Whether it’s the cost pressures of commoditization and consolidation, or positioning and managing resources to ride boom-bust market cycles, the AEC industry faces plenty of business challenges. Successfully managing them often comes down to your client and how (or whether) your firm stands out in their minds.

In this issue of The Friedman File, we’re looking at how two very different firms have differentiated themselves and transformed their internal business by becoming early adopters of Lean. Long known as a manufacturing approach that promotes operational efficiency and value to customer, Lean now transcends industries, and has particularly gained traction in construction and with healthcare-focused firms.

It was industry-wide pressure that led 600-person geotechnical engineering and environmental consulting firm Haley & Aldrich (Burlington, MA) (www.haleyaldrich.com) to explore Lean more than 10 years ago. It started as an internal “behind the walls” discussion about improving operational efficiency. The firm hired a specialist whose background in applying Lean beyond manufacturing was a strong fit to guide them. But since Lean thinking is so customer-focused, that internal focus quickly became external as well.

As some employees gravitated towards the new Lean ways of working together, garnering it a cult following, others did not see the application to engineering and found it tough to connect the principles to their job. So Haley & Aldrich focused on applying Lean thinking and principles without the jargon that some found off-putting. One early success was employing Lean’s kaizen process improvement method, recalls Melissa McEwen, an early adopter and now the firm’s Management Consulting Practice Leader. Institutionalizing the kaizen process had many benefits, but McEwen says the greater success has been building on that to add other thinking skillsets, including collaboratively diagnosing problems, a deep focus on understanding customer needs, and conducting continuous improvement experiments as part of small project teams.

For 325-person Dome Construction (San Francisco, CA) (www.domebuilds.com), Lean offered a way to keep up with the growing workload of a hot economy. “We found ourselves working harder and not necessarily smarter,” says Steve Long, Director of Innovation and Learning. “We were asking whether we were doing a disservice to our employees by sticking with our status quo. We wanted to decrease stress and heavy workloads to promote better work-life balance.”

CEO Mark Bley thought Lean could help, although how the manufacturing process would translate to building custom-designed projects was unclear. He reassigned Long from his revenue-generating business development role to immerse himself in Lean to find answers.

Soon, they hired consultants and experimented with breaking down internal processes to better understand and improve them. They started sharing Lean philosophies with staff through internal communications and monthly trainings, providing a steady trickle of information about how to apply it.

As with any large-scale change, implementing Lean thinking takes time. It’s required patience, strong change-management strategy and a full investment from top leadership at both firms. Yet for each, there have also been wide-ranging positive implications:

Client relationships

At first, Lean wasn’t on Haley & Aldrich clients’ radar. But the early adopters who began to work this way experienced a better connection with their clients. The firm had always worked collaboratively, but was now integrating new ways of thinking and problem solving with technical engineering services. Clients noticed that a meeting was more productive than all the previous ones. Or that a team easily achieved consensus with regulators on a tough issue.

“In some cases, it’s not even visible to the clients, but it is visible in their results. It just became how we worked, and we became known for this way of thinking,” says McEwen. “Lean for us has deeply solidified the concept of stepping back, slowing down and understanding with the customer what they really need and want.”

This systems approach also exposed the firm to other parts of their clients’ operations and staff. When clients talked about sustainability challenges or operational processes, Haley & Aldrich proposed Lean-based solutions. They found themselves competing—and winning— against facilities management firms and process improvement specialists.

“We found Lean quickly builds deeper relationships with new clients because we are not working in a transactional way,” says McEwen. “It adds authenticity and transparency that could not have happened if we’d had a couple of conference calls and wrote them a report.”

Project delivery

Dome also quickly implemented Lean on projects. Lean’s Last Planner® System tool is now a staple of their project planning. After experimenting with the tool in its original form, Dome settled on a hybrid approach that bridges the gap between the traditional planning methods and the new collaborative style, but in a structured and premeditated way. Instead of dictating a finished plan to be carried out, tradespeople in the field now collaborate on the plan’s development.

“We want and solicit the candid feedback of the people who matter most, the on-site tradespeople,” says Long. “Our people were not accustomed to building schedules in a group setting, but now it just happens because it’s an expectation of how we think about projects at Dome.”

The firm also employs tools such as a “daily huddle,” a 15-minute conversation that provides a clear picture of what’s happening on a job site that day, and a “constraints and roadblocks board,” a public billboard for posting obstacles so that they can be addressed right away.

“A lot of what we’re doing is visible,” says Long. “This has created better clarity about what is going on with a project. Clients can see what we’re doing, and, in some cases, this has led to getting new work. Our structured way of getting things done and how we engage everyone on the team has been attractive to clients.” One potential client who witnessed Dome’s collaborative project management was so impressed, they hired the firm for a series of follow-on projects.

Services and markets

Some of Haley & Aldrich’s clients started to ask specifically for Lean consulting services to solve a business problem or training to implement Lean in their own businesses. That has diversified the firm’s client base and exposed clients to people within Haley & Aldrich outside of their primary contacts. Today, the firm has a successful standalone Management Consulting Practice and is implementing Lean principles into the delivery of a range of services across the firm.

Dome didn’t employ Lean because of their customers. Their markets weren’t focused on it at the time. But in the one that was— the healthcare sector— they felt unprepared to compete. Five years later, Dome’s project teams arrive at potential client meetings confident and speak from experience of implementing Lean thinking. The firm is finding that new opportunities in the healthcare market are coming much easier as a result.

Workplace and staff

In both cases, Lean has become a tool for triaging workloads. Instead of focusing only on getting work done, they’re asking what clients care about, how they want that work delivered and how to build teams that meet those needs.

“As a firm that is interested in driving innovation in how we and our clients do things, staff satisfaction and developing our staff as people and practitioners is a big piece of this for us,” says McEwen. “Client satisfaction will follow because they will feel the difference in those interactions.”

Dome hasn’t yet collected data on how Lean has impacted staff recruiting and retention. But Long says stress levels are down, workloads are more manageable, and the firm now has systems in place that have allowed them to grow sustainably.

Now, they’re applying Lean thinking and tools to another workplace challenge: improving advancement opportunities for women. Dome employs more women than the industry average, but a recent survey showed an opportunity gap still exists. “We have started to look at how to remove that gap, and using Lean tools to better understand the problem and how we might solve it.”

Are new ways of thinking and working differentiating your firm? I’m curious to hear what you’re experimenting with at rich@friedmanpartners.com or (508) 276-1101.