Is Digital REALLY going to improve project productivity?

The World Economic Forum (WEF), with its Future of Construction initiative has done great work in highlighting the need and the opportunity for the construction sector to improve its productivity.

However, their recent infographic (below) about technologies that will help improve productivity, seems to overlook at key point. That they dont really stand a chance of delivering any improvement by themselves.

My concerns are not in the ideas themselves - they will help (some more than others).

But they are secondary contributions. Without the right project environment in which to implement them, they are unlikely to deliver their potential.

This can be seen from the fact that many of the 'technologies' are not that new. They have existed for several decades, and even in their earlier guises they had the potential to significantly improve projects. But they weren't used anywhere near often enough. And what has changed to make us think they are more likely to be adopted by projects today?

Implementing the "10 technologies" by themselves is like having an old car and adding a few features that the fastest racing cars have. They will not make the car a fast racer.

This car has many things in common with a racing car - low suspension, rear spoiler, sports seats, a number on the door, and wide tyres.

But I doubt it will go any faster than the base model underneath.

And projects are the same.

If you just add BIM, off-site, cloud computing, advanced materials, or photogrammetry, to a traditionally organised and procured project, I doubt that you will get much benefit.

This will not happen...

It isn't that simple. The absence of these technologies is not a reason why some projects are inefficient and ineffective.

A strategy to improve has to have more than a loosely connected set of actions or techniques. A good strategy will need to evolve in layers, just like a construction project. You first build the foundation, then you build the main structure, then you finish it.

And to me the items on the WEF infographic are focused on steps 2 and 3, rather than step 1, the foundations. Without a good foundation, the main structure and finishes are irrelevant.

That is often a problem with research. After data is gathered, the researchers look for patterns and correlations, like "Good projects do XXXX". But if we stop there and assume that "If I do XXXX, then I will have a good project", we are not being scientific at all, we are guessing. Just because fire requires oxygen (a correlation), doesn’t mean that whenever there is oxygen there will be a fire (causation).

The next step in the scientific method is to develop a theory that shows the causation. And it is this theory that gives us the opportunity to make a significant improvement.

"A business man once stated that there is nothing so practical as a good theory". 

Kurt Lewin, pioneer of organisational psychology.

So back to racing cars, it is not enough to realise that the fastest drivers accelerate hard and sit in sports seats, and do the same expecting to drive like they do. You need to learn the 'theory' of how to drive fast. 

It is not enough to take the Lean Construction toolkit, or BIM, or offsite manufacturing, and use it on your projects, and expect better projects. You need a good theory of project management.

You need to think cause-and-effect. And only once you know what is causing the unsatisfactory results, do you have a chance of sustainably overcoming them.

The thing with cause and effect thinking and the scientific method, you only need one counter example to disprove the theory (known as "falsification"). And there are plenty of example of great projects that didn't use the WEF's 10 technologies, showing their lack of use can't be a root cause of project failure, and so using them is not a good theory for success. For example look at the "Construction Benchmarks" section in this recent article.

The best performing project is from over 90 years ago - when "blueprints" were blue and "the cloud" was something that blocked the sunshine.

Lack of digital didn't hold it back.

The Root Cause of Poor Project Performance

The root cause has been known about for decades, but most attempts to overcome it have fallen short. It has to do with the fundamentals of how the project team is put together and managed. Fragmentation - not of the industry, but within an individual project.

We break projects up into smaller and smaller parts, and then get each part to commit to some 'local' target, and then hold the part to that commitment. We put much less effort into synchronising the work of each part and aligning them with the project' s overall 'global' targets.

And this is where we have got it wrong. Systems Theory can prove that you can't optimise a system's performance by optimising each part and summing the results. This approach produces sub-optimal overall results, and I think it lies at the heart of the problems we see today. We are not managing projects in a systemic way.

A systemic approach to project management would include more focus on interfaces and synchronisation than the elements themselves, and less trying to predict the future and manage performance using firm commitments.

In practice this means more true collaboration across the whole project team, and the use of performance management and control systems that are more suited to managing uncertainty in a systemic way, and which give much better real-time information to project team members and managers.

For a project to stand any chance of delivering the best value and performance, you need a team where there are no barriers to collaboration. And most projects put in place several such barriers. These barriers are bigger on capex and construction projects compared to mainly 'in-house' projects, because of the commercial contracts between the client and those delivering the project.

The 4 main barriers to project team collaboration and performance are:

1. Team members are measured on their individual performance.
2. Key team members join the team too late on.
3. Team members are expected to keep busy (high utilisation).
4. Team members are expected to give highly reliable commitments.

Now each of these barriers by itself seems eminently logical, and not a 'bad thing' at all. And for very simple processes and unimportant projects, they might be OK.

But on any non-simple project, they cause significant problems. And by my definition, any project bigger than $1 or 2 million in value, is non-simple.

The scientific basis for these barriers has been demonstrated by both behavioural research and by systems theory. But most of us can intuitively relate to the idea that without these barriers a team will be more likely to perform well, ie when:

1. Members are more interested in how well the team does, than their individual contribution.
2. Key members are on-board from the beginning, rather than joining just before they are needed.
3. Members have the capacity to quickly respond to unexpected variability, rather than be fully loaded.
4. Members do their best to meet the overarching project goals, rather than meet a pre-defined task-level commitment.

But that is not what most projects do. Most projects...

• Have separate contracts and contract terms between different members of the project team. These incentivise team members to get their own scope right, over the needs of the project.
• Prefer fixed price and GMP contracts for the majority of the work, which in turn leads to last-minute selection. How often after a selection process taking 6 months, does the project expect the successful bidder to mobilise within a few weeks. Little time to develop relationships. Little time to consider any creative innovations. Fixed-price bidding also adds time, and design work is done without the input of the construction experts.
• Build "must hit" cost and time targets into contracts, meaning uncertainty allowances are hidden or ignored. These targets are pushed down to the lowest possible levels of the project. Everybody knows that estimation is uncertain, but the need for certainty means that any 'good luck' that the task has is lost to the project, because the task manager doesn’t want to be seen as an over-estimator, or sandbagger.
• Believe that doing these things "reduces risk". It doesn't, it gives false hope, and adds significant risks, like the risk of paying far too much, or the project taking far too long.

So what? The bottom line

Most of today's project management methods and performance measures embed the 4 barriers to collaboration, and we have got used to working with them. They are not even seen as problems, more 'facts of life', which is why they receive little attention in the WEF's recommendations.

But they are at the heart of issues like the unreliability of project performance, high levels of stress, low productivity, long durations, high costs, high levels of disputes and litigation, low profitability, and of course the difficulty of implementing innovation.

The people who work in the construction sector are not less creative or innovative than anyone else. They are just forced to work using a process that inhibits collaboration and is very inefficient.

And until that changes, nothing will change.

Until projects change the way they are procured, planned and managed, there is little hope of fully exploiting any project 'good practice' - whether a proven method like off-site manufacture or BIM, or a more recent development like 3D printing and new materials.

To overcome these barriers, you don't need to invent anything new. Simply use two innovations that have proven themselves over the past 20 years.

1. Use a Project Alliance (IPD) [1] to contract a multi-party project team, as early as possible in the project process. Billions of dollars worth of projects, or all sizes, have been successfully delivered this way
2. Plan the overall project using Critical Chain Project Management (CCPM) [2], and use this as the basic for your project control. Many organisations have used CCPM to reduce project durations and improve reliability, in all fields, inducing capital and construction projects.

Making just these two changes will give you a great foundation of a collaborative team, with a shared interest in making the project successful, and a robust and short schedule that is highly likely to be achieved. By themselves they will reduce project durations, reduce costs, and improve reliability.

And in addition it will really help the team to exploit a range of value-enhancing practices, including those '10 technologies' highlighted by the WEF.

Footnotes:

[1] "Project Alliance" and "IPD" (Integrated Project Delivery) are the same thing. IPD tends to be the more common term in North America and amongst the Lean Construction community, with Project Alliance more common elsewhere.

[2] CCPM replaces the more common critical path programme & project controls like Earned Value measurement. It combines well with visual management methods like Agile and LPS, with CCPM used for project-level management, and the others used for day-day team synchronisation.

The Author:

Ian Heptinstall is author of "The Executuve Guide to Breakthrough Project Management", and works independently helping project managers to improve the performance of their projects.

www.IanHeptinstall.com