For Construction Firms, a Strong Case to Commit to Running Lean
In a market where competition for projects and talent are fierce and likely to intensify, the edge goes to firms that operate in lean mode. Here’s an industry veteran’s playbook to gain that edge.
by guest author Dennis Cornick
In the construction business, time equals money. The more efficiently you get things done, without compromising quality or safety, the more you save on project costs, and the better positioned you’ll be to deliver positive and profitable project outcomes, and win more work, both new and repeat.
High-performing construction firms are built on this efficiency paradigm. They excel in their project work, have a thriving culture and are consistently profitable because they operate in lean mode. “Lean” in this case describes an intentional approach to running a highly efficient construction business. And as firms that run lean will attest, it certainly has its benefits. Lean construction firms tend to deliver projects more profitably, and with more value to the customer. The quality of their work is consistently high. Their scheduling is always spot-on. You’ll know a lean firm by its “one-company” culture, which helps to attract and retain talent. All of which drives growth and differentiates the firm from its peers in competing for new business.
For a lot of construction firms, becoming a truly lean construction firm isn’t a huge leap, but rather just a commitment to formalize and follow a set of basic principles, at least some of which you probably follow already. Evolving into a lean construction business needn’t be disruptive to your business. In fact, the outcome should be just the opposite: harmonization and synchronization across the business.
Drawing from my own experience in a lean construction business, let’s look at 10 approaches and practices that will help get you there:
- Have an integrated stakeholder team in place from the earliest stages of a project. The best project outcomes tend to happen when the various parties — architecture, engineering and construction firms, the project end user and its board, project managers, procurement and others — are aligned and have a voice and a role in decision-making, issue-resolution, etc., from the start.
- Always be alert for opportunities to capture new process efficiencies. The goal: avoid wasted time, effort and materials.
- Focus unwaveringly on quality. Sacrificing quality is a non-negotiable.
- Never compromise on safety — another non-negotiable.
- Invest in employee training. Training and continuing education are a must. A commitment to learning starts with company leadership and should be part of the organizational DNA. From employee onboarding, forward, reinforcing a culture of continuous learning lets your employees and your customers know you’re investing in them.
- Leverage digital tech to enable fresh, timely information and insight to flow across the organization. Today’s best-run construction organizations have a fully integrated digital infrastructure, enabling data and insight to fuel better and timelier decision-making. The result: a more nimble, resilient organization.
- Create simpler contracts. Taking some of the complexity out of contracts generally makes for a smoother, less contentious project.
- Proactively anticipate and mitigate supply chain issues. Having a resilient supply network with multiple reliable sourcing alternatives helps to avoid disruptions.
- Communicate openly and collaborate freely with all stakeholders. A foundation of trust between all the key players is key to working through issues and delivering a positive project outcome.
- Meet deadlines. Time is money in the construction business.
Successfully implementing the principles of lean construction takes buy-in from the top, down, along with a commitment to stick to the program, to measure the extent to which the principles are being implemented and followed, and to hold people accountable based on those metrics.
How will you know those principles are taking root and you’re becoming a lean construction firm? Watch for these indicators:
- Flexibility. Changes and unexpected developments don’t disrupt projects, and adjustments can readily be made on the fly without causing much or any disruption.
- Innovation. New ideas and approaches are welcomed by the stakeholder team and can be implemented quickly.
- Teams thrive due to a high level of collaboration, leading to better project outcomes.
- Projects are run methodically, with well-defined processes and a commitment to following those processes. Playbooks are a way to accomplish this. They formally document process X’s and O’s in detail, and are easily referenced to keep people on-point in their work.
- The organization runs efficiently, with low overhead. Waste, delays and cost overruns are rare.
- Teams are highly productive. The right people are performing the right work at the right time.
- Teams are task-oriented, focused on priorities and how to execute them. Everyone’s synced to the tasks at hand.
- Workflows are streamlined. Repetitive, manual tasks have been replaced by automation.
- Decision-making is collaborative and inclusive. Stakeholders feel as if they have a voice at the table.
- Customers walk away satisfied they got what they paid for. It’s all about value.
- Positive project outcomes help generate more (and repeat) business. Good work begets more good work.
- The firm excels at attracting and retaining top talent. Lean construction firms generally are the kinds of companies people want to work for.
In a construction business where opportunities for growth and generating new business abound, the time, effort and resources it takes to evolve into a lean construction firm are minimal compared to the benefits your firm is bound to reap from that investment.
If you’d like to learn more about what becoming a lean construction firm entails, please do reach out to me via email at email@example.com.
Dennis Cornick has worked in the AEC business for over 40 years. He recently retired after 33 years with Gilbane, a 153-year-old global provider of facilities and construction services with an annual volume exceeding $6 billion. During his tenure there, Dennis led strategic and tactical initiatives, resulting in consistent sales, revenue, and profit growth. He now heads his own consulting firm focused on strategic, sales and marketing components in the AEC industry.