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DesigningIntelligentConstructionProjects

MichaelFrahm Aalen,Germany

CarolaRoll Passau,Germany

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Contents

Preface xi

Acknowledgements xv

AbouttheAuthors xvii

1Complexity,Cybernetics,andDynamics 1

1.1Complexity 2

1.1.1ComplexityintheMathematicalSciences 2

1.1.2ComplexityinSociology 3

1.1.3ComplexityinManagement 3

1.1.4ComplexityinConstructionManagement 6

1.1.5HowtoCopewithComplexity 7

1.1.6InteractionandAutopoiesis 9

1.2ViableSystemModel 10

1.2.1TheStaticPerspectiveontheVSM 11

1.2.1.1System1:Operation 14

1.2.1.2System2:Coordination 14

1.2.1.3System3:OperationalManagement 14

1.2.1.4System3*:Monitoring/Audit 15

1.2.1.5System4:StrategicManagement 15

1.2.1.6System5:Policy 15

1.2.2Ashby’sVariety 16

1.2.2.1TheVarietyNumber 18

1.2.2.2TheDegreeofVariety 18

1.2.3TheDynamicPerspectiveontheVSM 23

1.2.3.1VarietyBalance1:Workload 26

1.2.3.2VarietyBalance2:LineBalancing 26

1.2.3.3VarietyBalance3:Autonomyvs.Cohesion 26

1.2.3.4VarietyBalance4:ChangeRate 27

1.2.3.5VarietyBalance5:Changevs.StatusQuo 27

1.3ModellingwiththeViableSystemModel 28

1.3.1ModellingSteps 28

1.3.2CreateaVSMModelUsinganExample 29

1.4SystemDynamics 34

1.4.1SystemicArchetypes 34

1.4.2ModellingwithSystemDynamics 43

1.4.3Example:ManagingRiskswithSystemDynamics 43

1.5Findings,Criticism,andReflectiveQuestions 44

1.5.1Findings 44

1.5.2Criticism 45

1.5.3ReflectiveQuestions 46

2LeanManagementandLeanConstruction 47

2.1PioneersofLeanManagement 48

2.2ToyotaProductionSystemandTools 49

2.2.1Waste,Kanban,andJust-in-timePrinciple 51

2.2.2JidokaandRelatedElements 54

2.2.3Heijunka 58

2.2.4SingleMinuteExchangeofDie(SMED) 60

2.2.5KaizenandStandards 60

2.3LeanManagementandItsPrinciples 61

2.3.1ResourceandFlowEfficiency 63

2.3.2ExamplesforResourceandFlowEfficiency 64

2.3.2.1TheMachineandPlantManufacturer 64

2.3.2.2TheVacationFlight 65

2.3.2.3TheHealthcareSystem 65

2.3.2.4TheAutomotiveIndustry 65

2.3.3FourImportantPrinciples 65

2.3.3.1FlowPrinciple 66

2.3.3.2TaktPrinciple 66

2.3.3.3PullPrinciple 66

2.3.3.4Zero-defectPrinciple 66

2.3.4LeanLeadership 66

2.3.4.1Excursion:Kata 67

2.4LeanConstructionandTools 70

2.4.1LastPlannerSystem 72

2.4.1.1MilestonePlanning 74

2.4.1.2CollaborativeProgramming 74

2.4.1.3MakingReady 74

2.4.1.4ProductionPlanning 74

2.4.1.5ProductionManagementandLearning 74

2.4.2TaktPlanningandControl 76

2.4.2.1TaktPlanning 77

2.4.2.2TaktControl 78

2.4.3LastPlannerSystemandTaktPlanningandControl 78

2.4.4LeanConstructionCaseStudy 80

2.4.4.1TaktPlanning 81

2.4.4.2TaktControl 85

2.5Tools,Tools,Tools 87

2.5.1First-runStudy 88

2.5.1.1PhasePlan 88

2.5.1.2PhaseDo 88

2.5.1.3PhaseStudy 89

2.5.1.4PhaseAdjust 89

2.5.2WasteWalks 89

2.5.2.15Whyand6WQuestioningTechnique 90

2.5.3IshikawaDiagram 91

2.5.4A3MethodandReport 92

2.5.5VisualManagement 94

2.5.65S/5A 96

2.5.6.1Seiri–Sort 96

2.5.6.2Seiton–SetinOrder 96

2.5.6.3Seiso–Shine 97

2.5.6.4Seiketsu–Standardise 97

2.5.6.5Shitsuke–Sustain 97

2.5.7Plus/DeltaReview 97

2.5.8BigRoom 99

2.6PracticeInsightsfromMartinJäntschke 101

2.6.1InfrastructureRailway–IntroductionofLeanConstructioninLarge Projects 101

2.6.2ImplementingChangeinanInfrastructureOrganisation 104

2.6.3Conclusion 108

2.6.3.1ToSection2.6.1 108

2.6.3.2ToSection2.6.2 109

2.7Findings,Criticism,andReflectiveQuestions 109

2.7.1Findings 109

2.7.2Criticism 110

2.7.3ReflectiveQuestions 112

3CyberneticsandLean 113

3.1VSMandLean(Construction)Thinking 115

3.2MappingtheViableSystemModelwithLeanConstruction Methods 116

3.2.1MappingVSMandtheLastPlannerSystem 117

3.2.2MappingVSMandTaktPlanningandControl 118

3.2.3MappingInformationChannelsandLeanConstruction 118

3.3MappingtheViableSystemModelwithLeanManagement Methods 119

3.4PerformanceMeasurement 124

3.4.1GeneralMeasurement 124

3.4.2LeanMeasurementConstruction 126

3.4.3Beers’Triple 126

3.5CaseStudiesandPracticeInsights 128

3.5.1CaseStudy:PlanningProject 128

3.5.2CaseStudy:MajorProject(PlanningandExecution) 130

3.5.2.1DesignPhaseandApprovalPhase 131

3.5.2.2TenderingandAwardingPhase 132

3.5.2.3ConstructionPhase 133

3.5.3CaseStudy:Megaproject(Execution) 134

3.5.3.1BoundaryConditions 134

3.5.3.2AnalysisoftheMegaproject 140

3.5.3.3SectionAnalysis 140

3.5.4PracticeInsightsfromaMedium-sizedMechanicalEngineering Company 143

3.5.4.1ChallengesfortheIndustry 143

3.5.4.2TheSolution:TheCreationofaHybridCorporateFormBasedonthe VSM 144

3.5.4.3FromTheorytoPractice:TheOrganisationalStructure 146

3.5.4.4LevelsofComplexity 147

3.5.4.5ProcessOrganisation 149

3.5.4.6RoleProfiles 154

3.5.4.7OrganiplasticasaBasefortheManagementCockpit 154

3.5.4.8Conclusion 157

3.5.4.9Adaptability 159

3.6Findings,Criticism,andReflectiveQuestions 159

3.6.1Findings 159

3.6.2Criticism 161

3.6.3CriticalReflectiontoPracticeInsightsfromaMedium-sized MechanicalEngineeringCompany 161

3.6.4ReflectiveQuestions 162

4BeyondCyberneticsandLean 163

4.1Control,Regulate,Steer 164

4.2Self-organisation 165

4.3Viable,Lean, … andWhatAboutAgile? 166

4.4DigitalTransformation 167

4.5PhasesofDigitalChange 169

4.6DigitalisationintheConstructionIndustry 170

4.6.1StatusQuo 171

4.6.2Phase1:BIM,VR,AR,MR 172

4.6.3Phase2:IntelligentProjectManagement 174

4.6.4Phase3:ArtificialIntelligenceinConstruction 176

4.6.5Phase4:AutonomousProjectManagement 179

4.7ChangingtheGame 180

4.7.1NudgeManagement 180

4.7.2TitforTat 181

4.8Partnering 183

4.9SuccessPatternsinProjects 186

4.10Findings,Criticism,andReflectiveQuestions 190

4.10.1Findings 190

4.10.2Criticism 191

4.10.3ReflectiveQuestions 193

5SummaryandClosingRemarks 195

5.1Complexity,Cybernetics,andDynamics 196

5.2LeanManagementandLeanConstruction 196

5.3CyberneticandLean 197

5.4BeyondCyberneticandLean 197

References 199

Glossary 209

ListofFigures 215

ListofTables 219

ListofEquations 221

ListofAbbreviations 223

Index 227

Preface

Intelligenceistheabilitytoadapttochange.

StephenHawking

Whyabookwithafocusonmanagementcybernetics,leanmanagement,anddigitalisation?

Becausecybernetics,asamixtureofthenaturalsciencesandthehumanities, teachesaholisticanduniversalunderstandingofthecontrolandregulationof machines,livingorganisms,andsocialsystems.Exactlytherightthingforpeople whodaretothinkoutsidethebox.Becauseleanmanagement–whichemergedin

postwarJapan,acountrythathadtorelearnindustrialproductioninthefaceof hugeunemployment,alackofspace,andbeingrestrictedbybeinganarchipelago ofmanyislands–broughtacommon-senseapproachtoindustry,movingcompaniesawayfromsluggishorunhealthypracticesandconflictbehaviourtowards anattitudeoftrustandcooperationthatfocusedontheproductandthecustomer oncemore.

Becausedigitalisationisagreatopportunityandthefoundersofcybernetics foresawthetechnicalpossibilitiesofcontrolandregulationregardingfeedback andautomation.

Inadditiontothesechanges,thecombinationofthesetopicsoffersincredible potentialintermsofnetworking,enhancement,andfeedback.Theauthorswould liketomentionherethatthemainpurposeofthisbookistoshowtheinterconnectionbetweenthesedisciplines.Methodsandconceptsaredescribedconcisely. Butwhatisanintelligentconstructionprojectorganisationforus?Inour understanding,constructionprojectorganisationsarenotonlyconstructionsites andconstructioncompaniesbutalsoengineeringofficesandclientorganisations, aswellasotherparticipantsintheproductionofplanningandconstruction processesthathaveaninfluenceandmustbeconsidered.Inouropinion,itis importanttoseetheentireproductionsystemanditsalignmentandcoupling internallyandexternallyforasuccessfulimplementation.

Forus,‘intelligent’standsforadaptabilityandrobustnessinordertoproduce productstothebestpossibleextent,createdaccordingtologicalandsensibleprocessesandmeetingtheexactcustomerrequirement.‘Intelligent’alsostandsfor low-wasteprocessesthatpromotetheapplicationofnewtechnologiestoreduce wasteandputthecooperativecollaborationintheforeground.Everyoneknows (evenifnoteveryonepractisesthis)thatthebestwaytoworkiscooperatively,that iswithabitofgiveandtake.‘Intelligent’forusalsomeansthatwecreateproductionsystemsinwhichitisfuntowork,inwhichthereisaworkingcultureof motivation.Weareconvincedthatthisismoreintelligentthanthe70-hourweek.

Inaddition,‘intelligent’forusmeanstheresponsibleandsustainableuseof resources,aswellastheuseoftechnicalanddigitalsystemstorelievethehuman workforceoftasksthatcanbedonebetterandmoreeconomicallybynonhuman solutions.

Thisbookdoesnotclaimtobeexhaustive.Rather,theauthorspresenttopicsthat theyconsiderrelevant.Thisbookisalsonotaresearchpaper,butwrittenforthe interesteduserwhowantstogettoknowandtryoutapproachesinthemselves andintheircombination.Accordingly,wehaveintentionallyavoidedscientific termswherepossible.Ouraimistomakethetextflow,tomakethebookanentertainingread,andsowehavechosenitslanguage,structure,andlengthwiththis verymuchinmind.Nevertheless,thebookcontainssometheorythathastobe relearnedandinternalisedbeforeitcanbeapplied.Andwithcomplexquestions

Preface xiii thereareusuallyno,orfew,simplesolutions.Therefore,thebookavoidspatent remedies.Practicalexamples,anecdotes,andquestionsforthoughtandreflection areofferedinstead.Andwedonotpretendtooffereveryanswer,aswehavealso aimedtobesuccinctratherthanexhaustive.

BothauthorsareGermanandsomuchoftheirenvironmentandexperienceis German.However,whilstthebookcontainsmanyexamplesfromGermanythere arealsoexamplesfromaroundtheworld.

Wehavedeliberatelyrefrainedfromanepicapproachtosystemtheoryandalso thescientificdiscourseaboutdefinitions,terms,andwhichapproachisultimately thebetteronebuthaveofcoursewrittenabouttopics,areas,andapproachesthat interestusandwithwhichweourselveshavegainedexperience.Whenthisbook talksaboutsystems,itgenerallyreferstoorganisationsinanentrepreneurialcontext.

DonellaMeadows,acclaimedauthorof TheLimitstoGrowth (Meadowsetal. 1972),andoneofthemostimportant‘systemsthinkers’ofherandourtime(Meadows2017),describesasystemfromelements,theirrelationships,andbehaviour, andfromitspurposeorfunction.Sheexplainsinagenerallyunderstandableway thatasystemis,forexample,asoccerteamwiththeelements:players,coaches,the field,andtheball,whoserelationshipsorconnectionsaretherulesofthegame, strategies,communicationoftheplayers,andthelawsofphysics,whosepurpose istowingames,playsports,ormakemoney.

Thisunderstandingofsystemsalsoappliestoothersystems,suchasacompany, acity,aneconomy,ananimal,atree,aforest,whichincludesthesubsystemstrees andanimals,theearth,thesolarsystem,aswellasthegalaxy.Conglomerateswithoutcertainconnectionsorfunctionsarenotsystems.

Today,noonecanavoidthedesign,analysis,andadaptationofsystems,organisations,andprocesses.Understandingthisisthekeytodealingintelligentlywith increasingcomplexity.

Acknowledgements

WewouldliketothankHamidRahebiformakingavailablehispreliminarywork, whichhepreparedasco-authorfortheGerman-languagebasisofthisbookand alsoforhissupportinthepresentexpandedEnglishversionofthisbook.We thankDeepL,andespeciallyMarcBeamentwhohelpeduswiththetranslation intoEnglish.

Anyremaining‘GermanEnglish’wehappilytaketheblamefor!

WethankWileyfortheirpatienceandsupportinthepreparationofthisbook, TimBettsworthforcopyeditingit,andPaulSayer,AmyOdum,andMikeNew. WealsothankMartinJäntschkeforhispracticalinsightsonimplementinglean managementinlargeorganisationalunitsworkingonlargeprojects.

Wethankallthosefromwhomwewereabletolearnandcontinuetolearn. Learningneverstops.

AbouttheAuthors

MichaelFrahm,born1979.EducatedinStuttgart,Kaiserlautern,Saarbrücken inengineeringandbusinesslaw.ManagementcoursesattheHECParis,HHL Leipzig,andNorthwesternUniversity.Fifteenyearsofprofessionalexperiencein megaconstructionprojectmanagement.Heisdirectorofthenonprofitassociation forSystemandComplexityinOrganisation(SCIO)forGermanyandaCertified AdvancedSystemPractitionerforthisorganisation.

CarolaRoll,bornin1978.EducatedinStraubingandKrems(Austria),intechnicalbusinessadministration,leanoperationsmanagement,andintegratedmanagementsystems.Over20yearsofprofessionalexperienceininterfacepositions betweenbusinessadministrationandtechnologyinvariousmedium-sizedcompanies.SheisdirectorofthenonprofitassociationforSystemandComplexityin Organisation(SCIO)forGermanyandheadofBavaria’srelatedpracticegroup.

Complexity,Cybernetics,andDynamics

TheToyotastyleisnottocreateresultsbyworkinghard.Itisasystemthat saysthereisnolimittopeople’screativity.Peopledon’tgotoToyotato‘work’ theygothereto‘think’.

TaiichiOhno

1Complexity,Cybernetics,andDynamics

Incontrasttoleanconstruction,cyberneticsorasystem-orientedapproachis relativelyunknownorunusedinconstruction.NorbertWiener,amathematics professorattheMassachusettsInstituteofTechnology(MIT),coinedtheterm ‘cybernetics’in1943.Atthetime,hewasleadinganinterdisciplinaryresearch projectandwasconfrontedwiththeproblemofcoordinationandcommunication betweendifferentexpertsanddisciplines.Thiswastheofficialbirthofanew scienceofcommunicationandregulation.HermannSchmidt,professorofcontrol engineeringinBerlin,isregardedasthefounderofcyberneticsinGermany.In additiontoWienerandSchmidt,otherhistoricalprotagonistssuchasHeinzvon Foerster,W.RossAshby,HumbertoMaturana,StaffordBeer,FredericVester,and manyothershavelentsignificantmeaningtotheterm‘cybernetics’.Meanwhile, cyberneticsisusedindifferentdisciplines.

AsdescribedbyChristophKeesein2016inhisbestseller TheSiliconValley Challenge,theunderstandingofcyberneticsandsystemscienceismorerelevant thanever.Itservesasanessentialmodelfordigitaltransformation.Cyberneticsis basedontheideathateverythingisconnectedtoeverything.It,therefore,encouragespeopletothinkoutofthebox–anessentialcharacteristicinanetworked worldinwhichgreatimportanceisaccordedtotheeffectiveconfrontationofcomplexityandchaos.

Wiener,hiscolleagues,andsuccessorswouldbedelightedbythepossibilitiesof today:digitalisation,theInternetofThings,andthechancetomodelandsimulatesystemswithenormouscomputingpowertomakemoreandsounderpredictions.Hereisanintroductiontocyberneticsandsystemsscience,whichwethink isessentialtogainanunderstandingofthepast,thepresent,andthefutureof (construction)organisations.

1.1Complexity

Theterm‘complexity’1 founditswayintothelanguageinthe1970sandhasbeen definedinanumberofwayssincethen.Therearedifferentapproachestoand viewsoncomplexity.Thisreflectsthesubjectivenatureofcomplexityandthatit dependsonthecontext,actors,andobservers.Thissectioncontainsexamplesof ‘complexity’fromvariousfields.

1.1.1ComplexityintheMathematicalSciences

Inmathematics,‘complexity’isdefinedbythenumberofelementsinthesystem andthevariabilityofthefeedback.Theterm‘complexity’isalsoassociatedwith nonlinearsystembehaviour.Nonlinearitydescribesasystem’ssensitivitytoeven

1Complexity:Latin complexum,participleperfectof complecti,‘toembrace’or‘tosummarise’.

theslightestchangesintheinitialconditions.Theso-calledbutterflyeffectgives colloquialmeaningtothisbehaviouralphenomenonandexplainsthat,theoretically,eventhemostminorchangesininitialconditions(e.g.thewingbeatofa butterfly)canhaveasignificantimpact(hurricane)ontheresults.Ingeotechnics, constructionmechanics,andstructuralanalysis,theconsiderationofthenonlinearityofsystembehaviourisofgreatimportance.Incomputerscience,‘complexity’standsbothforthecomputationaleffortrequiredtosolveaproblemandfor theinformationcontentofdata.

Therefore,‘complexity’inthebroadersensecanbeequatedwithcalculability andsystemsensitivity.

1.1.2ComplexityinSociology

Insociology,adistinctionismadebetweenfactual,social,temporal,operative,and cognitivecomplexity.‘Objectivecomplexity’describesthevarietyofdifferenttypes ofelementsthatcaninteractwitheachother.‘Socialcomplexity’describesthe interactionsandfeedbackswithinthesystem.Extendedbyatemporalcomponent, onespeaksof‘temporalcomplexity’.‘Operationalcomplexity’describesthefact thatthesystemsetsgoalsandthatthesystemitselfcanbringaboutchangesinthe state.Ifthereisapronounceddegreeofcontrollability,wespeakof‘operational complexity’.ForNiklasLuhmann,theauthoritativerepresentativeofsociological systemstheory,complexityisanobserver/observation-dependentfactandleadsto acompulsiontoselectinsystems(Luhmann1994).

1.1.3ComplexityinManagement

HansUlrich(UlrichandProbst1988;Ulrich2001),aformerprofessorofbusiness administrationattheUniversityofSt.Gallen,distinguishesbetween‘complicated’ and‘complexity’asfollows.Heassociatescomplicatedmorewiththecomposition ofasystem,whereascomplexitydescribestemporalvariabilitymore.

Heexpressesthisas:‘Complexityistheabilityofasystemtoassumealargenumberofdifferentstatesinshortperiodsoftime.Machinesarenon-trivialsystems whosebehaviourispredeterminedandpredictable.Ecologicalandsocialsystems arecomplex,“non-trivial”systemswhosebehaviouratcertainpointsintimecannotbepredicted’(UlrichandProbst1988).

Asaruleofthumb,‘complexity’meansthatasystemhasmanyelements(E), relationships(R),andstates(S)thatchangeovertime(t),asshowninFigure1.1. Anextensiontothisis‘chaos’,whichdescribesastateofcompletedisorderand independentcausality.Muchmodernmanagementliteraturehasbeenbasedon Ulrich’sunderstanding.

FollowingtheacronymVUCAandCynefinFramework,whichhasasolid linktocomplexityinmanagementmatters,werepresentedbelowforabetter

(S)

Amount of system elements (E) simple systemcomplicated system complex system relatively complex system

Systemstates.

understanding.VUCA(Macketal.2016)ortheVUCAworldstandsfor:

● Volatility:e.g.frequentandrapidchangesintheenvironment

● Uncertainty:notpredictabilityofthefuture

● Complexity:manyunknownelementsexistinternallyandexternally

● Ambiguity:informationcanbeinterpretedindifferentways

Itcanbededucedfromthisthatmanagers’previouslytriedandtestedskills andabilitiesnolongerendureinthisnewworldandmustbereplacedbyadapted leadershipskillsthataremorestrategicallyorientedandbettersuitedtohandling complexity(Lawrence2013).

InresponsetotheVUCAworld,aVUCAacronymisagainused.Thisis:vision, understanding,clarity,andagility.

TheCynefinframework(seeFigure1.2)providesanadmiredapproachto reflectingcomplexityinasystemcontextbyDaveSnowden(SnowdenandBoone 2007),amanagementconsultantandresearcherfromWales. Cynefin istheWelsh wordfor‘habitat’andisintendedtoreflectthepointofviewoftheactoror observeronthecontext.

AccordingtoSnowden’sCynefinframework,asystemwillbeclassifiedbetween (SnowdenandBoone2007):

● simple

● complicated

● complex

● chaotic

● anddisordered/confuse.

Figure1.1

Figure1.2 Cyneﬁn framework.

Foreachofthesecategories,apatternofactionisproposed.Theseare:

● Simplesystem: Asimplesystemcanbeunderstoodwithoutfurtheranalysis andatthefirstattempt.Causeandeffectarecleartoallparticipants.

Thepatternofaction:perceiving,categorising,andreactingisrecommended. Theexistingfactsaretobeanalysed,categorisedfurther,andthenimplemented accordinglywithasuitableprocedure.

Typicalforthisaretasksthatcanbeimplementedusingpredefinedprocesses. Thisprocedureiscalled‘bestpractice’.

● Complicatedsystem: Acomplicatedsystemischaracterisedbymany cause-and-effectrelationships.Causeandeffectarenolongerimmediately comprehensible.Acomplicatedsystemrequiresspecificexpertiseandtimeto understandtheelementsinthesystem.

Thepatternofaction:perceive,analyse,andreactisrecommended.Thismeans that,analogoustothesimplesystem,factsaretobeexplored,informationisto beobtained,andexpertknowledgeistobeusedonthisbasis.

‘Goodpractice’isrecommendedasthecorrectprocedure.Thismeansthatthere arevariousaccuratesolutions.

● Complexsystem: Inacomplexsystem,thecause-and-effectrelationshipcan onlybeunderstoodafterdetailedanalysisandretrospectively.

Thepatternofactionis:try,perceive,andreact.

‘Emergentpractice’isrecommended.Thismeansthatadiverseapproach isrecommended,whichconsidersamixtureofmethods,workingwith cross-functionalteams,andexperimentation.

● Chaoticsystem: Inachaoticsystem,itisnotpredictablehowsmallchangesin theinitialconditionswillaffectthesystem’sbehaviourinthelongrun.

Thepatternofactionact,perceive,andreactisrecommended.

Forthechaoticsystem,Snowdenadvisestheuseofjustahandfulofauthorisedpeopletoacttoachieveanimmediateeffectandstabilisethesystemand

Table1.1 Cyneﬁnframework(PDCA).

PDCAcircle PlanDoCheckAct

SimplesystemsSenseCategorise—Respond Complicated systems SenseAnalyse—Respond Complex systems —ProbeSenseRespond

Chaoticsystems—ActSenseRespond

manoeuvreitintoanothersystemstate.Hecallsthis‘novelpractice’(Snowden andBoone2007).

● Disordered/Confusedsystem: Thesystemcannotbeclassifiedbytheactoror observerinconfusion.Inthiscase,thetaskcanbebrokendownintosmaller tasks,forexample.

Inthecaseofdisorientation,thesystemcannotbeclassifiedbytheassessor.In suchsituations,peopleoftenwithdrawtotheircomfortzonewithoutassessment andmakedecisionsbasedsolelyontheirownexperience.Thisisnotnecessarilywrong.Referringto‘intuition’andtheresearcherGerdGigerenzer’s(2008) researchresults,weseethatintuitioncanalsooftenleadtogoodandquickdecisionsincomplexandchaoticsituations.

Ingeneral,theCynefinframeworksupportssystemunderstandingandclassificationandprovidesarecommendationforacting.

MappingoftheCynefinframeworkwiththeDemingcircle2 (Plan,Do,Check, andAct)isshowninTable1.1.

1.1.4ComplexityinConstructionManagement

Patzak(2009)andIPMA(2016)provideacomplementaryapproachfortheclassificationandpartlyalsoformeasuringcomplexityinprojectmanagement.The procedureproposedbyPatzakiscumulativeandusesascoringtableandincludes thefollowingareastobescored:

● projectgoal

● projectsubject

2TheDemingcircle,orPDCAcircle,describesaniterativefour-phaseprocessforlearningand improvementdevisedbyWalterAndrewShewhart,aUSphysicist.Theoriginsoftheprocesslie inqualityassurance(Deming1986).

● projecttask

● projectexecutors

● projectenvironment.

Thecomplexityofthebuildingindustryisdeterminedbyitsinstitutionsand actors.Manyparticipantsattheadministrativeandoperationallevelmakefor agreatdealofcomplexity.Thisisintensifiedbyahighcostandtimepressure. Dirnberger(2008)notesthatcomplexityarisesattheinterfacessinceevensmall constructionprojectstodayinvolvemorethan100participants.

Schwerdtner(2007)distinguishesbetweenorganisationalandtechnicalcomplexityandtakesintoaccounttheuniquenatureofconstructionprojects.‘Technicalcomplexity’referstothebuildingstructures,and‘organisationalcomplexity’ relatestothesystemstheycreateandoperate.

Hoffmann2017distinguishesbetween:

● thecomplexityofthebuilding(object)

● thecomplexityoftheprocesses(project)

● thecomplexityoftherelationshipstructure(behaviour).

Inthecaseofthelongterm(10yearsormore),changesinstandardsandthelegal situationarealsorelevant.Also,thegrowingcriticalinterestforaprojectincreases itscomplexity.Just-in-timeplanning,lifecycleorientation,thedecreasinglevel oftrainedsitepersonnel,conflictingimplementationcultures,competitiveconstraints,andthefactthatconstructionisoftenstartedonagreenfieldsiteareall factorsthatincreaseaproject’scomplexity.

Forthepurposesofclassification,specificallyforconstructionprojectmanagement,complementaryapproachesweredevelopedbyLechner(2015)andespeciallybyHoffmann(2017).

1.1.5HowtoCopewithComplexity

Inthecontextofcomplexity,understandingwhatitisandwhatapproachescan beimplementedisessential.Specificapproachesaresuitableasalreadydescribed, e.g.withtheCynefinmodel.

AccordingtoDietrichDörner(2012),thefollowingarecommonmistakesin dealingwithcomplexity.

● Firsterror:Wrongtargetdescription.Individualobjectivesareworkedonand theoverallsystemanditseffectsaredisregarded.

● Seconderror:Nonetworkedanalysis.Noorderprinciplesarecreatedtoevaluate dataorlargeamountsofdata,e.g.usingfeedbackloops.

● Thirderror:Wrongemphasis.Oneconcentrates,e.g.onlyononepathological focus;otherproblemsaredisregarded.

● Fourtherror:Sideeffectsareignored.Oneworkssingle-mindedlyonaproblem withoutcaringaboutthesideeffects.

● Fiftherror:Tendencytooverride.Ifsmallinterventionsshownoeffectincases ofmaladministration,asystemisheavilyintervenedin.Ifthereisatimedelay inaccumulatingunexpectedresults,theoverrideiscompletelystopped.

● Sixtherror:Thetendencytoauthoritarianbehaviour.Whoeverhasthepowerin thesystemthinkstheyhaveseenthroughit.Thiscanbefatalifyouthinkyou areincontrol.Itismoreimportanttoactivateself-regulationinthesystem.

JurgenAppelo(2010),developeroftheManagement3.0approach,recommends thefollowing:

● Addresscomplexitywithcomplexity(seealsoAshby’sVarietyinSection1.2.2).

● Useadiversityofmodels.

● Assumedependenceoncontext.

● Assumesubjectivityandcoevolution.

● Anticipate,adapt,andexplore.

● Developmodelsincollaboration.

● Copyandchange.

Thefollowingheuristicsarealsothefirstguidelinesindealingwithcomplexity:

● Takethebest:Usingexclusionstrategy–excludeirrelevantinformation.

● Titfortat/titfortwotat:Usingcooperationstrategy–reductionofcomplexity (disturbances)throughconflicts(seealsoChapter4,Section4.7.2).

● Simpleframe:Throughaframeworkstrategy(e.g.10commandments),means face/select/ignorecomplexitythroughthedefinitionofasimpleframework.

● Paretostrategy:UsingtheParetoprinciple(80/20)tocountercomplexity througheffortandbenefit.

Forconstructionmanagement,thekpbm® heuristicofFrahm(2015)canbe takenintoaccount.Itconcentratesonthefollowingsystemcharacteristicsto buildarobustsystembehaviourforconstructionendeavours.

● Viability: Viabilityistobeunderstoodintheentrepreneurialsense.This means:

⚬ Adaptabilitytochange.

⚬ Abilitytoinfluenceandshapetheenvironment.

⚬ Abilitytoopenupnewenvironments.

⚬ Abilitytomakeapositivecontributiontobigpicturedelivery.

Viabilityexpressesthatconstructionprojectsshouldbedesignedsothat thereissufficientcapacitytofunctioneffectivelyasanorganisation internallyandwithitsenvironmentexternally.

● Attenuationandamplifying: Interrelationshipscometotheforebyattenuationandamplifying.See,forexample,Section1.2.2.

● Bottleneckconcentrationandflexibility: Keyelementsintheplanningand constructionprocessareresources.Bottlenecksinthisrespectmustbeidentified andovercome.Furthermore,appropriatebuffershavetobeconsidered.

● Cooperation: Cooperationisthesuperiorstrategyforachievingsomething togetherandachievingthebestforeveryoneinvolved.

Afteralltheseexplanations,itisclearthatdealingwithcomplexityisnotaneasy task.UmbertoEco(1988)writesinhisnovel Foucault’sPendulum somethingofa metaphor:‘Foreverycomplexproblem,thereisasimplesolution,anditiswrong.’ Oftentherearenosimplerulestocopewithcomplexity.Asaruleofthumb,one cansay,themorecomplexthesituationis,thegreaterthemixofpeople,disciplines,andmethodsisneeded.

1.1.6InteractionandAutopoiesis

Interactionsareessentialelementsinsystems.TheChileanbiologistsandneuroscientistsHumbertoMaturanaandFranciscoVarela(1992)presenttheconceptof structuralcouplingtoabroadpublicintheirbook TreeofKnowledge.Structural couplingoccursininteractions,whichmeansthestructurechangestheenvironmentevolutionarily,andviceversa.

Therearemanypossibilitiesfordesign,andthemoreaccurateaproject becomes,themoresupportingandhinderingforcesarereleased.Withinthe frameworkofthisdesignprocess,astructuralcouplingmusttakeplace.The managementofaprojectrequiresastableprojectenvironment.Avitalfoundation stoneislaidinthedesignprocess.

Themanagementofconstructionprojectshappensmainlyinthebeginningand withlarge-scaleprojectsisoftenmoreasocialprocessthantheimplementation ofatechnicalproject.Thoseresponsibleandownersquicklyrealisethattechnologicalandeconomicprofessionalismaloneisnotenough.Theformationof coalitions,politicalconnections,andpublicperceptionareessentialareasinthe process.

Thetaskofformingprojectsbeforetheycanbeplanned,built,andoperatedon canbeanextraordinarilydisorganisedandcomplexprocess.Thisisexpressedby theprocessofcoordinationanddesignthattakesmanyyearsordecadeswiththe slowandchallengingconsensusbuilding.Throughmanysmallsteps,theintegrationofthesystemintotheenvironmenttakesplace.Manyindependentquestions cannotbesolvedsimultaneously.Issuesthathavealreadybeensolvedanddefined areoftenrestartedthroughlongdesignprocesses,forexamplewhenmarginal conditionsandpoliticalpowerrelationschange,evenifthesehavealreadybeen formallydecided.

1Complexity,Cybernetics,andDynamics

ThisevolutionarymechanismreflectstheDarwinianprinciplefrom1859ofthe interactionbetweenvariation(specialisation)andselection(adequacyofthemost suitable),whichisstillvalidtoday(Darwin1859).Therelationshipiscoupled whenrecursiveinteractionshavereachedstability,andfurtherchangescontinue forthelongrunco-evolutionarilyandinthesamedirection.

Withthelookatstructuralcoupling,youcanansweroperationalandstrategic questionsforyourorganisationandyourprojectalike,whataspecificrelation does,whereittakesyou,whatidentitycanbecreatedoutofthis,andhowcanyou buildstability?

MaturanaandVarelaalsoestablishedtheconceptof autopoiesis (ancient Greekfor‘self-creation’).Autopoiesisdescribessystemsthatrefertothemselves, andcreateandmaintainthemselvesoutofthemselves.Thebasisoftheir self-organisationisalwaysdirectedtowardsastateofequilibriumandthus towardsself-preservation.Whenaformofstabilityisreached,thesystemis structurallycoupled.Thiscanberepeatedmanytimes.

Anexampleofanautopoieticsystemapproachistheviablesystemmodel (VSM).

1.2ViableSystemModel

TheConant–Ashbytheorem(ConantandAshby1970;Conway2021),alsoknown astheGoodRegulator,means:

Everygoodregulatorofasystemmustbeamodelofthatsystem.

Thismeansthatthemanagementofanorganisationcanonlybeasgoodasthe modelonwhichitisbased.Conway’slawgivestheConant-Ashbytheorempracticalmeaning.MelvinConway,anAmericancomputerscientist,wasmadepublic in1986andbecamemorewidelyknownindigitaltransformationandtheimplementationofsoftwareprojects.Itreads:

Organizationswhichdesignsystems … areconstrainedtoproducedesigns whicharecopiesofthecommunicationstructuresoftheseorganizations.

Thismeansthat,inthecaseofinsufficientcommunicationbetweendepartments,defectsintheproductmanifestthemselvesexactlywheretheinterfacesdo notwork.Productsare,therefore,resultsofthecommunicationstructuresoftheir organisationsandthustheresultsoftheunderlyingmodels.AHarvardstudyconfirmedConway’slaw(MacCormacketal.2008).Tomapthebehaviourofsystems inanorganisationalcontext,asuitablemodelisrecommended.

1.2ViableSystemModel 11

Asdescribedalready,constructionprojectsareusuallycomplexprojects. Tocounter‘complexity’and‘chaos’intheentrepreneurialcontextandcreate stability,managementcyberneticswasdevelopedbyStaffordBeer(1979,1995), aprofessorofbusinessadministrationandoperationsresearchattheBusiness SchoolofManchester.Hetransferredcyberneticsapproachestocompaniesand thebusinessworldgenerally.

Beer’smostwell-knownapplicationistheVSM.Asanalternativetoahierarchicalorganisationstructure,Beerorientedthedevelopmentofthemodelonthe successfulmodelofevolutionintermsofviability:‘thecentralnervoussystemof mammals’.TheVSMattemptstobalanceandorderthesystemandprovidesafractal(seeFigure1.3)orself-similarstructure.Thismeansthat,ontheonehand,a balancebetweencontrolandautonomyinanorganisationisstrivenfor.Onthe otherhand,afractalstructureatallorganisationallevelsexists.

Thesameorsimilargenericorganisationalcodecandealwithcomplexityand chaosinarelativelysimplewayandhelpcreateorder.TheVSMservesasabasic structureorasamapwithwhichonecanorientateoneself.

Theruleis:

Thepurposeofthesystemiswhatitdoes–keyword POSIWID

Thismeansthatproductionisthereasontheorganisationexists.Theorganisationmustfollowtheproductionprocess.Astheorganisationcanexistoutofmore thanoneviablesystem,therecanbemorethanonepurpose.

1.2.1TheStaticPerspectiveontheVSM

ThestaticperspectiveoftheVSMisaboutanalysingexistingsystemswiththehelp ofit.

Thus,inadditiontotheviabilityofasystem,anyexistingproblemsinthecorporatestructureandthestructuralandproceduralorganisationcanbeexamined.

Thegoalofthisistoidentifycyberneticapproachesandmissingelementsabout cybernetics(aswithachecklist),ifpresent,andusethemasabasisfortheconceptualdesignofanoptimisedsystem.

Thishastheadvantagethatthereisnoneedtoworryaboutforgettinganything.

TheideaofmakingtheVSMequallyusefulasadiagnostictoolgoesbacktoits creator,StaffordBeer,whoinhis1985book DiagnosingtheSystemforOrganizations providesthereadernotonlywithadescriptionbutalsowithaworkbookin thebestsensewithconcreteworkinginstructions.Atthesametime,Beerisaware thatthisapproachanditspresentationareentirelynew(Beer1985).Inhischapter ‘ACyberneticMethodtoStudyOrganizations’,RaulEspejoexplicitlyemphasises

6 Group

5 Ressort

R 4 Division

R 3 Department R 2 Team R 1 Employee

Figure1.3 Thefractalstructure. thattheVSM,althoughperceivedmainlyasadiagnostictool,alsoopensupother possibilities(Espejo1989).

TheVSMconsistsofsixhorizontalsystemlevels(seeFigure1.4): System1Operation System2Coordination

Figure1.4 Theviablesystemmodel.

System3ControlandCohesion/OperationalManagement(insideandnow)

System3*AuditandMonitoring

System4Intelligence/StrategicManagement(outsideandthen)

System5Policy/NormativeManagement

andsixverticalinformationchannels:

Channel1InterventionandRegulate

Channel2AllocationofResources

Channel3OperationalInterrelationships

Channel4InterrelationshipsoftheEnvironment

1Complexity,Cybernetics,andDynamics

Channel5Coordination(Sympathicus) = System2

Channel6Monitoring(Parasympathicus) = System3*

Furthermore,theVSMincludesanalgedonicchannelandtransducers.Algedonicsignalsarealarmsignalsthattransmiteitherpositiveornegativemessages directlyintosystem5.Transducersareconvertersthatformtheinterfacebetween thesubsystems.Theyensurethemaintenanceofinformationauthenticity.

1.2.1.1System1:Operation

System1(S1)consistsofthreeelements:

● environment

● operation

● management.

Thesethreeunitsbuildthe:

‘Systeminfocus’,inotherwordsthereasontheorganisationexists.

Inthissystem,allthemainactivitiesofanorganisationarecollected.Allthree elementsinteractwitheachother.Theentirecompanymustalwayspaygreat attentiontothissystemlevel.

ExamplesofanS1areproducingunitssuchasconstructionteams,construction companies,ordesigners.

ItmustbenotedherethatorganisationsmayconsistofseveralS1s.Theseusuallyrepresentstrategicbusinessunits,productlines,orsimilar.Whenmodelling aVSM,urgentattentionmustbepaidtotheviabilityoftheS1s.

1.2.1.2System2:Coordination

System2(S2)hastwotasks.Firstofall,itrepresentsacommunicationmedium betweenS1andS3throughastandardisedprocesses,acommonlanguage,andit coordinatesallS1systemswitheachother.Secondly,itistheinstitutionalplace whereself-organisationtakesplace.Ithasanactivating,orsympathetic,effect.

Examplesaredailyshortinformalmeetings,operationandproductionplansof anykind,scrum/Kanbanboards,projectcontrol,productionplanningandcontrol, sixsigma,thelastplannersystem,ortaktplanningandcontrol.

1.2.1.3System3:OperationalManagement

System3(S3)dealswiththepresentbusinessofsystems1–3andmustmakeall operationalactivitiesasefficientandeffectiveaspossible.Itallocatesresources anddemandsresults.S3competeswithS4forresourcesandreceivesnormative specificationsfromS5.

ExamplesforanS3instanceareproject,team,ordepartmentleader,oramanagingdirector.

1.2.1.4System3*:Monitoring/Audit

System3*(S3*)isareviewchannelwithaninstitutionalabsorbing,orparasympathetic,effect.

Anexampleofthissubsystemisaregularwalkbymanagementaroundthe constructionsite,havingconversationswiththeforemanandworkerstogetan additionalpictureoftheproductionprocessoraprojectauditwithanobjective viewfromtheoutsideintotheprojectprocess.Leantoolssuchas5Sauditsor generalistlayeredprocessauditscanalsobelocatedhere.

1.2.1.5System4:StrategicManagement

System4(S4)focusesonthestrategicissuesoftheoverallorganisationanddeals withfutureproblemsfromtheenvironment.ItcompeteswithS3forresources.

ExamplesofS4arestrategicpurchasingordevelopingnewbusinessareassuch asabuildinginformationmodelling(BIM)strategyfortheentirecompany.

1.2.1.6System5:Policy

System5(S5)representstheidentityoftheorganisation.Topicssuchasvalues, norms,ethics,andcultureareaddressedhereandtransferredintotheorganisation.Itisthehighestdecision-makingunit,makesfundamentalchoices,and,if necessary,regulatesbetweenS3andS4.

Examplesarecorporatevaluesandprinciples.Theseorganisationalprinciples arereflectedinallsubsystems.Thehighestdecision-makingunithereistheboard ofdirectors.Theverticalinformationchannelsare,accordingtoSteinerandJernej (2017):

● Channel1–InterventionandRegulate

ThesecentralprojectspecificationsmustbeknownfromS5toS1(e.g.project manual,constructioncontracts,engineeringcontracts,buildingpermits).

Question:Whatisexpected,andwhataretherules?

● Channel2–AllocationofResources

Thisinvolvesallocatingresources(e.g.personnelplanning,resourceplanning, contractualregulations).

Question:Whatisneeded?Inwhatwayaretheresourcesallocated?Andhow isthisallocationjustified?

● Channel3–OperationalInterrelationships

Thisisthechannelofinnerrelations,whichofteninformallyoccurbutcanbe essentialforpositivefunctioning(e.g.celebrations,rituals,orprivateacquaintances).Inotherwords,itisthecultureofhowtobuild.

Question:Whatcultureexistsbetweentheunits?

1Complexity,Cybernetics,andDynamics

● Channel4–Interrelationshipsofexternalandinternalenvironments Managementandproducingunitsareinterlinkedwithdifferentenvironments. Theseenvironmentsareconnectedindifferentwaysandinfluenceeachother. Theyarerelevantforthepresentandfuture(e.g.stakeholders,public,politics).

Question:Howdoenvironmentsaffecteachother,andwhataretheconsequencesforthesystem?

● Channel5–Coordination(Sympathicus) CommunicationofallS2systems.

Question:Howdocoordinationandcontroltakeplace?

● Channel6–Monitoring/Audit(Parasympathicus) CommunicationofallS3*systems.

Question:Whathappensinproduction?

AretheresultsreportedtoS3viachannel6congruentwiththecommunicated resultsfromS1viachannel2?

Theauthorsareawarethattheprecedingobservationsandexplanationscan onlyprovideabrief,albeitconcise,introductionwhenmeasuredagainstthedepth andcomplexityoftheVSM.Ifyouareinterestedinfurtherandverydetailedconsiderationsofthistopic,theauthorsrefertothethree-volume TheViabilityof Organizations byWolfgangLassl(2019/2020).

1.2.2Ashby’sVariety

TheVSMisthetheoreticalandpracticalapplicationofAshby’slaw.Therefore,an essentialbasisfordevelopingadeeperunderstandingoftheVSMistheknowledge andexperienceofAshby’slaw,respectivelyAshby’svarietytheoremorAshby’slaw ofrequisitevariety.Ashby’svarietytheoremmakesafundamentalcontributionto this,itsays:

Onlyvarietycandestroyvariety.

Or:

Onlyvarietycanabsorbvariety.

Figure1.5showsthistheoremtransferredtothemanagementparadigm. Thevarietyoftheenvironment(V e )farexceedsthatofthemanagement(V m ) (seeEq.(1.1)).Forconstructionprojects,itcanbeconcludedthattheenvironmentalvariety(V e )isgenerallymoresignificantthanthebehaviouralrepertoire ofconstructionmanagement.

Figure1.5 Varieties1.

Ashby(1985)usesthevarietyasameasureofcomplexityanduseshisvariety theorem,whichrepresentsthevarietyofconsequences(V c ),asthequotientofthe varietyofdisruption(V d )andthevarietyofsystemcontrol(V r )(seeFigure1.6).If thisequationisinequilibrium,thenthereisstability(seeEq.(1.2)).Ifthevariety ofconsequences(V c )islargerormuchlargerthenwehaveultra-stabilityandthe systemcancompensatechangeswithoutcrisis(seeEq.(1.3)).

Vc ≥ Vd Vr stable(1.2)

Vc > Vd Vr ultrastable(1.3)

Asystemcollapseswhenthedisturbancesaresignificantlymoremeaningful thanthesystemreactions.Thevarietytheoremthenbecomesunstable(see Eq.(1.4)).

Vc < Vd Vr unstable(1.4)

amplifier symbolattenuator symbol

Figure1.6 Varieties2.