Transcript: How to Achieve Breakthrough by Embracing a “Respect” Culture- with LCI Executive Director, Dan Heinemeier

Hello, I'm Brittany Campbell-Turner and this is the Constructor Podcast, session number 26. Hello, and welcome to this episode of Constructor, the best way to build it. This podcast is dedicated to helping property owners have certainty in their decisions about their construction projects. Our featured guest, Dan Heinemeier, is the leader supporting the Lean Construction Institute Executive Committee and as executive director works to transform the built environment through the use of lean principles, tools, and research. In this episode, we discuss Dan's background and interest in leadership and desire to implement goals throughout different organizations.

He's been able to impact different technical organizations holding an executive role. The core of Lean Construction Institute is another thing that we discuss. Its ability to impact in a real way comes from one of the core lean principles. This principle is respect for its people. So we talk a little bit about that and we also talk about upcoming initiatives for the Lean Construction Institute regarding outreach to design and owner communities and training.

So without further ado, here is my interview with Dan Heinemeier. Well good morning, Dan. How are you? Good morning, I'm well, thank you. Great.

Welcome to the Constructor Podcast. Thanks, great to be here. Well you have the opportunity to be the executive director at Lean Construction Institute. Tell us how you got interested in leadership and how you even got to this point. Sure, well I guess my career path to leadership is probably not a lot different than people in other industries or elsewhere in this industry.

I started out in the nonprofit world in the membership type organizations like LCI. Not too long out of college when I got an internship with a technology-oriented association back in the 80s. And from there I moved into mid-career and eventually upper level management positions within this industry. And over time I realized that I enjoyed the discipline, I enjoyed the opportunity to manage people and people seemed to resonate with my management style and I continued to get promotions etc. and kind of as a career path seemed to enjoy the leadership aspect.

I also really enjoyed working with boards of directors, which is another key aspect of leading an organization like LCI, helping boards to craft goals and then working with the staff and the volunteers to make those goals reality and move forward in terms of achieving objectives. So all of that kind of led to my increasing interest and desire to be in leadership roles and I was providentially offered opportunities to move forward and took them. So it's been a kind of a growth and progression like most people's career and one I've enjoyed quite thoroughly.

Oh, that's a lovely description of how you basically came up along the lines and were able to share your thoughts about leadership and I really appreciate that you were able to hold other executive roles for other associations. Were they all technology-based? Most of them were and it's been an interesting and very enjoyable transition for me to move to LCI. Most of my previous roles I've had the opportunity obviously to support other industries in a lot of capacities, but it wasn't until I came to LCI that I had the opportunity to work in what I would call more of a mission-oriented role.

Supporting organizations is great, but the mission of LCI is one that I really resonate Trying to transform an industry, trying to take an industry as important as construction is and help it to be more productive and get it moving forward from about the 54% productivity level that it's experienced over many years and moving it into higher and higher realms of productivity through lean tools and techniques is an exciting mission for me. What do you think about the... Go ahead. I was just saying that it seems like it takes your desire to take a team and even board of directors and establish something even bigger than the goals of the association itself.

It broadens it that much more to an industry. It really does and when I think about construction, this is the industry that creates the places where we live and work and recreate and get treated for illnesses and those places and those structures wouldn't be there without our industry. Helping our industry be more productive, helping the nation by extension be more productive I think is the exciting thing about working in the construction industry for me. It seems like there may be some similarities when it comes to maybe other technology associations and Lean Construction Institute.

So that we've established. Just curious as to technology itself and Lean, are there different things that you've seen and how to maybe implement some of the training or is there anything that interrelates based on your past experience here? Well certainly as you look at the way that technology is impacting construction now, many of those tools and techniques in here you think about things like BIM for instance. You would want to utilize BIM on a lean project just like you would on any other project. There are a lot of productivity enhancing tools that are out there, a number of which actually are there to automate and enhance the ability to use lean techniques.

I'm thinking here about tools that help with pull planning and reverse milestone planning, things that help with basic decision making tools like choosing by advantages. A lot of great tools that are out there and things that we certainly encourage companies to investigate. We don't as an organization endorse a particular tool. We think there's a lot of need for flexibility for people to understand and evaluate and adopt tools that most fit their corporate culture and the way they perform on projects. But we do encourage people to look at the variety of tools that are out there and implement them to the extent they can help with productivity enhancement on lean projects as well.

Okay, that makes a lot of sense. Okay, great. I did want to touch base on what you mentioned earlier. You're able to touch an industry. You're able to impact and transform through your efforts there at Lean Construction Institute.

Now, you know my experience thus far with Lean Construction Institute. I've had the opportunity to learn about it, get engaged with the community to practice here in Chicago. I was part of the planning committee there for the Congress that took place in October. I do want to just mention by far I haven't experienced an organization that valued its people as much as LCI. It's members when I say it's people.

For a technical association, it's pretty interesting. We tend to be a little bit standoffish, if you will, and technical, if you will. That's true. Brainy. Yeah, so I guess I'm curious as to for an organization that's advocating complex management goals like Lean Construction or Lean principles, what is it at the core?

What is it about LCI? How does that culture come together? Well, that's a great question. And one that I've reflected on quite a lot over the few years that I've been here at LCI. I think if you look at the Lean discipline and the way it's sort of built in and baked into the DNA of LCI as an organization, you're right.

We talk about the technical aspects, removing waste, focusing on process and flow, continuous improvement, the whole plan, do, check, adjust cycle. But underlying all of that is respect for people. And that I think is the defining characteristic of Lean that maybe differentiates it from a lot of other business process improvement tools that are out there. And as far as LCI's approach to our public, our members and volunteers, and certainly this comes across on board level as well, our board leaders all come from companies that are implementing Lean.

And within those companies, they are the cheerleaders, the advocates, the folks who are really out there on the front line encouraging adoption of Lean. And they bring that mindset into our board and our leadership structure. And they bring that mindset to me and my staff as well. So I really think that it's inherent to the way Lean construction has been developed over the years, this whole respect for people concept, that by extension is such a positive effect on our ability to interact with our industry and our staff and our key leaders as well.

So it's kind of a self-mutually reinforcing cycle of good as far as respecting people and trying to serve them through this set of tools and techniques. I think that speaks volumes for any organization who is willing to adapt a value of respecting people. And I love that it's cyclical. I love that it really is carried out through the board members and really trickles down to everyone just because it is one of those key concepts of Lean. That's awesome.

I agree. It's really gratifying to work in an organization like this. So let's talk a little bit about LCIS goals. You know that this podcast is dedicated to property owners wanting to reduce uncertainty in their projects. And Lean is one good way.

And in my book, probably one of the top ways to reduce that uncertainty throughout a project, whether it be cost, schedule, it establishes that platform to have these conversations and kind of get to collaborating and doing this in a great way. But for LCIS as an organization, how are you guys reaching out to owners, designers, any other goals that you have here? How are you guys reaching out? Sure. Well, let me start with just the design community first.

Other than owners, there's probably no more important community we want to impact as an organization than the design community simply because they are so formative and so important at the front end of the project and the ability to set the tone for collaboration and set the process in place to create true collaboration throughout the course of the project lifecycle. So we have a goal this year in our annual congress to move from about a 9% level of participation by designers to 12%. That will be a significant increase over last year.

And we're also working very integrally with AIA, the American Institute of Architects, looking at ways we can impact their programming and encourage them and their membership to look increasingly at Lean. And we have a lot of great cooperation going on with AIA all the time. So that design community is very key to us and it's one of our focuses at the board right now as a matter of fact in terms of outreach. Then let me move to owners. Obviously, they're the key.

Do you mind if I? Sure, go ahead. I was going to ask, do you mind if I ask just kind of a follow up question? Absolutely. For designers, what do you think are the key things that are going to hook them?

I think it's a tough community. So I'm just curious as to, and it's not hooking, right? It's just kind of establishing what Lean is and the value. Right. It's a good question.

And I think one of the things we're challenged with is simply the concept of Lean in the design community. When designers hear Lean, they often think, oh, this is all about reducing my profit margins and scaling back my ability to be creative because you're cutting back on my design work. It's actually quite the contrary. What we're looking at trying to do is help them see that we actually want to free up project dollars for enhanced designs and help them be more productive and more creative in the long run.

So that's kind of the mindset issue that we have to address and we're constantly trying to do that. We have a presentation going on at the AI Annual Conference coming up here in a few weeks in Orlando, as a matter of fact, as one aspect of trying to do that. So a great question and it's just really trying to help them see how Lean can actually work with them and not against them in terms of creating better designs. Does that conversation incorporate the utilization of BIM at all?

It could, although again, BIM is an enabler for any project, not something that we're specifically homing in on in terms of trying to encourage the design community to understand Lean better. Okay. No, that's a great direction that we're going and I'm glad to hear that. Okay. Well, feel free to talk about your goals at LCI regarding outreach to owners.

Yes, on the owner side, one of our goals this year, and it is very much a stretch goal, is we want to double the number of owner members that we have. We have approximately 30 owner members now out of a total population of about 200 companies. So we'd like to get to around 60. Huge stretch goal for us. We also want to increase their participation in our Congress from about the 9 or 10 percent overall headcount range to about 12 percent.

So in number terms, that's quite an increase this year. Lots of things we're doing in terms of owner outreach. We have an owner's forum coming off this summer. It's owner's only. It'll be in the Chicago area.

And this forum is really an opportunity for owners to hear from owners about how they have overcome challenges in implementing Lean, whether they're procurement challenges, regulatory challenges in the public policy environment, finance challenges, whatever, and having the chance for some small scale dialogue, trying to understand how to overcome those challenges in particular owner environments. So that's coming up in June. We'll hopefully have 75 to 100 owner representatives there. And that should be an outstanding outreach that we hope we'll be able to replicate, at least annually going forward, to help owners understand the benefits of Lean.

And the interesting thing about this, too, is we're actually pre-qualifying the participants. We're not just taking any owner that wants to come in. We're asking for folks to come who actually want to implement Lean and are serious about overcoming the challenges of doing that. So a little more selective than we might have been in the past. But I think we're at the point now where owners are understanding and beginning to gravitate towards Lean so we can actually focus on the ones who really want to succeed at this point in time.

Yeah, I think that's a great approach. You can get them much further down the path if everybody's committed. I like that. I do have a kind of a follow-up question that ties to your background with mergers and acquisitions. Just given that you've been part of leadership in the past.

How do you think the instances of mergers and acquisitions really is of interest to owners when it comes to applying Lean? Maybe in organizations more broadly and as it relates to Lean construction? Sure. I think it's fair to say that applying Lean tools and techniques to any aspect of your business is going to be valuable whether that business is the product of a merger or not. But certainly having gone through a couple of mergers in the association world myself, the notion of getting to the most productive structure for moving forward as an organization is critical if you want a merger to succeed.

So I think Lean has a lot to offer in terms of helping companies as they approach and move through that merger process. Also I think beyond just project work, people are recognizing that if you really want to get the full level of success that Lean holds out there as a promise, you have to take an enterprise approach much broader than just the forward-facing project work where you're perhaps meeting the needs of your owner or client. But actually moving that back through the back office operations like procurement and finance and marketing so that your internal customers, your folks who you serve as internal clients and customers in your own staff members actually are getting the same benefits of that productivity enhancement and that collaborative view of the world that your external clients and your owners are experiencing.

So I think more and more companies are realizing that if they don't eventually apply an enterprise approach to Lean, they're just going to miss the boat as far as the full benefits of Lean they can bring to the party. I think that's so key. I'm so glad that you mentioned that because I think it's hard to think about Lean in one aspect and really truly develop that mindset. So it's funny, I did a short presentation the other day, internal to our group at Maze, and I mentioned how I started utilizing it in laundry.

Being as simple as that or organizing your office supplies, I think it's really valuable to just transition that mindset and I really like the idea of doing it on an enterprise level. That's great. You bet. Okay. Well, let's talk a little bit about maybe some of the educational or training goals that LCI has.

What are your goals for this year? Yes, we have a variety of training programs that we're coming forth with this year, some of which we actually pioneered to Congress last fall and have continued to improve subsequently. We have some training programs coming out in areas like target value delivery, the whole big room concept from a practitioner standpoint, how you effectively implement a big room, and then going back and enhancing some of our longstanding programs like Introduction to Last Planner, Introduction to Lean, etc. So a number of programs that we'll be coming out with, some of which will be presented at our design forum, which we do in June every year.

I'd like to put in a plug for that. This is again our outreach to the design community. Happens in June in Chicago and we'll have about 150 people roughly in this program of training and plenary sessions where we talk about the importance of lean to the design community. So we'll pioneer some of our training programs there as well. I also wanted to talk more broadly about training in terms of how we interact with the AGC, the Associated General Contractors Lean Program.

This is something where they have, a number of years ago, actually before I joined the association, they have paid a licensing fee to LCI to license our intellectual property and they developed a seven module program for training folks out there in the industry. We certainly support what they're doing. We were involved in the development of the content, although it's a program definitely sponsored and rolled out by AGC, not by LCI. And it leads to a certificate that demonstrates a level of competency based on those seven modules.

So our goal in working with them is to kind of look at this, what they've developed as kind of a baseline set of understanding of the tools and concepts in Lean. And then the LCI approved content attempts to go beyond that in terms of practitioner oriented training and education books as well as coursework to help people get a little more in depth perhaps and a little better understanding of what it takes to do this as an actual practitioner, you know, going beyond the modules of training that AGC has actually developed.

I see. Okay. Well, thank you for mentioning about, first of all, the design forum. You guys will be in my neck of the woods and I think about half of the listeners are based here in Chicago. So do look out for that.

So that's great. Obviously AGC has done a great job to reach out to you and see the value in Lean construction and create that seven part training. That's great to hear. I do like the fact that LCI has kind of taken the opportunity to go a little bit more in depth in some of these key items like the big room or intro to Lean and whatnot. I think that getting these key fundamental concepts down really well are really going to establish good dialogue for the next steps for whatever the next most relevant training modules are if you will.

That's certainly our goal you bet. That's great. I'm actually, yeah, I'm looking forward to the design forum myself. Good. Last year I wasn't able to attend.

So with these training focuses at LCI, is there a level of standardization across the board? I mean I know there are other organizations who list out specifically these are the best practices laid out by this organization or recognized by this organization. Is there anything of that nature that's maybe going to take place maybe in years to come that we can look forward to? Yes, we actually have created what we're calling a learning cycle where we will take potentially even raw research and work it through a process of creating standard building blocks for Lean, moving those into an education development program and then pushing education out to our communities of practice, more or less like our chapters around the country.

So that standard building blocks process building is certainly an inherent part of that and I think you'll increasingly see from us book type materials and other materials that will hopefully begin to set some standards that people can rely on to move forward with Lean. Standard setting is an unusual task in some ways for Lean because we want to keep the discipline flexible and open. We certainly encourage people to use the tools and techniques that work for them. There's no one size fits all approach but certainly business process standardization is inherent in Lean as well.

So there's a kind of a natural tension that we want to provide standard practices that people can rely on without becoming set in cement and in ways that people think well if I just put these five tools in place now I'm Lean. That's really not what it's about. It's really much more about changing the culture and adapting aspects of Lean that fit your culture and help you improve as an organization and as a team. Oh that makes sense. So with that being said is LCI considering developing some certification then it sounds like because of the flexibility that might be challenging.

What are your thoughts on that? Well it's a question that comes up all the time and certainly something we've talked about at the board level and in our education committee many different times. I think for the present you won't see us come up with a certification program per se. I might draw a distinction here between what AGC is doing and what a full up certification program is. AGC's program and it's certainly valuable for what it is they simply give you a certificate at the end that says you've taken these courses and by testing we know you've assumed or been able to take on board and understand a body of knowledge.

A true certification program is much more like what you see in terms of certifying capability of people in an industry like the architectural field for instance. You have the AIA credential that demonstrates a level of professional credentialing and understanding that goes beyond just a simple course and a test at the end. So to do a certification program full up you have to obviously have the ability to monitor and keep records on and look at individuals and be able to test them periodically and provide additional training and monitor their ability to succeed as professionals for instance and actually implement a lean on projects.

That's a very resource intensive endeavor and as I mentioned earlier it's also an endeavor that sort of depends on standardizing a body of knowledge so that it stays stable over a period of time which again kind of runs antithetical to some of the lean thinking which is you want to be flexible and you want to be able to see evolution in the field and see it evolve and continue to change. So we talk about these things but I think for the present you're probably not going to see us develop a true certification program along the lines of some other professional credentialing that you see across the industries.

Okay, that makes a lot of sense. Okay well thank you for that response. At least for me it's an expectation and really digging into some of the things that LCI has chosen to roll out in regards to training. It seems like it's very intentional and that's really helpful to know that you're really just trying to build upon the key concepts which happen to be evolving if you will. So that's great.

Okay. All right well thank you thus far for answering all of the other inquiries I've had here. I always like to ask at the end of my interviews what strategies are best to go ahead and run with? What are the things that we can take hold of and start just implementing in order to find out the best way to build it? You know, which is the constructor tagline.

So in your opinion, what strategies would you recommend for an owner to start implementing Lean in their organizations? Sure. Well let me answer that question by talking a little bit about what's available through LCI for owners in terms of resources because I think that might help get them started. I think the first thing you want to do as an owner is you want to answer the question thoroughly why. Why do we want to embark on this Lean journey?

Because ultimately this isn't just a toolkit that you slap in place. It's a cultural change of an organization. If you want to do it right and realize the full benefits of it. So helping to answer the why I think is something we have endeavored to step up to in the last couple of years with some research that we've done. Research that demonstrates based on a Dodge Data and Analytics survey that looked at 160 projects and also a University of Minnesota study that looked at 10 IPD and Lean projects in North America.

And the results of the findings of both of those studies suggest that if you implement a variety of tools and techniques in tandem, something we're calling Lean Intensity, you have a 2X better likelihood of bringing your project in under budget and a 3X better likelihood of coming in better than schedule. So we hope that that research, and that's available on our website, will begin to answer the why and create a sense within an owner organization for the impetus to move forward and the need to actually take a hard look at Lean and moving forward with Lean.

In addition, as I mentioned earlier, we have the owners forum type activity that's coming up in June. We also will put owners in touch with each other through our network. If an owner is interested in just getting basic questions answered from another owner organization, we'll be very happy to try to link you up with somebody who can walk you through what some of the challenges are and how they've been overcome by others. We also have endorsed consultants on our website under resources if you look there, folks who can actually come in and help you implement.

And then last but not least, as you alluded to earlier, Brittany, we have our communities of practice, our chapter-like groups around the country in most of the major construction markets. And these are groups that get together monthly or quarterly and they talk about challenges and new tools and they put on presentations to help people understand how to implement and move forward on their Lean journey. So all these things are things that I think owners can rely on. And ultimately, I think if you're really serious about moving forward, you'll need to get yourself some consulting help to not only get you jump started in Lean but also develop your internal resources and internal champions.

Like the old saying goes, you know, we don't want to just hand you a fish, we want to help you learn how to fish. And that's really what these consultants will attempt to do to help your organization get a level of capability and competency in Lean going forward. That's a wonderful response and I definitely take all of those and second those. I think that research by the University of Minnesota and Dodge Data Analytics is truly enlightening. And I actually have the opportunity to do an interview with the main researcher I think you guys have been working with, Renee Chang.

Yes. In the coming weeks. So you guys will, the listeners will have an opportunity to hear a little bit more about the case studies that she has researched. So I'm looking forward to that. No, yeah, and thank you again, Dan.

I think LCI is a great resource to learn more, to get involved and any owner should endeavor to investigate LCI a little bit more to learn more and then reach out to the consultants if they're ready to just jump in and take this on fully. Right. So ways to contact you, what's the best way to get in touch? Love to hear from folks. The best way to reach me is email and it's a fairly easy address.

It's danh at leanconstruction, all one word, dot org. So danh at leanconstruction dot org and be happy to help anybody I can with next steps in your lean journey. Great. And then the website for our Lean Construction Institute is that leanconstruction.org? Leanconstruction.org, that's right.

Okay, great. All right. Well, thank you once again, Dan. This has been a pleasure to interview you. I really appreciate the time that you've taken out today.

Thank you. I enjoyed it very much as well. I hope you guys enjoyed this interview with Dan. He shed some light on the goals of LCI and what makes them the growing aspiring organization they are. Do look for the design forum event link in the show notes and you can listen to some of the feedback from the LCI Congress in episodes 18 through 21.

I dedicated the month of February to LCI Congress feedback and we have real time takeaways from attendees. So check out those episodes and see what type of experience you'll have at the design forum. Lastly, if you have not done so already, do subscribe at Constructor, that's ConstructRR.com, and you can subscribe at Stitcher iTunes. All right. Look forward to talking with you guys next week.