Lean Principle - Kaizen (Every Detail Matters)

As contractors build their businesses, it is important to look at every detail from the first meeting with a potential customer through winning and building the project. This same attention to detail also applies to supporting operations and talent.

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Takeru Kobayashi or Usain Bolt? 

Who would you choose as a role model for improving your project, team, and business?

Field Productivity: Lean Principle. Kaizen (Every Detail Matters)

 

This unrealistic question is only meant to illustrate two critical points:

  1. Attention to every detail focusing on continuous improvements (Kaizen) is crucial in any competitive environment - and construction is definitely competitive.
  2. In a mature competitive environment like Olympic sprinting, there is a much smaller gap between competitors. Construction is not a mature competitive environment and that is a huge advantage for some contractors. 

 

Quick Background (Olympics and Eating Contests)

The 1896 Summer Olympics were the first international Olympic Games held in modern history with athletic competition going back to our earliest recorded history. 

Usain Bolt's earliest competitions were in 2001 and he set a World Record for 100 Meters in 2009 at 9.58 seconds. As of the end of 2023, this record still stands and was 2.1% faster than the 1999 record of 9.79 which was 20 years prior.

The Olympic games have revenues and costs measured in billions of dollars with broader economic impact including brand influence well beyond that. For a star athlete like Usain Bolt, their compensation is millions of dollars per year

Nathan's Famous International Hot Dog Eating Contest was inaugurated in 1972 with records and tales of feasting competitions in various cultures where gluttony was often seen as a sign of strength and power. 

Takeru Kobayashi also had his first competition in 2001 where he ate 50 hot dogs in 12 minutes doubling the prior record from 2000. Takeru continued to improve on that record through 2006 getting about 7.5% faster. 

In 2008, the time constraint was lowered to 10 minutes and the new record set by Joey Chestnut in 2022 is 76 which is 1.7X the production rate of Takeru's 2006 record. 

The contest attracts 40K live spectators and 2M virtual viewers. By contrast, the Summer Olympic games sell about 6.5M tickets (160X more) with another 3 billion viewers (1,500X more). The financials for Nathan's and compensation for competitive eating are similarly unequal when compared to the Olympics and top athletes. 


 

Training History (Usain & Takeru)

“We don't rise to the level of our expectations; we fall to the level of our training.” - Archilochus (650 BC) and often cited by Navy SEALs

 

There is plenty of information available on training of top athletes including their autobiographies. It is nearly incomprehensible to understand the magnitude of the body of knowledge around performance, the myriad of specialist's used by top athletes, their training, diet, and recovery.

Relentless by Tim Grover who coached Michael Jordan, Kobe Bryant, and Dwyane Wade is a good starting point to understand the intentionality and intensity that goes into building a top athlete over decades. Brad Gilbert who was one of Andre Agassi's coaches described the details down to packing your bag in Winning Ugly. Special Operations has a similar level of selection and training process which Rich Diviney describes well in The Attributes.

The construction industry is nowhere near that level. Contracting is a highly fragmented market with about 1 million businesses largely figuring it out as they go along. 

By contrast, Takeru was largely self-taught as detailed in the book Freakonomics. The resources, tools, and tactics he worked with are more akin to what the average contractor or person in the construction industry would have access to. Some of the basics included:

  1. Spending a year training before his first contest.
  2. Keeping a detailed training log including video of his eating sessions.
  3. Experimenting constantly to figure out the optimum process including sequencing - think PDCA Cycles which only work if you have standards and feedback.
    1. Learned that pre-processing (think prefab) helped him eat faster so he used his hands to pull apart the food including separating the dog and the bun and breaking the dog into pieces. 
    2. Learned that soaking the bun in water made it faster to eat.
    3. Learned that warm water worked better than cold water.
    4. Learned that a little vegetable oil in the water worked even better.
    5. Maintained a high fitness level.
    6. Developed the "Kobayashi Wiggle" to help settle the food in his stomach faster while eating.

The techniques he learned were trainable and therefore scalable. They were able to be learned and used by others who continued to improve. 

This last part is especially important for contractors as the talent shortage will continue to worsen through 2030


 

Kaizen is a Japanese word meaning improvement. As part of the lean body of knowledge, it refers to the concept of continuously improving all business functions and involving all employees from CEO through the field. 

It is called many other things, but the concept is the same.

Aggregation of marginal gains is another term and used by many sports teams from Olympic bicycle racing to the All Blacks rugby team.  This essentially means taking everything apart and identify even the most marginal gain - for example making the bicycle chain 1% more efficient. 


 

CRITICAL NOTE: Continuous improvement is foundational for Operational Excellence, but you can't continuously improve your way past poor strategic choices.

No amount of continuous improvement was going to allow the dominate horseshoe manufacturer to compete with Henry Ford. 

Be cautious not to get caught up in incremental improvements that don't change the outcome or distract you from making tougher decisions around strategy, markets, and talent


 

700% Return on Investment Example

Paul Akers (2-Second Lean) does a great job of demonstrating Kaizen and standards in this video. While it can seem monotonous to watch, pay attention to the continuous measurement and experimentation. 

Notice their use of operational math starting with knowing that it costs $0.25 per minute to self-perform this task and given the pricing of outsourcing it, anything under 3 minutes each makes it more profitable. Think about this the same way you would a task on the jobsite or in the office. Whether you can self-perform competitively is the first question you have to ask and answer. 

Their first timed experiment was 0:45 so well under the 3 minutes but remember we have to factor in non-installation time like we do in construction. That is a secondary issue to work through but worth noting. They also paused to review some quality details and adjusted the standard

Notice the excitement and engagement from Paul how he plants seeds and reinforces key metrics and concepts while asking questions to develop the team. It's the Manager: Moving from Boss to Coach.

Even for a task as short in duration as this, he reinforces that it is still a series of much smaller movements. Saving a second on each one adds up to bigger savings for the total tasks. Seconds turn to minutes and minutes become dollars. Saving 10-minutes per day for a contractor with $15M in labor costs yields $500K in savings.

They designed the experiments as cheaply as possible to prove or disprove their ideas. 

Not all ideas worked out, especially after the 8th iteration, they were undoing some things and some of the times actually slipped backwards. Progress is rarely linear - especially after the more obvious improvements have been made. This is why Usain's improvements were much smaller than Takeru's. 

The video shows 15+ iterations with likely 3-5X that many behind the scenes. That's the persistence required for continuous improvement. 

Of those that were timed in the video, over 20% went backwards on the timing - don't forget how easy it is for people to become discouraged by this which is why management's positive engagement is so crucial. 

The result was a reduction in time from 0:45 seconds to 0:15 seconds each. At 150 units per day, this is a savings of 75 minutes per day.

What's the Return on Investment?

Assuming this experimentation took a full day of limited production to do while involving other people including a supervisor and a higher-level manager that could be estimated as follows:

  • 480 minutes for the person doing the task.
  • 480 minutes for their supervisor multiplied by 1.5X to account for the pay difference totaling 720 equivalent minutes. 
  • 480 minutes for the Manager Once-Removed (MOR) who has broader context, deeper experience, and the ability to allocate more resources multiplied by 3X totaling 1,440 minute equivalents. 

That's a total of 2,640 minutes or minute equivalents looking at higher levels of compensation for the manager and their manager or some other specialist. Return on Investment (ROI) calc:

  • Pay-back in about 35 working days (2,640 / 65)
  • First-year return of 710% based on saving 75 minutes per day, 250 working days per year or 18,750 minutes total (312 hours). 18,750 / 2,650 = 710%.

Critical Assumption: There was other work for this person to do for the time saved during the day. This is the responsibility of supervisors and managers. If the savings doesn't result in extra total work being completed, then it is just waste. 

Bigger Intangible ROI: The lessons learned by those front line and supervisory team members getting used to improve other areas of the business and training other team members. 

Always do the math of prioritization.


 

Reflection Questions

What are the tasks that you do most frequently on your projects? Think in terms of units per year.

What would an exercise like this look like to improve those cycle times?

 


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