Generating Value
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Introduction to Generating Value
All over the design and construction industry, projects are filled with waste at every level. This waste mucks up project timelines and causes budgets to soar, and impacts customer value while creating headaches for everyone involved in the project and for the communities affected.
Here at the Lean Construction Institute, we believe that Waste and Value are two sides of the same coin, one a Yin to the other’s Yang. Thus, each time we reduce waste in a process, we are adding more value. Delivering value to the customer is the ultimate goal of Lean thinking.
But to generate value in a project, you must do more than simply remove waste throughout project processes – you must understand what value means in the context of the project itself and onboard team members to the Value Proposition of the project.
How do you generate value?
Value generation is dependent on your customer and what they define as value. The “customer” can be defined as anyone that you are providing information, services or product to. To generate value to our customer, we must understand what value is in the context of the request, then we can work towards delivering that value to them in the most efficient way possible.
What Does Generating Value Entail?
To begin generating value, you must first understand who your customer is. Your initial thought may be, “That sounds easy, it’s the owner!” In reality, the owner is just one of the many customers on a project.
At any given time, we are all customers of one another on a project team. This is because the “customer” is simply a person making a request, and we make hundreds or even thousands of different types of requests over the course of a project.
When you make a reliable promise to fulfill a request, it’s crucial to understand what “value” is to the person making the request. As a project team, you should take a step back and consider seeing things from the perspective of the owner. What are their goals? What defines value to them?
A high-performing team that practices the Lean tenets (Respect for People, Optimize the Whole, Eliminate Waste, Focus on Flow, and Continuous Improvement) understands that the value of the project is not monetary, and is both subjective and objective for the owner. Value is not how many walls or windows will be designed and built, but rather what the building will do for their business, community, and/or end users. This could include quality and safety elements as well.
For example:
- A pediatric hospital’s value statement could be: Eliminating childhood disease and healing our future.
- A pharmaceutical building’s value statement could be: Developing pharmaceutical therapies that will eradicate rare diseases.
- A high education building’s value statement could be: Cultivating the exchange of ideas, fostering the spirit of inquiry and enabling people to be lifelong learners.
Generating Value entails:
- Working and collaborating together with the customers early in the process to discuss and define the project’s Value Proposition.
- Prominently displaying the Value Proposition where the whole project team can see it so the team remembers what is driving the project forward.
- Continuously working in harmony within your team and between teams to ensure that non-value added activities or waste is identified and eliminated.
- Keeping an open mind for innovative ways to improve processes, or ideas that create more value.
Benefits of The Value Proposition
1. Stability
By bringing the entire project team together early in the process and establishing the Value Proposition, the team is better able to plan the project with a focus on optimizing the whole.
Thus, the team can look ahead to potential risks and opportunities that could arise throughout the process of the project, increasing the overall stability of the project and reducing the chances of something unforeseen causing damage to the project.
2. Organization
With greater team alignment via the Value Proposition, team members have a common goal and common understanding to work towards. This collaboration can lead to stronger lines of communication and organization.
By breaking down communication silos, waste decreases even further as teams can discuss solutions to problems together, plan future project steps, and identify areas of waste in hand-off processes and working processes.
3. Excellence
The ultimate goal of defining the Value Proposition and allowing it to guide the project is to align with delivering customer value and to increase overall excellence throughout the project.
With reduced waste and increased value, chances are the project outcome will be much more satisfactory to all parties involved, leading to a result that everyone can be proud to have been a part of.
How to Generate Value
1. Align
Align with the customer to understand their business case and why. Why is this project important for their business, their strategy, their customers, the community and social networks? What will this project help them achieve?
It is important to cultivate a clear value proposition that aligns your project team. Having a clear understanding of customer value is crucial to the success of a high-performing team.
2. Plan
Get every key member of the project involved in the process early to plan. This will be unusual for some members, but a Lean project is most successful when the design, construction, and trade teams are able to plan how they will deliver the customer value together.
Align the team members to the Value Proposition, allowing time for discussion and the understanding of why this is important to the customer. Determine potential risks and opportunities and flesh out a plan of attack for each of those areas.
3. Be Transparent
Being transparent is about more than just communicating with one another. Transparency also means being clear about your individual and team intentions, budget, and timelines.
Utilizing the value proposition and conditions of satisfaction to advance work through sound decision-making is important, ensuring that the project team is working to optimize the whole of the project not just their scope of work.
4. Be Open-minded
A high-performing team understands that creative conflict is important to further define and re-define how the project will deliver on the customer’s value proposition.
As we know, pushback and resistance to new ideas or change are often roadblocks on projects, especially when having to move quickly through the project lifecycle. Realigning to the customer value proposition can often help team members see waste and understand how innovation or processes changes can further align the team to the value proposition.
5. Improve Continuously
No process is ever perfect. Don’t let perfect get in the way of better. As a project team, there are always opportunities to improve and remove non-value added work.
If you find that you or your team has gotten stuck, bring in another person or group of individuals to offer ideas during the decision-making process. New perspectives can uncover areas of waste and opportunities for growth that may not have been evident to everyone else.
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