and LC have different approaches across these three “domains”:  “Commercial Terms” that contractually bind the parties and establish payment terms and penalties; “Organizations,” the authority and communication protocols; and an “Operating System,” the way the work itself is managed. And each approach has a strategy for project success. The strategy of TP has become “Optimize the project by optimizing each piece.” It rests on a Critical Path Method (CPM) activity–based Operating System[1], supported by lump-sum contracts, and command-and-control organizations. Project funding, bonding, insurance, industry associations, and construction education are aligned with this coherent approach. This has, over time, become standard practice in the industry.

By contrast, the strategy of LC is “Optimize the project, not the piece.” This is accomplished by shifting from an activity-centered to a flow-based operating system, collaborative organizations, and relational contracts. LC has proven effective on relatively simple, slow and certain projects (e.g., building simple masonry homes) as well as on complex, uncertain and quick projects (e.g., hospitals[2], refineries, and silicon manufacturing plants) where uncertainty is high regarding both what is to be built and how. To be fair, both the Partnering movement—an organizational approach—and Design-Build Contracting aim to optimize at the project level, but their impact has been limited by the CPM activity-based operating system employed.

Conceptual Foundations of Lean Construction

Each domain of LC is supported by conceptual foundations, explanations for how things work, and related tools. Many of these foundations have implications in more than one domain. What appears below is surely a partial list and includes open questions.

1)      Operating System:

a)      Queuing Theory: The combined impact of dependence and variation on system performance. (Read “The Goal” by Eliyahu Goldratt for a non-technical explanation.)

b)      Coordinating action and creating value: The Language Action Perspective, as developed by Fernando Flores and others. This is relevant to both Commercial Terms and Organizational issues. (The book Conversations For Action and Collected Essays: Instilling a Culture of Commitment in Working Relationships by Fernando Flores and Maria Flores Leteleir.)

c)      Production management principles and practices adapted from manufacturing. (“Factory Physics” by Hopp & Spearman. “Production & Operations Management” by Schmenner)

d)      Safety and organizational resilience (10 Questions about Human Error, A Field Guide to Understanding Human Error, and Drift, books by Sidney Dekker. See online video “Why things go wrong”)

e)      We know that projects delivered under LC protocols are safer, but we don’t know why. People have reasonable explanations, but their “theories” have not been tested. An initiative to understand why projects are safer (and may have fewer commercial claims) should be a top research priority for the Lean Construction Institute and academics.

2)      Commercial Terms

a)      Reducing Transaction Costs. Oliver Williamson’s paper “Transaction-cost economics: The governance of contractual relations,” Oliver E Williams, Journal of Economic Issues (pre-1986).

b)      Relational contracting. Ian Macneil’s book The Many Futures of Contract, Gould School of Law, the Law Center University of Southern California, 1974; 126 pages. Compares on relational contracts, where many futures are acceptable as opposed to transactional contracts, where a single outcome is expected.

c)      Equity and fairness: A Cooperative Species: Human Reciprocity and Its Evolution (Sam Bowles; Samuel Bowles, Herbert Gintis, Princeton University Press, May 1, 2011) established that humans have an innate sense of equity and fairness that is more powerful than economic motivation. Bowles’ extensive list of papers includes “Is altruism bad for cooperation?” in the Journal of Economic Behavior and Organization; and “Strong reciprocity and team production,” available from the Santa Fe Institute. Bowles’ work also provides insight into the Operating System and Safety. Another provocative view is put forward in “Payback: The Case for Revenge” (Thane Rosenbaum; Apr 10, 2013)

3) Organizations (Authorities, communications protocols, and decision-making):

a)     Choosing By Advantages for making decisions. The Choosing by Advantages Decision Making System, Jim Suhr, Quorum Books, 1999. See also Decision Innovations and video (password, if required: 2010LCI) by Todd Henderson of Boulder Associates, and Alan Mossman’s report.

b)     The nature of interaction between participants. See books by Robert Keidel: Seeing Organizational Patterns – A new theory and language of organizational design, Game Plans – Sports strategies for success, and Corporate Players – Designing for working together and winning together.

c)      Collaboration, equity, fairness, and free riders and leadership. See papers by Sam Bowles listed above. These are particularly important for integrated teams.

d)     Cybernetics and the Viable System Model introduced in the IGLC21 paper “Management cybernetics as a theoretical basis for lean thinking” by Tobias Steinhaeusser, Fatos Elezi, Iris D. Tommelein, and Udo Lindemann. http://www.iglc.net/papers/Details/951

e)     Uncertainty as to what is to be built, and how, remains remarkably high as late as the start of construction. Worse, 85% of managers underestimate the degree of uncertainty as late as the start of construction. How do builders cope in terms of contingencies and exploration of the terrain ahead? How might managers make more accurate assessments? See “Report of the “Project Organization Task Force,” prepared by the Construction Industry Institute, Austin, TX.

f)       Cynefin Model. See Kurtz and Snowden’s organization and the paper “The new dynamics of strategy: Sense-making in a complex and complicated world.” http://cognitive-edge.com

 

So this is a start. Don’t be shy about sending me questions, giving advice or asking me to go fishing. G

 

[1] Early work by Professor John Fondahl (at Stanford University) and others aimed to optimize the project by using CPM to establish the lowest cost duration that that supported the customer’s requirements by “crashing” tasks to reduce duration in order to increase value delivered. This investment/return approach moved money across boundaries to optimize project performance in the situation at hand. This capability was lost as defensive contracts became prevalent.

[2] Completing the design for a hospital before construction begins can produce significant waste because the cycle time for new technology is shorter than the design and construction time of TP.