Project Changes – Time Stamps

Project Changes: Theory of Constraints and the Global Optimum

Here’s the third cause for project failure: project changes. And the biggest problem with changes is that we don’t understand theory of constraints and we don’t look at it from a global perspective. We look at it from our localized piece. So you’ve got everyone with their different agendas looking at it, and we tend to hide everything. Visual planning is a key to stopping project changes. When people can see the plan and they know where everyone’s heading, the changes start to come down.

But you can’t do it once. It’s not one and done. It’s constant. And it ties directly to theory of constraints and the global optimum.

The Pain of Changes That Don’t Serve the Global Optimum

Let me tell you a story. I was on a project during COVID, back in 2022, 2023. And the global optimum it was an iron ore project. So iron ore at this particular point in time is about 220, 230 tons a day. So every day that we’re late, it’s costing the client around about $20 million a day in lost production.

So we’re trying to get a conveyor belt up and running. And part of it was, I was looking after a contractor installing the fire water system for that particular conveyor belt. You can’t run the conveyor belt without fire protection in place. So I’ve just about got this thing signed off. It’s in the death throes to get signed off because we’re going to run the belt tomorrow. We just finished hydrotest and pressure testing it.

Beside me is a young lad that they sent up to site, a young piping engineer. And I can hear him on the phone to this lad down in Perth, which is about 1,800 kilometers away from the actual site, this design engineer. And he’s saying to him, “I want all these changes. So I want this valve moved up. I want this pipe moved across this way, this, this.” He’s marking up a P&ID as he’s going with all these changes. And I’m sitting beside him going, “There’s no way in hell any of these changes are happening. I’m telling you right now.”

Anyway, so the poor kid’s stuck in a mood. And he comes to me as soon as he hangs up the phone or gets off the Teams meeting. And I said, “Is there a safety issue or is there a detrimental issue out of everything that he just told you then?” And he said, “No.” I said, “Good. Nothing’s changing.”

The global optimum was we needed that belt running to get dirt into a train so the client’s making money. The guy in Perth sitting remotely who has his local optimum looking at it going, “Oh, if I move that pipe up 50 millimeters, that might make that a bit better,” isn’t taking into consideration there’s a train coming tomorrow. We need to put dirt onto it so that the client can get his $20 million.

And that’s how you manage changes.

Theory of Constraints and the Global Optimum

Here’s what theory of constraints teaches us: if we’re going to make an adjustment or change or interrupt or insert variation into this process or system, it had better be to optimize the whole and improve the global optimum. It has got to help us reach the goal and create flow. And if we’re creating changes and variation just for the sake of doing it, or for some other reason that doesn’t meet the goal, then we are off track.

If the design engineer had a change in there and said to me, “Unless we move this up 100 millimeters, you’ll run that belt for about two hours tomorrow and the system will shut down and everything will stop,” I’d go, “All right, we need to change that.” But that’s based on global optimum. That is, is that change affecting the system?

It wasn’t. It was nice to have. And too often the changes that we get caught up in are nice to have that don’t really need to happen. And it’s because people can’t see the big picture. They don’t understand that if they’re the orange square there on the Takt plan, they’re putting the red square out by making a change that isn’t really necessary.

And this is where we talk about being hard on the process and not hard on the people. The people are making these decisions because they don’t see the big picture. They probably have no idea that the client’s losing $20 million a day while they’re sitting around wanting to move a piece of pipe 50 millimeters.

Visual Planning: Getting Everyone on the Same Page

Visual planning is the key to stopping project changes. When people can see it and they can walk in and they can look at what the plan is, and they know where everyone’s heading, we can get everyone heading in the same direction. Then the changes will start to come down.

Here’s why visual planning works. I always bring everything back to sport. And sport is where the best teams are, generally speaking. I mean, we’ve got Navy SEALs and those sorts of things, but predominantly where you get a group of people working really, really well, it’s a sporting team. And they’ve got one ball that they’re playing with and they’ve got a clear focus. Where does that need to go? There’s a set of goalposts or whatever it is. There’s a line that you’ve got to get across, whatever it may be, a net. In tennis, you’ve got to get it across the net, but you’ve got to keep it within these boundaries. They know that.

We don’t have that in construction. We don’t do it well. The Takt plan, I believe visually and of all the tools we have, is the most powerful and the most important of the lot. We know what the problem is. We need to get everyone on the same page. How many times have you heard someone say, or how many times have you said, “We need to get everyone on the same page?” Then we give them an 80-page schedule. How the hell do we get them on the same page when we’ve got 80 pages? We need one page.

Everyone can look at it quickly and go, “We need to be there by that time.” That then calms all the changes. Because it’s about what decisions they’re making that’s creating all these changes. And if they go, “Oh no, we really need to get up into this top corner up here. If I changed what I’m doing at the moment, is that really going to help us get to that top corner? Or is that going to constrain us and stop us, slow us down, stop the train coming so we can’t get that dirt out the other end?” That’s the real goal. Until we get that one plan, everyone on the same page, we’re going to struggle with changes.

The Three Keys to Managing Changes

Here are the three keys to managing project changes and reducing variation:

Key One: Verify Full Kit Before Starting

Do not start a job unless you can finish it. A lot of the changes we see in the field come from supervisors who tend to sit on that sort of ADD spectrum. So focus and going in the same direction for any given length of time is not their greatest strength. They’re really good at what they do, but we’ve got to keep them focused and heading in the straight direction.

There’s a couple of little things that do that. Number one is verify full kit. Make sure you have to be relentless with them and following them up and making sure that they’re starting and finishing.

Key Two: Manage the Dip in the Middle

The best two times when we’re chasing a goal or we’ve got a little milestone to hit or whatever, we’re highly motivated at the start of it and we’re highly motivated near the finish of it. But we dip in the middle and that’s the point where we fail.

That’s why these small Takt times, these small Takt wagons, those two to three days, busting it into those small two to three-day chunks, we’re actually setting these guys and girls up to win by giving them small chunks where they can start. The motivation dip is minimized and then they’ve got that motivation to finish it off again. The more that we get them in the pattern start, finish, start, finish, start, finish the more we mitigate that risk out in the field of the changes.

Key Three: Stop Keeping People Busy

Keeping people busy is not what we’re trying to achieve and we’ve become obsessed with keeping everyone busy. The system works the best when it’s at 80%. And this is a really bitter pill for a lot of people to swallow. You don’t want to be going as fast as possible. You want everyone to be moving at the same speed.

We have an obsession with speed. If we had the same obsession with flow that we do with speed, we’d deliver all of our projects no dramas at all.

Here are the signs you’re creating unnecessary changes:

• Changes come from people who can’t see the big picture or the global optimum
• Changes are “nice to have” instead of “must have to hit the milestone”
• Changes come from local optimization instead of global optimization
• Changes don’t serve the goal they serve someone’s ego or preference
• Changes create variation and chaos instead of flow and predictability

If you see these signs, stop. Ask: “Does this change serve the global optimum? Does it help us hit the milestone? Or is it just nice to have?” If it’s nice to have, don’t make the change.

The 80% Principle

The 80% principle shows up everywhere. Dr. Alan Barnard, who trained under Dr. Eli Goldratt, speaks to it from a theory of constraints perspective. 80% is the benchmark. You look at it how many times do we go out and have a meal out at a restaurant or something like that and we eat everything that’s on our plate because that’s what we’re told to do as kids? Eat what’s on your plate. And we don’t need all of it. Stop when you’re full.

When you eat more, when you eat your whole plate, you overburden your stomach and your system. And it’s back to that old speed and push thing. If your project needs superintendent coaching, project support, or leadership development, Elevate Construction can help your field teams stabilize, schedule, and flow.

Relentless on the Environment, Not on the People

Here’s what being relentless means. 10% of what we do is value-added activity. 90% of it’s non-value-added activity. We want to be relentless on removing this as much as we can, which is part of managing that dip. We’re losing time, effort, energy, people’s skills in that dip. So managing that dip is one part of pushing the non-value-added activity down and the value-added activity going up.

If you turn 10% into 20%, you double your throughput, whether you call it velocity or speed or productivity. There’s a guy, a fellow called Ari Meisel. He splits it up three ways. He said productivity means you do more, efficiency means you do more with less, and effectiveness means you do more of what works.

You can be highly productive and highly efficient at creating waste and wasting people’s time, attention, abilities. You can’t be when we’re effective, it means we’re doing more of what works. When we do more of what works, that pulls that non-value-added line down. We go from 10% to 20% to 30%.

So we need to be relentless in keeping everyone on track. Jim Collins’ flywheel effect we teach people to see waste. We get them to stop and fix it. We get some lessons learned and we share them around and we keep that spinning. We need to be relentless about keeping that flywheel spinning. That drives value-added activity up and non-value-added activity down.

And it may not sound like it, but it slows the changes because the changes sit in this bucket of non-value-added activity. Like the ones I was talking about with that piping job that would have just been non-value-added activity. The effect that that would have had on the overall system? Negligible. Not worth it. Two or three days of production would have blown away any improvements to that system.

So we must be relentless in giving people the big picture so they can see where we need to head. So instead of them looking in all different directions, we got them all going in one way. And when we do that, everyone’s quicker. Relentless is not about push. It’s relentless on making the environment better for our people.

A Challenge for Leaders

Here’s what I want you to do this week. Look at your project changes. Are they serving the global optimum? Are they helping you reach the goal and create flow? Or are they nice-to-haves that don’t really need to happen?

Get everyone on the same page with visual planning. Use the Takt plan so everyone can see where you’re heading. Verify full kit before starting. Manage the dip in the middle with small Takt times. And stop obsessing with keeping people busy. Obsess with flow instead. As Beanie says , visual planning is the key to stopping project changes. Give people the big picture. Get everyone rowing in the same direction. And be relentless on making the environment better for your people.

On we go.

Frequently Asked Questions

How does theory of constraints relate to project changes?

Theory of constraints teaches that changes must serve the global optimum and help reach the goal. If a change optimizes one local area but doesn’t improve the whole system, it’s waste. Changes should only happen if they improve flow and help hit the milestone, not just make one area “nicer.”

Why is visual planning the key to stopping project changes?

Because when people can see the big picture and know where everyone’s heading, they stop making changes that don’t serve the goal. Visual planning gives everyone one page to look at instead of an 80-page schedule. That gets everyone rowing in the same direction and reduces variation.

What does “verify full kit” mean?

Do not start a job unless you can finish it. Before starting work, verify that you have all the materials, information, equipment, access, and resources needed to complete the work. Don’t start 10 minutes on one job, then jump to another. Start, finish, start, finish. That’s the rhythm.

What is the “dip in the middle” and how do you manage it?

People are highly motivated at the start of a task and near the finish. But they dip in the middle and that’s where they fail. Manage the dip by using small Takt times two to three days so the motivation dip is minimized. Start, finish, start, finish. Keep the rhythm going.

Why does the system work best at 80%?

Because you don’t want to be going as fast as possible. You want everyone moving at the same speed. When you push to 100%, you overburden the system. At 80%, you have slack for variation, buffer for problems, and flow instead of chaos. Dr. Eli Goldratt’s theory of constraints says 80% is the benchmark.