Enabling behaviour and culture change in the construction sector
Culture is how people behave and work together within an organisation, and the construction sector faces unique challenges when it comes to developing and implementing a cohesive culture.
As part of the Construction Sector Accord’s Towards High Performance webinar series, experts from across industry discussed how we can enable behaviour and culture change in the sector.
Following significant input and collaboration from industry and government agencies, the Construction Sector Accord's three-year Transformation Plan sets out a bold vision for transformation – 24 programmes across eight focus areas focus on driving long-term culture change and helping to create a more sustainable and profitable construction sector.
The Transformation Plan focusses on enabling behaviour and culture change by improving health and safety, strengthening procurement practices, raising standards of leadership, and growing and developing a skilled, sustainable and diverse workforce.
At the webinar experts from the Construction Sector Accord, MartinJenkins, Fonterra, Fulton Hogan and Watercare shared best practice, and discussed their work with government and industry to drive behaviour and culture change in the construction sector.
Understanding culture and behaviour
Speaking on the webinar, Behavioural Scientist from MartinJenkins, Renee Jaine, said culture is known as "the way we do things here".
Jaine compared culture to the fundamentals of a building. The first layer is the foundations, the underlying beliefs and assumptions about what is important. Then the walls and roof, the tangible elements of culture – what is reinforced daily, what people talk about and focus on, and what gets overlooked. Finally, the paint job, a more superficial idea of culture.
"This is what a lot of people think of when they think of culture. They think of the values on the wall – we are innovative, collaborative and those kinds of things – but in terms of driving culture change they're actually at quite a superficial level. You need to kind of address the structure and the foundations if you really want to drive culture change.
"You can't actually change a culture without changing people's behaviour. If culture is in essence, the way we do things here, then obviously the way we do things is the way that people live their lives, the way that people make choices and decisions and go about their days at work. You can't change a culture if you don't change behaviour."
Challenges for the construction sector
The construction sector faces unique challenges when it comes to culture and behaviour. Jaine said in the industry there's often a tension between working fast and efficiently to get value for money, and health and safety – particularly given the sector works with dangerous equipment and machinery, and safety is a key concern. She said efficiency and safety aren't in conflict, but often if these values aren't communicated the right way it can seem like there is a cultural challenge.
Another challenge for the construction industry is around risk. Who creates risk and who holds risk in the long-term? In construction the risks that are created are quite long-term, risks that are created today might not be felt until many years later, as occurs with building defects.
"It's important to embed values and behaviours like we do the right thing even when no one's watching, and we take responsibility for our actions even if it costs," said Jaine.
"But again it's the balance right? You don't want a company taking excess responsibility because that's not fair, so finding the right balance of risk and who holds it, I'd say that's a unique challenge."
Fonterra's people-focused approach
Fonterra is one of several organisations across the country taking the lead by introducing programmes that are driving behaviour and culture change in the construction sector.
Following two construction site fatalities in 2009, Fonterra wanted to understand how it could avoid future incidents. The dairy co-operative decided to fundamentally change the culture at its worksites and over the following 10 years Fonterra developed its Community of People programme, which has fundamentally changed the culture of its work sites with an innovative approach to worker welfare and project efficiency.
David Williams, Cultural Advisor of Capital Projects at Fonterra, said these changes not only made Fonterra's employees and contractors safer and healthier, but also made its projects more productive and successful.
"It's been very interesting watching the responses and the reactions of people who are new to the village concept and the Community of People idea. For many people, it's a kind of disbelief when they first come aboard, but after a while, they understand that there's a reciprocal expectation that if Fonterra's going to provide all these facilities then the expectation is that you provide your best work.
"If you invest in the people, the other things will follow. So that's the first lesson. The second is that culture change is iterative and recursive. Which means that things don't happen in the linear fashion. Sometimes you'll make an intervention and you get kind of an unexpected result.
"Sooner or later, new habits are formed and you do end up with this culture trajectory towards better performance. It's really important to keep at it. If something doesn't work the first time, it doesn't matter. Keep doing it, keep doing it and keep doing it."
Watercare – leading a collaborative culture
New Zealand's largest water and wastewater company, Watercare, is working with its construction partners on an innovative carbon reduction programme. The programme is driven by collaborative, long-term supplier partnerships and is enabling behaviour and culture change through demonstrating industry leadership.
Tuan Hawke, Solutions and Implementation Lead of Programme First at Watercare, said they started by setting a bold vision of a 40% reduction in carbon by 2024, a 20% reduction in infrastructure cost by 2024 and a 20% improvement in wellbeing, health and safety. The vision was supported throughout the organisation, from the top down – led by Watercare’s Chief Infrastructure Officer, Steve Webster, and his team.
"We needed a game changing approach. We couldn't do it the same way as we'd always done it before and we couldn't do it alone. So we needed our partners to be able to help us with it. The previous way that we used to do it was quite short-sighted. Project by project and that didn't deliver the outcomes that we required.
"The programme approach enabled learnings to be shared and reused. Lessons learned can add value. The programme approach enabled us to upskill, keeping people with the skillsets, viability of forward work and keep people engaged and excited."
"If we get the correct people in the room when we kick off, we really understand the project and we go for all partners and it minimises rework, it helps us develop things that are constructible and efficient in what we're doing," said Daniel McKessar from Fulton Hogan, one of Watercare's Programme First construction partners.
Improving the culture of the construction industry
Construction Sector Accord Transformation Director Dean Kimpton said the Transformation Plan is jointly owned by government and industry and has brought industry, central and local government, sector organisations, and other stakeholders together to design and implement targeted initiatives. It is designed to benefit all parts of the sector, including small, medium and large procurers, professional service providers and contractors.
"We are now seeing leaders across the sector, from large and small businesses and government departments, talk with each other about common problems and collaborate on ideas and ways to transform our sector.
"Only by working together can we lift the performance of our industry."
This webinar was recorded on 31 March 2021. It includes speakers from the Construction Sector Accord, MartinJenkins, Fonterra, Watercare and Fulton Hogan.
Watch the full webinar(external link) - vimeo.com
This video is a direct recording of the webinar, which includes footage of the speakers as they talk. There is also video footage provided by the represented companies interspersed throughout this webinar.
Good afternoon and welcome to the Construction Sector Accord's webinar series, "Towards High Performance". I am Jess Cartwright and I will be your host this afternoon.
The Construction Sector Accord is a genuine partnership between government and industry that's working to fix many of the issues and challenges facing the construction sector.
Today's webinar will explore how we can enable culture and behaviour change in the construction sector. We've got some fantastic speakers joining us today from the Construction Sector Accord, MartinJenkins, Fonterra and Watercare that will discuss their work with government and industry to enable culture and behaviour change.
Our first speaker today is Dean Kimpton from the Construction Sector Accord, welcome Dean.
I'm really pleased to be talking with you today about enabling behaviour and culture change in the construction sector. We've got a very impressive lineup of speakers. And on behalf of the Construction Accord and I'd like to thank them for their time and of course thank all of you for participating in this webinar but before we start, I want to give you some background on the Construction Sector Accord.
Many of you will recall the Construction Sector Accord was launched in April 2019 as a joint partnership between the Prime Minister, Accord ministers and industry leaders and a fundamental purpose of the Accord was to reduce many of the issues and challenges facing our sector to the benefit of all parts of the sector. Whether small, medium and large companies. Whether procurers, professional services providers, that are contractors, it didn't matter. And the Accord was also the result of significant input and collaboration from industry and government agencies.
With the Construction Sector Accord's transformation plan setting out a bold vision for that transformation. In fact we've got 24 programmes across eight focus areas and each of them are focused on driving long-term culture change and helping create a more sustainable and profitable construction sector. The exciting thing is we're seeing leaders across the sector from large and small businesses and government departments talk with each other about common opportunities and challenges and collaborate on ways to transform our sector and then they're doing the change.
As an extension of those relationships and a focus on the improvement is the creation of the Construction Sector Accord network. This network is a new collective of businesses and government agencies and organisations all committed to the Accord's vision of a high-performing construction sector. It's a voluntary membership, available to all within the sector committed to the principles and behaviours of the Accord.
As an industry we need everyone working in the construction sector to join the network and lead change by example. And only by working together can we lift performance of, within the construction sector. We also need you to be part of the change. So please keep an eye out for the announcements and take the opportunity to join.
Now, to the primary focus of today. Central to the Accord's transformation plan is development of what we've called the Beacons Programme. The Beacons Programme is the shining light of the transformation plan. It showcases our industry-wide projects that are taking risks and trying new approaches for a better performing sector and over the last year the Beacons team, led by Andy Cochrane have been engaging with many of you across the construction sector to identify good practice and how it can be shared to support the Accord's objectives.
Today we're going to hear from two of those organisations, Fonterra and Watercare and about how they are enabling behaviour and culture change. So thanks for your time everybody. A special thanks to Fonterra and Watercare and I know that you will enjoy this webinar.
Thanks very much Dean.
Our second speaker today is Renee Jaine, a behavioural scientist from MartinJenkins. Thanks for joining us today Renee.
Thank you, it's great to be here.
Renee, we have a few questions for you about the importance of culture and how to enact behaviour change in the construction industry. The first question, what does culture mean?
Yeah so one of the simplest ways of defining culture is the way that we do things around here and because we're talking to a kind of construction audience today I think it's useful to have an analogy of a building. So in a culture there's three layers that you can experience. So there's the foundations. So those are all the kind of underlying beliefs and assumptions about what is important and what is true and then there's the visible structure. So things like the walls and the roof on a building. Those are things like the tangible elements of culture. So what gets reinforced daily, what do people talk about, what do they focus on? What do they overlook as well, that's an important part of culture and then there's kind of the paint job. So that's the really superficial element of a culture.
This is what a lot of people think of when they think of culture. They think of the values on the wall. You know we are innovative, collaborative, those kinds of things but in terms of driving culture change they're actually quite a superficial level. You need to kind of address the structure and the foundations if you really want to drive a culture change.
And how does behaviour change fit in?
So behaviour change and culture change, in my world I see them fitting together because you can't actually change a culture without changing people's behaviour. So if culture is in essence, the way we do things around here then obviously the way we do things is the way that people live their lives, the way that people make choices and decisions and you know, go about their days at work. So you can't change a culture if you don't change a behaviour.
Why is culture important for businesses and organisations?
Yeah that's a good question. So there's a famous saying from the management consultant, Peter Drucker that culture eats strategy for breakfast and what that really means is that a strategy is just a fancy word for a plan right and that people carry out the plans.
So if you have all the fancy plans in the world but you don't have people on board with that plan and people acting in a way that aligns with that plan, you're never going to get the results that you want to get. And I should say at this point that there's no one right culture.
Sometimes people go oh you know, how do we improve our culture? It depends on your context, it depends on what you need your culture to be like in order to get, to achieve the strategy that you have set out.
So for instance, if you're in the military context, a command and control, really hierarchical culture is completely fine for that context. You don't really want people being hugely innovative when they're on the battlefield. You want them listening to orders and doing things in quite a prescriptive way but if you're a startup tech company then you will need a completely different culture to kind of achieve the strategy that you've set out.
What are some of the risks of having a bad culture?
So I think it's useful to think of two types of bad culture. There's the objectively bad cultures where you get things like bullying and harassment. Cultures where health and safety is not valued at all and people are treated as quite expendable resources and in those cultures you're going to get really predictable outcomes.
Things like, probably HR issues. Probably some injuries and illnesses onsite and maybe even some legal claims. So that's a risk for those objectively bad cultures and then the second type of bad culture which I've sort of hinted at before is cultures where there's not proper alignment between what you say is important and the way you're actually operating day to day.
So in those kind of disconnect cultures which I think is much more common in New Zealand as a risk, you get employees becoming quite cynical and disengaged from leadership when leaders talk about values and what matters. And over time, that kind of leads to an us and them dynamic. People feel put-upon and almost not trusted with the truth about how things really are.
Over time, you might get your employees putting in less discretionary effort to achieve your strategies and goals if you don't have a positive culture. And that kind of ladders up to less customer satisfaction because you can really tell when the staff aren't satisfied and that feeds through to the customer experience.
Richard Branson talks about how if you sort out your staff first and keep them happy, then that will ladder out to client experience and positive business outcomes. And finally I think if you have all of these issues, you're going to get much more presenteeism, much more absenteeism and ultimately, turnover of staff because people don't like being in an organisation where they don't feel like the values are really being lived out in an important way.
Are there any culture or behaviour issues that are unique to the construction sector?
Yeah so one challenge which I think is quite common across sectors like construction, manufacturing and forestry, those kind of hands-on sectors is that you have, you have a tension between the business ethos of work fast, be efficient. You know get good value for money and we're actually dealing with quite serious equipment and machinery and quite a lot of health and safety. We really need our people to be safe. So those things, efficiency and safety are not in conflict but if you sell them the wrong way it might seem like there is and that's a cultural challenge. So if you see safety as you know, stop and think all the time about what you're doing, that's a pretty unrealistic way for people to operate day to day.
I'm a behavioural scientist and a lot of what we focus on is how do you make the expected behaviour as easy as possible and almost as mindless as possible so that even if people aren't thinking straight or aren't you know, being really onto it moment to moment that they're still safe and still efficient. So I think that's one challenge.
I say another more unique challenge to construction is around risk. So who holds risk, sorry who creates risk and who holds risk in the long-term? So this is a challenge because obviously construction, the risks created are quite long-term. The risks created today are not felt until many years later and so things like building defects as you all know.
So I think in that context, it's important to embed values and behaviours like we do the right thing even when no one's watching and we take responsibility for our actions even if it costs. But again it's the balance right? You don't want a company taking excess responsibility because that's not fair. So finding the right balance of risk and who holds it, I'd say that's a unique challenge.
And finally, what advice do you have for organisations and businesses looking to improve their culture?
Yeah so if you think back to that three layer model of culture with the foundations are what we, what's really important deep down? The structures, like the walls and the roof that you can see. The visible things and then the kind of paint job or what we say is important in our values posters. So I think where to focus would be that visible, tangible elements of culture. I know that's a little bit wishy washy still.
So back in my previous job I developed a framework called the EPIC framework. So these are kind of ways in to start changing your culture. So it stands for Environments, Processes, Incentives and Communications. So if you say you know, we want to be a more innovative firm. How does your environment cue that you want people to be innovative?
There's a really nice case study here from MIT in the States where this, I just love this story. There was a building called Building 20 which was hastily put up after World War Two. It was never meant to be a permanent structure so it didn't even get a name and this building became famous because it was so ramshackle and unpolished, that the people in it, the scientists in it felt permission to experiment and to change the structure of the building in support of their experiments.
So they did things like they rewired the building, they took out a floor, they drilled holes in the walls and that innovative kind of cuing in the environment actually led to some amazing scientific breakthroughs in terms of electromagnetism and a bunch of other scientific areas. So I just love that because the environment is, innovation's important. It's more important than aesthetics in this case.
Then there's processes. So in a construction setting, you probably don't have that many kind of processes where you want to get innovation. So it's important to say what are the bits where we give people permission to play and what are the things where we have to follow a standard process. Then you've got incentives, so how do you reward people for doing the right thing, for being innovative? Also how do you not punish people for things like making mistakes? Because people don't just notice the carrots, they also notice the sticks.
So one thing I really like is around the idea of an F up night where everybody shares the things that they've tried and they share what didn't work and discuss it rather than burying mistakes under the rug which is really a big hindrance to innovation and the C stands for communication. So this is most important from leaders.
What do leaders emphasise, both in their formal communication. So things like all-staff meetings or newsletters if you're a biggish firm but also what do leaders not emphasise? Who do they not give time and space to talk you know? What gets overlooked? If someone says, "Hey I've a great idea." And they say, "Oh I'm too busy." That's a massive cue that innovation's not really important. So how can we be consistent with our communications?
Thanks very much Renee for your insights about culture and how important it is for businesses and organisations across the sector. Our next speaker is Dr. David Williams, cultural advisor for Fonterra's capital projects. David, thank you very much for joining us today.
Oh, you're welcome and thank you for having me. I'm looking forward to this.
David, we're keen to learn more about Fonterra's Community of People programme. The programme fundamentally changed the culture of Fonterra's work sites with an innovative approach to worker welfare and project efficiency. We've got a few questions for you about the development of the programme. First of all, can you just explain what is Fonterra's Community of People programme?
So Fonterra's Community of People programme is essentially a deliberate attempt to grow a collaborative and facilitated relationship between what have been traditionally quite adversarial relationships on some projects. So it's a way of getting all of the stakeholders involved. So to give you a bit of an idea of what I'm talking about, here's a video that will hopefully explain a bit more of what you, what I'm talking about.
Scene 1 – opening
Music playing – no lyrics.
My name is Andy Cochrane and I'm the workstream lead for the Beacons workstream of the Construction Sector Accord.
The Construction Sector Accord is a genuine partnership between industry and government to try and come together and resolve some of the longstanding issues that have been facing the sector. We're coming together to deliver a three-year Transformation Plan and one of the things we identified was as an industry we've not been particularly good at sharing good practice but also learning lessons when things don't go so well. So that's what Beacons is all about – we're shining a light on good practice and helping others to learn. Over the last year the Beacons team has been going out and meeting people from across the industry. We've been looking for projects that are adopting the Accord's principles, are contributing to the Accord's outcomes, they're taking an innovative approach, and it's something that can be widely adopted across the sector. So we heard from Fonterra how they adapted their approach as they went from project to project. And what we're about to see now is how at their project in Lichfield, they put people at the centre of their project, and as a result, got improved health and safety performance, but also actually improved productivity.
- Andy Cochrane in front of the Beehive.
- Construction Sector Accord logo.
- Words on screen: Andy Cochrane, Beacons Workstream Lead, Construction Sector Accord.
Scene 2 – Fonterra
Lichfield drier two is Fonterra's major project this year, it's a four hundred million dollar project designed to produce thirty tonnes an hour of milk powder which is the biggest milk powder drier in the world. So far we've done over one million manned hours on the job, peak workforce is 650 a day, we're down to about 500, we've got a couple of months left before we actually start processing milk.
- Blank background with words: "Fonterra Lichfield Construction Site 'Village Concept'".
- Birds-eye graphic of the Fonterra Lichfield site.
- Image of a crane over the site.
- Dave Holland in front of the site.
- Side-on view of man in high-vis and hard hat walking through the site.
- Front-on view of two men in high-vis and hard hats walking.
- Dave Holland in front of the site.
- Gas omitting from vents at site.
- Words on screen: Dave Holland, Capital Project Manager.
Historically, we left the contactors pretty much to look after themselves and provide their own facilities. We realised the morale onsite wasn't particularly good and we felt that was related to the facilities they had. So Fonterra decided it would take control of setting up facilities for everyone on the project. We provided a central area which we called the Village Square.
- Dave Packer in front of the site.
- Men on scaffolding.
- Crane at site.
- Dave Packer in front of the site.
- Close up on Dave Packer.
- Image of sign with words: "Remember to be safe, your family and Fonterra needs you! Thanks for the great job you did today."
- People walking past sign.
- Birds-eye model of site.
- Words on screen: Dave Packer, Manager Major Capital Projects.
Our village here is a really good central hub for our construction community, and what you'll see at our village is its controlled access so we can make sure that we know who's here onsite and it's really important for us to know that everyone has gone home safely. We've also got our Bedrock café which is a central hub which makes sure that everyone has a place to have their lunch somewhere nice, dry and warm, have a cup of coffee, somewhere to dry a coat, and it's also the base for our occupational health nurse and also our workplace support councillor.
- Sarah Davenport gesturing in front of site.
- Woman walking past sign with words: Our construction community, what sets us apart?
- Woman scanning into site with PPE sign.
- Sarah Davenport in front of site.
- Close up of person scanning into site and walking past security gates.
- Smiling man in hard hat walking past the security gates with others following.
- Pan of man walking onto site, sign reads: Bedrock café.
- Pan of empty Bedrock café.
- Men in high Vis eating together at a table.
- Men making coffee from a machine.
- Sign with words: "Dry room, coats, bags, all welcome".
- Sarah Davenport in front of site.
- Words on screen: Sarah Davenport, Programme Manager.
Our concern is with the welfare of staff, be it their personal or work issues. The main thing for us is ensuring staff have someone to come and talk to and offload, really, whose independent and confidential too.
- Leanne Brooks in front of site.
- Close up of sign with words: "welcome and kia ora to the Florence construction village".
- Men in hard hats walking past sign.
- Words on screen: Leanne Brooks, Workplace Support.
On a big project this size it's really important for the guys to get along, so having these facilities makes it easier to get to know people. They're a shared facility so it means that all trades and subtrades can all sit together and mingle together and therefore work better together because they're not sitting in their separate portacoms.
- Megan Stephenson in front of site.
- People in high-vis around a table shaking hands.
- Over the shoulder shot of man at a table with a coffee.
- Man eating at table in group.
- Megan Stephenson in front of site.
- People laughing around a table in high-vis.
- Man nodding at table in group.
- Shot of sign covered in signatures that reads: "Florence Lichfield Powder Expansion".
- Words on screen: Megan Stephenson, Project Administrator, GEA
I've been on a few jobs in my life and, you know, not very good facilities, but here is really good, makes you want to come to work.
- Steve Rarere in front of site.
- Words on screen: Steve Rarere, Crane Crew, Ebert.
The key change that I've really seen is that we put people before the project, and the benefits of that flow right through to our health and safety statistics, and also in terms of the quality of workmanship.
- Men in high-vis sitting at outdoors table.
- Sarah Davenport in front of site.
- Close up of sign that reads: "This creates an environment where we work safer together every day".
- Crane on top of building.
It's been extremely successful for us. We've had extremely positive feedback from those involved on the project. A consequence of that is we've noticed that we've had an improvement in quality on the project. We've had an improvement on housekeeping on the project, and people are taking pride in the workplace.
- Dave Packer in front of site.
- Men eating and talking at a table in high-vis.
- Men in PPE walking through site.
Our overall objective is so that people go home safe. The village is part of that, there's a lot of things we can do in terms of making people wear hard hats and safety glasses and PPE and work permits and safety systems, but if you look after people they'll look after themselves.
Dave Holland in front of site.
Scene 3 – closing
Music playing – no lyrics.
So what you've just seen is through their community of people approach, Fonterra have really embraced the Accord's values and principles. What they've done has resulted in improved mental and health and wellbeing for their staff, a more collaborative environment on their projects, and as a byproduct, they've actually improved productivity of their projects. So we want others to learn from what Fonterra have done here. As a result, we're providing how-to guides so that people can understand how they can adopt this on their own construction projects. And this is what the Construction Sector Accord is all about: collectively, lifting the productivity and performance of the industry, and creating a construction sector that delivers for all New Zealanders.
- Andy Cochrane in front of the Beehive.
- Words on screen: Andy Cochrane, Beacons Workstream Lead, Construction Sector Accord.
- Construction Sector Accord logo.
- Beacon Projects icon.
- WorkSafe logo.
- Ministry of Business, Innovation and Employment logo.
So what was the process for developing the programme and what are some of the key tools for change that were implemented to improve site culture and behaviour?
Back in 2009, Fonterra had a really bad year. They tragically had two deaths on two different construction sites and sincerest and deepest condolences still go to the families of those who are effected but what happened was that it put Fonterra into a very introspective mindset. Particularly amongst the Capital Projects leadership and what they did then was committed to never having that same pain again for anybody.
So what we started off doing was trying to understand what caused those issues, those problems right at the beginning and what we discovered was that fundamentally, on their capital projects, there was a conflict of values. Stemming basically from different cultures in the different organisations, all involved in projects.
So they started a programme of developing a culture that included all participants equally and to do that, we first of all had to understand why those challenges and why those difficulties were there. And fundamentally it came down to different worldviews.
So to change that, we recognised that we needed to actually create a whole new culture which provided a bit of a problem because culture's one of those nebulous terms that everybody seems to have their own definition of. Which makes it very difficult to come to a common understanding. So what we did was we used an academic framework which identifies five aspects of culture that are unique or endemic to every culture. And the first thing we did was developed socialisation tactics. The key word there was tactic.
We knew that we wanted to develop shared values so we created opportunities for people to socialise at the work site and so there were a number of ways that we did that. Through facilitated leadership groups such as an OLP, an Operational Leadership People group. The Senior Leadership People group, SLP. Facilitated professional development programme for frontline managers and supervisors and then we created an actual physical space where workers from all trades, regardless of the size could socialise. And we provided space for them to physically sit down and have their lunches.
We provided cafes with subsidised meals and over time, that concept of village has become central to the programme. So now typically on large capital projects we have a physical village space which houses our community. It provides office spaces for both shared work and private work. Training facilities, a large gathering place where everybody can meet for whole of site meetings, particularly for seven o'clock pre-starts where everybody congregates in one space. Have a nurse onsite, have a counsellor onsite.
We have professional development support for the construction management team itself. A subsidised cafe. So there's a whole bunch of things that we did to make it possible for people to socialise and out of that we started telling new signs, telling new stories and sharing new signs and symbols of what it was that we believed in which was the second element of culture. That then led there onto a number of ritualised activities which we call rights and ceremonies and those things, like a regular seven o'clock toolbox talk where everybody from the cleaners onsite all the way through to the project managers are required and expected to attend.
What that then did is set up a new set of norms and values which is the fourth aspect of culture. So the values are obviously self-evident but we've made them explicit by writing or publishing a set of shared values that the senior stakeholders gathered. Sort of like a code of conduct and then a bunch of unwritten rules of acceptable behaviour, the norms. And then those were finally reinforced through a rewards and recognitions process where we overtly encouraged the good behaviours but also overtly discouraged the unwanted behaviours.
So unwanted behaviours were obviously stipulated in contracts but wanted behaviours that were not possible to contractualize were, or are routinely recognised and encouraged. Through all sorts of little things and nowadays it's quite legitimate to have a cupboard full of chocolate in the project manager's office where people can come and gather or get, get a small token of appreciation which they can then pass on to those who've done good work and together, those five aspects have resulted in a dramatic change in the site's culture and the behaviour of the people associated.
And what's been the response to the programme so far from staff, contractors and clients?
It's been very interesting watching the responses and the reactions of people who are new to the village concept and the Community of People idea because for some of them it's quite foreign. The idea that the client would actually provide facilities. Particularly for the people from the lesser trades.
So for many people, it's kind of disbelief when they first come aboard but after a while, they understand that there's a reciprocal expectation that if Fonterra's going to provide all these facilities then the expectation is that you provide your best work and your best behaviours and now, there are a lot of people who look forward to the next Fonterra project, who look forward to coming to work because they enjoy the project so much.
Are there any lessons learnt from the programme that might be helpful for other businesses or organisations looking to change their culture?
I think there are probably two key lessons that we've learnt over the last while whilst we've been working on or walking this journey. But first of all, it's counterintuitive for many people that if you invest in people, the project will be more cost effective and more effective because for so many people, the focus is on process and procedure but we work on the philosophy that if you consider the 100% of effort that goes into the success of a project, about 25% of that is due to the design, another 25% is due to the processes and procedures but fully 50% is due to the people.
So it kind of makes sense, if you invest in the people, the other things will follow. So that's the first lesson. The second is that culture change is iterative and recursive. Which means that things don't happen in the linear fashion. Sometimes you'll make an intervention and you get kind of an unexpected result.
That doesn't mean in itself that the initiative was wrong. It just means it wasn't implemented quite the way intended to do. So it's very, it's been very very important that we keep our minds and our eyes focused on the end of goal of creating a generative culture which is what we call it and recognising that sometimes an intervention doesn't quite produce the results that you intended but that doesn't mean it wasn't a good intention. And so, trying things and then trying them again and then encouraging workers again and again and again to follow the right procedures, to follow the right processes, to support them in the right way.
Sooner or later, new habits are formed and you do end up with this culture trajectory towards better performance. So it's really important to keep at it. If something doesn't work first time, doesn't matter. Keep doing it, keep doing it, keep doing it.
Thanks for your time David. Certainly a great example of how to create culture change and we're looking forward to seeing how the programme progresses.
Next up we've got Tuan Hawke from Watercare and Daniel McKessar from Fulton Hogan, one of Watercare's partners. Thanks for joining us today guys. We're interesting in learning about Watercare's Enterprise Model and how that's been developed to reduce carbon emissions and construction costs while also improving health and safety and wellbeing.
We've got a couple questions for you both about how the programme has improved site culture. The first one being part of enabling behaviour and culture change is demonstrating industry leadership. How does Watercare's Enterprise Model achieve that?
That starts with setting a bold vision. So Watercare on its journey has set a bold vision of 40:20:20 and that involves a 40% reduction in carbon by 2024, 20% reduction in infrastructure cost by 2024 and a 20% improvement in wellbeing, health and safety. The support was right through the business including the executives led by Chief Infrastructure Officer Steve Webster.
The Enterprise Model was developed as the main delivery arm to achieve 40:20:20 which focused on programme over project, end to end through the asset life cycle and encompasses planning all the way through delivery and leading to operations and community outcomes. The following video for the Construction Sector Accord Beacon Project explains this in further detail.
Scene 1 – opening
Music playing – no lyrics.
- Picture of Auckland in the background showing the Auckland harbour bridge.
- Picture of Auckland Harbour Bridge.
- Moving aerial shot over land, with water in the distance.
- Closer shot of water.
- Water feeding into a big pipe, with a walk bridge over top.
- Words on screen: "Carbon reduction Beacon Project".
- 3 split pictures – Civic Theatre, Watercare company vehicle and Auckland motorway.
- Words on screen: "Watercare provides lifeline services to 1.7 million Aucklanders".
- Pictures of Water treatment plant and then a close-up over water.
- 3 split pictures – steam on site, construction of the site and a close-up of the grid on the water at the treatment plant.
- Words on screen: "More than 379 million litres of water are supplied and 395 million litres of wastewater are treated every day".
- 3 split pictures – aerial view of treatment plant buildings and tanks, close-up looking down into one of the water tanks and a workman looking at a gauge.
- Someone turning on a tap
- Water draining in a sink
- Huge water tank under construction
- Aerial shot looking down at huge water tank.
- Words on screen: "Over the next 10 years, $5.7 billion will be spent on infrastructure".
- 3 pictures of digger silhouetted against the sun, 2 workman talking on site, and a picture of workmen in a trench laying blue pipe, with a digger in the distance.
- Words on screen: "This includes pipe lines, treatment plants, pump stations and reservoirs".
- 4 pictures - aerial view of grid, workmen working with pipes, more workman working and a wide angle of huge water tank under construction.
- Workman in a large concrete drain
- 2 workmen in discussions on site.
- Words on screen: "Watercare's partnership approach to reduce carbon is the first "Beacon project" in the Construction Sector Accord’s Transformation Plan."
- 2 split pictures – construction at Watercare treatment plant on the side of an Auckland motorway and an aerial view looking at 3 water tanks amongst the buildings at the site.
We're turning the way construction is carried out on a TED. To do this, we've introduced a new way of working. We call this the enterprise model. In the past, like many other [inaudible] we procured and built infrastructure on a project by project basis. Now we've gone into a partnership with two companies, Fulton Hogan, and Fletcher construction in a $2.4 billion agreement that guarantees they will build the majority of our infrastructure over the next 10 years.
4 split pictures – Steve Webster, digger working on site, 2 workmen with heavy machinery alongside and an aerial view looking at construction on the site.
Steve Webster, Chief infrastructure officer.
- Aerial shot of progress on site
- Digger, reinforcing wires, workman working with reinforcing
- 2 workmen with huge silver pipes surrounded by scaffolding
- Workman on a digger
- Logos of Watercare, Fulton Hogan and Fletcher Construction
- Aerial shot looking down on large white pipes/drains
- Layout of area
- Crane working on construction of huge large concrete tank.
We also have a panel agreement with three design companies that support this delivery. This enables us to collectively look at our works program and extract the maximum value we can out of this long term agreement. This reduces costs and carbon use across multiple fronts, from the development of business cases to design into our supply chain and then through into construction.
- Digger working on the huge concrete water tank
- Truck lifting metal pipes into place on the side of a street
- Crane working lifting a large girder into place, at night
- Steve Webster
- 3 pictures, steve Webster, workman welding and 2 diggers working on site
- 2 workmen moving a panel
- Aerial view looking down on panels in the water on site.
A bold vision for delivering our infrastructure with our partners is called 40:20:20. It's a 40% reduction in our build carbon, and a 20% reduction in our costs by 2024. And a year on year 20% improvement in safety and wellbeing of everyone involved in the delivery of our infrastructure.
- Words on screen: "40:20:20. It's a 40% reduction in build carbon. 20% reduction in costs by 2014. 20% improvement in safety and wellbeing year on year".
- Picture of truck moving dirt.
- 2 split pictures – truck emptying dirt and the same showing another angle.
- Picture of 2 workmen talking on the site.
This is our carbon baseline. We're going to measure all of our carbon reductions against this baseline. We believe this is a first for an infrastructure program in New Zealand. As we can see, the carbon baseline is made up significantly of materials, and backfilling and reinstatements. These are areas that we know we can focus on to reduce the future carbon footprint by choosing new materials, and new construction methodologies such as trenchless pipelines.
David Ward pointing to a pie chart showing the carbon baseline.
- Digger loading into a truck with a crane in the background
- Aerial view of the huge concrete water tank.
- Brad Ward pointing to the pie chart, to close-up of pie chart
- Brad Ward pointing to the pie chart.
- Digger at work on site
- Aerial view looking down at construction work on the site.
- Brad Ward, with pie chart.
- Looking down to a pipe with rams that has been constructed
- Man turning on a switch in a room full of gauges and switches
- 3 split pictures – workmen guiding girder into place, workman attaching plates into concrete and another view of workman guiding girder into place.
Here's one of our first enterprise model projects, the Otara Wastewater pump station in South Auckland. Rather than following a traditional approach we'll form it by having modular construction. This will be assembled in a factory and brought to site where it can be taken on a construction site where it can be constructed safely and efficiently with a real focus on the materials that we use and the way in which it's constructed. And because it's pre-fabricated, it means less traffic movements, which means less carbon.
David Ward pointing to a diagram of the new Pumpwater Station.
2 split pictures – 2 diagrams of the pumpstation.
David Ward pointing to the diagram of the new Pumpwater Station (additional camera angle).
- Traffic on Auckland motorway
- 2 men working on the construction site
- Wide angle shot of workmen talking on a construction site
- David Ward speaking to a workman on site.
- Picture of the Pumpwater Station
- David Ward.
- Construction site taken from an aerial view
- 3 pictures – truck tipping dirt, - digger filling truck and a company vehicle with some blue pipes in the foreground
- Busy street with traffic signals
- Pedestrians walking across busy street.
Congratulations Water Care and welcome to the Beacon Project Program. This is a really important initiative across the construction sector accord. It's about transformation. It's about innovation. It's about all those leading edge initiatives inside projects. And it's an opportunity to share those learnings with the rest of the industry.
Dean Kimpton on busy street.
- Large concrete pipe being lifted by chains
- Grid in water treatment plant
- Man driving heavy machinery.
- Digger on the edge of the water treatment plant
- Dean Kimpton on busy Street.
- Big orange crane on the construction site.
- Water treatment plant and then looking down onto the water treatment plant
- Big grey concrete water tank
- Workman looking at valve on the side of a big grey pipe.
- Steve Webster.
- Digger at Watercare treatment plant
- Workman giving thumbs up on site.
- Steve Webster.
Big concrete water tank from a distance, workman laying reinforcing, 2 pictures of close-up of grid in water at the water treatment plant.
Scene 6 - closing
Music playing – no lyrics
3 picture split – workman with a blue pipe in a ditch, workman watching digging progress of a trench and a close-up of wheel tracks of digger in dirt.
Picture of aerial view looking at progress of plant.
Logo of Watercare an Auckland Council Organisation.
The Enterprise Model has taken a behaviour change approach to build better infrastructure. Why and how have you done that?
To achieve 40:20:20 we needed a game changing approach. We couldn't do it the same way as we've always done before and we couldn't do it alone. So we needed our partners to be able to help us with it. The previous way that we used to do it was quite short-sighted. Project by project and that didn't deliver the outcomes that we required.
So we needed to take a programme approach to how we did things. The programme approach enabled learnings to be shared and reused. Lessons learned can add value. The programme approach enabled us to upskill, keeping people with the skillsets, viability of forward work and keep people engaged and excited.
Developing long-term supplier partnerships has been a key focus of the model, why is collaboration important?
The collaboration is important because we see the early involvement of the different parties breeds efficiency in what we're delivering. If we get the correct people in the room when we kick off, we really, we understand the project and we go for all partners and it minimises rework, it helps us develop things that are constructible and efficient in what we're doing. And really looks at reusable materials and reusable designs so we can carry them through the whole programme.
What are some of the benefits so far, for Watercare and Fulton Hogan in terms of site culture?
The focusing on the programme approach to how this work is being delivered has really allowed the auctioneering and the decision-making progress and process right from the start in the planning phase. So it's enabled us when we're going through the designs to work on construction techniques, work on the methodologies of how we're going to deliver it and I guess, measure the impact of the carbon through that process.
Thank you Tuan and Daniel. We're going to do some questions from the audience now. The first ones for you Renee. What advice do you have for small and medium businesses that might not be able to roll out large culture change programmes?
Yeah so two ideas for SMEs. The first is actually a really simple insight. I paid a lot of money to go overseas and find this out which is that if you want to change behaviour, you need to make it as easy as possible. So whatever your culture is that you're trying to achieve, what does that look like in terms of what people are doing?
Think of actions, try not to focus too much on what people think but what do they do day to day and then how can you make that specific behaviour or those behaviours as easy as possible? So you can follow a bit of a three-step process. The first is identify the kind of culture you want and what that looks like in behavioural terms.
The second step is design some little experiments, give your people permission to try new things and to roll those little interventions out and you can use the EPIC framework if it helps. So Environments, Processes, Incentives, Communications and then the third step is to see what works. You know gather some data and I'd really encourage you not to rely on surveys.
Surveys are fine but a much better metric is finding ways to measure the behaviours that you really want. So if want people to speak up in meetings for instance, have someone take a record who speaks in meetings and look at the diversity and the spread of that. So be a bit more creative about how you gather information about whether something is working.
And the final idea for small businesses is around bright spots. So a bright spot is basically what's already working? What's working well and how can we get more of that? Maybe you have a staff member who's just amazing at following health and safety procedures or someone who's really collaborative and how do you, how do they do that and how can you get more of that? That can be a really nice strengths-based approach to culture change.
The next question is for Tuan from Watercare. What's been some of the key learnings so far from the Enterprise Model in terms of culture and behaviour change?
The key learnings that we've found was to be flexible and agile. There wasn't a playbook or a rulebook with the Enterprise Model and integrating the partnership within the process. It meant that we could change directions as required to get the best out of the outcomes.
The other learnings included our stakeholder and messaging and communication had to be adaptable depending on the groups that we were talking to and trying to get the messaging quite clear. We also found that we had to set the scene early and we developed an Enterprise Model onboarding process so that everyone would understand what an Enterprise Model project would entail and what we needed to be able to get the 40:20:20 vision.
We stepped through and made sure carbon was included right through the beginning and it meant that right through the whole project delivery cycles through to operations and community outcomes that carbon was considered. It was also quite key to learn from the projects and integrate them into the programme and celebrate the wins.
And the last question is for David from Fonterra. David, what are some of the key outcomes of the Community of People programme so far?
So as I've mentioned there's been a huge improvement in the quality of relationships between people on site but those have translated into very tangible results for programmes themselves and project outcomes. For example, in the health and safety space in particularly which of course is what triggered this whole journey, Fonterra's done approximately 9.7 million man hours on its capital projects over the last while.
We've had zero fatalities in that time but we've also had a 93% reduction in total overall harms. So the, the practical implications of that are astronomical in terms of costs, actual direct costs saved but they've had huge improvements in the quality of the relationships and the willingness that people have had to go the extra mile. So rework's down, quality's up. Decisions are made more rapidly. So timelines are more reliable and then that leads of course to better quality outcomes, so the ramp-up of projects from commissioning through to nameplate happens as planned which is kind of unusual. But there is some even more far-ranging outcomes which are things that we hadn't expected.
So for example, in a recent project in Australia for example Fonterra was building a large dairy factory in close proximity to where some of its competitors were doing some large capital works as well and because the environment within the Fonterra village was so popular and so positive, competitors were having to pay between 10 and $15 per hour more to try and entice labour away from our project to theirs and in fact in some cases we heard, I don't know how much truth there is and whether we can believe it, but some competitors actually put their projects on hold because they knew they weren't going to get the people that they wanted because they had chosen to come to the Fonterra project.
So you know, the long-term benefits that we have people who want to come, want to come back to Fonterra projects and work for them. We find that we have no difficulty selecting quality workers and quality organisations because they're keen to join us on that journey. So the value of investing in people before the project always reduces, I'm sorry, results in the project winning.
I'd like to thank all our speakers for giving up their time today and sharing how their work is enabling behaviour and culture change in the construction sector and thank you all for joining and watching the webinar this afternoon. We hope you found it interesting and helpful.
If you have any questions, please send them to the Construction Sector Accord's email address that's on the screen now and for more information about the Accord, you can go to our website.
We hope you join us again for the next webinar of the Construction Sector Accord's webinar series, "Towards High Performance". Thanks everyone and see you next time.