Unrealistic goal: To ensure customer focus throughout the construction process
Outcome 2012: 15% increase in A-customer satisfaction and zero errors in more than 50% of projects upon handover
Solution: Executable Strategy and Performance Management – MTHC 20-0-113
MTH Construction’s production had been decentrally managed for many years by seven independent division directors. During this period, MTH’s staff functions underwent system and competency development based on centralised process management. The result was strong production management at local level but with a lack of cross-organisational knowledge-sharing and synergies.
With the introduction of a centralised MTH Construction commercial department focused on relations with Denmark’s major national contractors, a need developed for cross-organisational coordination and execution following common norms.
This was amplified by several rounds of restructuring, which reduced the number of divisions from seven to three. The three remaining division directors were expected to build bridges across the former divisions, but with what? What was the common platform – the plan?
MTH Construction had conducted a series of customer interviews. Based on the knowledge collected through these interviews and with the involvement of the division directors and staff functions, they set out to define MTH Construction’s position/value proposition. The outcome was the vision: “Reliability from idea to ownership”.
The group decided that, by the end of 2013, MTH Construction should be able to guarantee zero errors or deficiencies, efficient building operations and no financial surprises. The group then received coaching to help them formulate the KPIs against which the guarantee would be benchmarked: 20% improvement in customer satisfaction among A-customers; 0 errors or deficiencies in all building projects upon handover – and savings via improved project management in the order of DKK 113 million.
All middle managers were introduced to the 20-0-113 concept and subsequently presented the vision to the company’s full staff. Posters in every office encouraged employees to ask their local managers for an explanation. Responsibility for the launch rested with the division directors, who were each assigned a cross-organisational results pathway (20-0-113).
The company also introduced results boards for all major projects, which were hung up on-site at the project manager’s shed. Each week, they followed up on the KPIs and actions – including those relating to 20-0-113. Project statuses were defined as green, yellow or red. Photos taken using cell phones ensured quick reporting to the division, where the photos were printed and posted as status red, yellow or green. This ensured that the status was always visible and up-to-date, from the shed up to the division director’s office.
There wasn’t much collaboration across the divisions within MTH Construction. The division directors managed their divisions as though they were their own personal construction companies.
This meant, among other things, that the individual division directors were responsible for all relations with major clients within their own divisions. At no time did they hand over contact to anyone in another division.
Meanwhile, employees did not assume responsibility for project management. They entered information into the systems as required, but felt no responsibility for the result! Instead, their management approach was budget-oriented.
The division directors worked together to drive the idea of 20-0-113 home throughout the organisation. They implemented the concept across the divisions within their own areas and ensured reporting to the relevant staff on the same level within the organisation.
As part of the process, they introduced weekly reporting from the results boards to the top management, keeping employees focused on the goals and on the new, simplified methods.
The project managers conducted daily execution meetings at the results boards with foremen and suppliers to coordinate and ensure target fulfillment.
Everyone at MTH Construction now keeps tabs on their progress with the 20-0-113 KPIs.
The Results – as of June 2012
- The company went from errors and deficiencies in all projects to zero errors in 35% of projects upon handover
- 15% increase in satisfaction among A-customers
- The increased efficiency for 2012 will be calculated as of December 31, 2012
Area Manager Ole Christensen has proven himself a cross-organisational results hero. Ole has energetically developed and executed the entire Results Board project and ensured the incorporation of input from all involved project managers. Based on these efforts he made the boards indispensible and implemented their use in 20 major MTH construction projects.
The Unrealistic Goal
Zero errors or deficiencies in all construction projects upon handover as of December 31, 2013
MT Højgaard is one of the leading building and construction companies in the Nordic region. The company collaborates with customers all over Denmark and abroad on projects of all sizes, from small construction projects to the building of large-scale and complex works, infrastructure projects and the installation of foundations for offshore wind turbines.