Archive for September, 2009

"Ten Years After"

Posted September 28, 2009 By Fletcher Groves

In the Spring of 1998, building upon its many years of process improvement experience in other industries, SAI Consulting began to help homebuilding companies map – to document, analyze, and improve – their business processes. Ten Years After (with a slight nod to the Woodstock Generation), we thought it would be worthwhile to reach back across the spectrum of those clients, to offer insight from our observations of their experiences and how their efforts have fared.

A COMMITMENT TO PROCESSES: The difficulties, the sometimes indifferent results, and the “tailing-off” of continuous improvement and process maintenance efforts leads us to conclude that the clients who find themselves in that position were not committed to the role of processes as the primary mechanism for how they created value for customers.

In almost any other industry, the central role of processes is indisputable. We have long characterized the homebuilding industry as having a “deal-driven” mentality, a proclivity to non-standard, non-repetitive work, which it substitutes for process discipline. Owners and management would rather spend their time deploying assets than leveraging their non-variable expenses (and thereby, becoming more productive).

It is a contra-process management mentality that manifests its presence when, no matter how many times they have done a particular sequence of tasks, they act as if they have never done it before.

THE MEANS TO AN END, NOT THE END IN ITSELF: The clients who enjoyed the greatest success from their project, and from their effort, were the ones who understood that processes were simply a means to an end, just one of the tools at their disposal in the pursuit of improved operating performance and the resulting business outcomes.

Mapping their processes was universally an eye-opening experience for these clients, but it was not that fact that made the difference. It was what they did with what they saw. Yes, they removed non-value added activities and value-killing characteristics in their processes, and they made the remaining value-adding activities flow more smoothly. But, they also began to systematically solve core problems and remove limitations.

They went far beyond the processes that were their initial step.

LEADERSHIP AND COMMITMENT AT THE TOP: The successful projects had the buy-in and commitment from owners and senior management, in stark contrast to the unsuccessful projects, in which owners and senior managers were either indifferent, acquiescent, or hostile.

Invariably, the feedback on the unsuccessful projects received from the clients themselves, concluded that those projects were doomed from the outset by the attitudes and behavior of owners and management. It was not uncommon to learn that there were agendas that had little to do with better processes and continuous improvement. There was little appetite for – or expectation of – the change that would be necessary to achieve results.

In contrast, the most successful projects were resolutely lead by owners and managers who had a vision of what the work could accomplish and a determination to see that result achieved. These leaders and their teams also demonstrated a willingness and capability to make the changes that were necessary.

LEARNING AS AN OUTCOME: We have never had a homebuilding client that actually understood anything about processes, workflow, and process improvement going into the engagement. For the most successful and far-reaching projects, clients treated learning as an outcome.

For those clients, it was not enough to simply document, analyze, and redesign processes and workflow. In the most successful projects, clients took it upon themselves to learn about processes, production systems, and much more. In the less successful projects, clients learned little about anything.

ADAPTING THE SOLUTION TO THE CONTEXT: To the extent that clients entered their project with a preconceived notion of the direction of the solution that would come from mapping their processes, they often sacrificed a better, stronger set of improvements.

Homebuilding is not automobile manufacturing or healthcare. It has a unique set of requirements that exist within their own context and parameters. Solutions do not come in convenient, dehydrated packages, to which you add water. Blindly imposing solutions from different environments did not work. The most successful engagements crafted the solution (including the processes) to match the specific requirements of the homebuilding industry.

NOTE: The entire report, including the process mapping methodology used, the survey itself, an analysis of the survey responses, the problems and issues, and the recent advances, improvements, and solutions in process management, is available upon request.