Case-company introduction

The case company is a multinational construction company and its operational headquarters together with most of its activities are in Finland. It is one of the largest construction companies in Finland. In 2018 the case company merged with another large-scale Finnish construction company, where it acted as the absorbing party. To date, the company has almost 10 000 employees in total and comprises various segments such as infrastructure, business premises, housing and paving. The company’s revenue in 2018 increased by 85% due to the merger and was around 3,7 billion euros, but its net income dropped 31% to only 39,2 million euros.

4.6.1. Performance Leap

Performance Leap (i.e. productivity leap) was one of the three key development initiatives in the organization’s 2016 strategy. The purpose of Performance Leap was to “increase competitiveness through development, not through (cost) cutting.”

The initiative aimed to increase people’s interaction skills and remove waste from working habits, decrease building costs in the housing segment by at least 15 percent and to find at least a 10 percent competitive advantage in business premises and infrastructure segments. What is meant with the “10% competitive advantage” goal and how it translates to practice is not explained. Performance Leap was divided into three sub-programs: (1) Securing know-how – developing collaboration and people’s interaction skills, (2) Design management – creating a design management model for the whole company to use, and (3) Partnerships and prefabrications – securing profitable growth by increasing productivity and efficiency. These three sub-programs were highly interrelated. Performance Leap will be further discussed in the following chapters.

4.6.2. Yearly survey questionnaire

An annual survey questionnaire is used in the case company to map the development progress of several different topics in each country. A total of 83% of the employees (n=8282) answered the 2018 questionnaire that was sent out in

September 2018. In the housing and business premises segments the respective answer % of the Finnish division was 78 % and in infrastructure segment it was 76

%. There were five main themes in the questionnaire: My own work, My superior, My work community, Responsible practices and The case company as an employer.

The results for the questionnaire were released in October. The results were coded in a 1 to 5 scale, and the reported percentages (see below) comprise the answers with values 4 (e.g. somewhat agree) and 5 (e.g. fully agree). The five questions that got the best grades in absolute values were:

1) I react when I see unethical or dangerous activities (91%), 2) My superior puts safety first (86%),

3) My colleagues work together to get the work done (85%), 4) I enjoy coming to work (82%), and

5) My superior is fair and righteous (81%).

The five questions that got the worst grades in absolute values were:

1) We continuously go through what we have learned (49%), 2) My performance appraisal was useful for my work and personal

development (55%),

3) My future in the case company seems promising (58%), 4) The case company shares best practices (58%), and 5) I get relevant and useful feedback (59%).

Some other relevant information was also presented in the questionnaire’s results.

People are skeptic regarding the leadership and the company’s development activities, as 65 % believe that the company is doing the right things to succeed in the future and 66 % trusts the case company’s top management. Interestingly, people seem to believe in the future of the company more than they believe in their own future in the company. The merger has probably affected this dimension by creating some uncertainty in the organization, for example in terms of overlapping work positions.

Many (78%) respondents think that the communication in their respective teams is honest and open, there are clear priorities (68%) and that the company utilizes up-to-date tools and working methods (68%). There are some disagreements in developing the activities through customer feedback (63%) and encouraging cross-division collaboration (62%). Lastly, the theme “Responsible practices” got the best values out of all the five themes i.e. people are happy with how things are managed safety-wise within the case company. The lowest valued theme was “The case company as an employer”, as people are cautious towards the case company’s current and future state and its leadership.

4.6.3. New management system GRIP

The new management system GRIP defines how performance is evaluated, managed and continuously improved. The term “management system” might be somewhat misleading, as the main purpose of GRIP is to bring the harmonized process charts and function-specific documents easily available. The system is cloud-based and it was deployed 1.1.2019 to be used by all starting projects and cost estimations. There are several main sections in GRIP, such as Management, Procurement, People, Finance, IT, etc., but the access is limited for most users.

GRIP has different instructions for different sectors and processes. For example, change leadership exists under Management and has a clearly defined purpose, scope, inputs and outputs, records and procedure. The procedure sub-section is divided into eight subsequent activities that have detailed instructions explaining how the change management should be executed in practice. GRIP comprises different process charts and relevant documents for each section, and different process models for seven types of projects, such as Life cycle projects, Traditional contracting and Project management contracting.

4.6.4. PI Planning

The case organization has started its SAFe journey around three years ago in the

“Customer Journey” function, and PI Planning is a fundamental part of the SAFe initiative. PI Planning is a two-day event that is held once every 10 weeks and the

purpose is to plan the upcoming development initiatives for the next four 10-week periods, where higher emphasis is put on the upcoming quarter. The development initiatives are put on a timeline, where the upcoming quarter has the 2-week iterations set on the timeline and the following three quarters comprise the whole 10 weeks inside them (see figure 2). The green development initiatives only consider the individual functions, while the red development initiatives are intercorrelated with other functions.

Figure 3. PI Planning schedule.

The researcher spent one day in the PI Planning event. The purpose was to understand how the SAFe model works in practice. A few key members involved with the SAFe development were asked why SAFe has been chosen for all development activities in the case company. The reasoning was success in the Customer Journey-function, where “its (SAFe’s) functionality has been proven through empirical evidence.” It is not surprising that SAFe is working in a function that is relatively close to what SAFe was originally developed for. For example, in the center of Customer Journey is a B2C platform. However, starting a full-scale development initiative without fully assessing the applicability of SAFe seems dangerous and could endanger the organization’s development activities, should the method not work as intended. Further, the literature regarding SAFe and Agile in the construction industry is very scarce, and the reference companies for SAFe are almost without exception IT-based (Scaled Agile 2018b), meaning that there is little to no knowledge on how to successfully apply these methods in construction.

The researcher therefore believes that there are insufficient justifications to apply SAFe to all the development activities without more in-depth understanding and

Procurement Dev.In. Dev.In.

Equipment Dev.In. Dev.In. Dev.In. Dev.In. Dev.In. Dev.In.

Infrastructure projects Dev.In. Dev.In.

Business premises Dev.In. Dev.In. Dev.In. Dev.In.

Housing Dev.In. Dev.In. Dev.In.

Performance Dev.In. Dev.In. Dev.In.

Paving Dev.In. Dev.In. Dev.In. Dev.In. Dev.In. Dev.In.

where Dev.In. = development initiative

Q3/2019 Q4/2019

21.1.-1.2. 4.2.-15.2. 18.2.-1.3. 4.3.-15.3. 18.3.-22.3. Q2/2019

planning. However, SAFe has been chosen as the method to develop the case company’s functions.

4.6.5. Quintet 4.0

Quintet 4.0 is a new project management system that is being developed for the case company. The development of the first version of Quintet was started in 2014, but the new Quintet 4.0 is practically a completely new program. The purpose of Quintet 4.0 is to have better project control by having the cost estimation, production and the procurement function implemented in the same system. The development however has been delayed considerably due to turnover and other factors.

Nonetheless, it seems that the case company will be moving forward with Quintet 4.0 and the purpose is to pilot it in procurement by the end of 2019 and in production during 2020. The program should, in its ideal state, bring the functions together and make communication, collaboration and information processing considerably better between them.

5. EMPIRICAL RESULTS

This chapter presents the empirical results from the qualitative interviews and the survey questionnaire. First, the interview results are presented and analyzed. The aim is to holistically portray the discussed topics while keeping the focus on Lean.

Second, the survey questionnaire’s results will be discussed and analyzed. There will first be general discussion regarding the results of the questionnaire and following will be the correlation and regression analysis, where the focus will be on the dyadic relationships between the questions.