Creating a Culture-First Approach to Business Transformation

To transform your business, you can institute new procedures, purchase elaborate tools, or both. However, no amount of innovation and technology will work if you do not lead with change to your company culture. 

The scene is Downtown San Francisco, it’s a few months into the COVID-19 pandemic and subsequent state-wide lockdown. There is much social unrest in the area. City offices are reducing support and there is a slew of new restrictions for performing construction work, while remaining COVID-19 compliant.

A “live” data center facility owner requires a major equipment refresh, which includes 10 identical pods of their HiTec Diesel Rotary UPS System (DRUPS). The useful lifecycle of these components has reached its end. It is determined that the retrofits will be installed in phases to minimize impact to the functioning facility.

A schedule is drafted for the first installation of the work, which should be accomplished in four weeks. Coordination and planning of the project progresses vigorously with an experienced crew.

As part of the project’s due diligence, the street closure is announced to tenants and neighbors providing ample notice.

Sounds like this project is set up for success, right?

Well, you know what they say about the best laid plans…..

Due to the uncertainty of COVID-19, efforts are stalled. After a four-month delay, the project finally ramps up. The refresh of the first pod begins.

The installation team and the manufacturing team approach the work deploying “old-school” methods: paper schedules, weekly meetings, and regular progress reports. As is typical for the construction industry, the schedule was not met. The installation took twelve weeks, eight weeks passed the planned duration, which had been delayed on the onset!

What was the problem?

Remember the movie Moneyball? Brad Pitt plays legendary Oakland Athletics (A’s) general manager Billy Beane, who kept losing his best players to teams that could afford to pay them more. Beane’s challenge: he did not have the money or the marquee players to compete on the same level as the big-market teams. Tired of losing both games and players, Beane is highly motivated to engineer a shift. Therefore, he decides to apply an evidence-based, statistical approach to recruit undervalued baseball players. It feels risky, but Beane believes that an innovative approach is his only option.

So Beane, along with the help of a fictional character named Peter Brand, a recent Yale economics graduate, begin to challenge old-school traditions. The duo decides to choose players based on a theory that finds undervalued metrics from athlete’s on-field playing statistics. They subsequently exploit this data to hire players who cost less than they should. Nevertheless, that was only the tip of the iceberg. There was a much larger problem that loomed: skepticism. They would need to ignite a cultural transformation.

The change in player selection methodology was threatening to Beane’s scouts, who were accustomed to performing their job in a traditional manner. The scouts were arrogant and felt they knew it all.

They found the new path that Beane was introducing to them extremely intimidating. They were resistant. Beane was frustrated: they were not being innovative, cost-effective, nor taking advantage of the new tools at their fingertips. This lack of buy-in was causing conflict and impeding progress.

Similarly, our data center client, realized their process needed improvement. Yet, there was great resistance to change, especially from the field and operational teams. Adhering to traditional procedures felt comfortable, especially during an already unprecedented time. The business had much to contend with. Complying with physical distancing measures and managing a team (owner, designer, construction manager, and manufacturer) spread throughout two continents and six time zones. Still, these were some of the reasons why the company needed a cultural shift.

In Beane’s case, the attempt to change the culture of baseball was met with defiance from those who were accustomed to the status quo, as well as those who were fearful of adapting to unconventional but potentially game changing innovations.

In the event of our project, the owner, believing that something had to be done to ensure the schedule for the next installation, allowed for the introduction of Lean Principles with the application of the Last Planer System®. This created a space for deeper conversations around scheduling. Planning sessions coupled with daily status updates set the tone for improved collaboration between the owner and the subcontractor. Typical planning tools were used to manage the work: excel spreadsheets, emails, word documents, and several virtual and in-person meetings, etc. Although this effort accelerated the schedule, the second installation still took seven weeks.

Adapt or die.

After two failed attempts to meet the schedule, the “aha moment” for our client, as well as the rest of the project team, came when they suddenly understood what we had been saying for months; Their efforts were at best sluggish, even with coordinated processes. By the third of the ten scheduled installations, it was shown that a cultural shift and a new way of “doing” was needed.

We introduced technology tools, which supported lean-production planning and provided direct integration with a 3D-model, to our client. The 3D-model was an integral part of our plan, as it allowed for real-time data unlike anything that had been done before at the aging critical facility. This also allowed for the creation of a complete digital platform. Providing the project team with the tools they needed to collaborate and plan in real-time and gave the client the results they desired: quality work completed on time and on budget.

As Beane matter-of-factly states while he is having an argument with the Head of Scouting who is resisting change, “Adopt or die.” The statement delivers the simple but powerful message that is the cornerstone of our principles. Everyone benefits by leading with innovation and a culture-first approach.

To support our newly implemented process, training was provided on the application of the new performance-improving tools. Hence, everyone involved felt supported by our approach.

The new tools, coupled with our approach, had better than the desired results. The third installation of the pods were completed in only three weeks, one week less than originally scheduled. Validation! Our system worked.

Like Joe Ryan, Founder of GRA points out, “Technology and tools can’t solve the whole problem; people alone can’t solve the problem. It’s the combination and balance of the sum of all these capabilities, along with the creation of an integrated approach that solves the problem.”

The change in perception, focus, and culture all help foster the transition.

Following the success of this project, this data center facility owner has continued to use the recommended technology and processes on all new construction projects. For reasons inclusive of reduced delivery time, including the overall time required from the in-house staff, meetings that previously took more than two hours per week were shaved down to 15 to 20 minutes per week! Producing tangible results that profoundly boosted morale, while assuring team members that the “transformation” was working and validating our approach.

Beane goes on to win 20 consecutive games for the Oakland A’s. He drove a financially strapped team to a stellar winning streak, and subsequently championed the way baseball outfits view and value players today.

In the film, this catches the attention of Boston Red Sox Owner, John Henry, who offers Beane $12.5 million to become their general manager, which would have made Beane the highest-paid general manager in sports history.

Henry states, “You won the exact same number of games that the Yankees won, but the Yankees spent $1.4 million per win, and you paid $260,000. I know you’ve taken it in the teeth out there, but you’re the first guy through the wall. It always gets bloody, always. It’s the threat of not just the way of doing business, but in their minds, it’s threatening the game. But really what it’s threatening is their livelihoods, it’s threatening their jobs, it’s threatening the way that they do things…. I mean, anybody who’s not building a team right and rebuilding it using your model, they’re dinosaurs."