Construction Productivity: Divide. Survive. Repeat. Is the Old System Still Serving Us?

By Jared Chesterman

Note: In case you missed it, this is the third article in a series on construction productivity. If you're just joining, links to the earlier articles can be found at the end of this piece.

Management by divide and conquer is the strategy of the day. And it has been for a long time.

Traditional project management is built on a simple idea: Break the system into parts, manage each part, and the whole will work.

But in construction, this logic breaks down. Because the real complexity isn’t inside the parts

It’s between them.

Layers Upon Layers of Fragmented Control

Let’s look at what this really means in practice:

• Each organisation in a project is given a fixed scope, time, and cost.

• Each of those is broken down again, by sub-organisation, by service, by product.

• And then again inside those organisations—right down to teams and individuals.

This creates a huge stack of interacting parts.

Each with different:

• Deadlines

• Priorities

• Incentives

• Interpretations of success

And management says:

“Well, the complexity is your problem! Stay in your box! Deal with it!”

But here’s the reality: All the complexity exists between the boxes.

And those in-between spaces - where assumptions clash, timelines don’t line up, and scope doesn’t stitch - are where the game begins.

The Survival Game

When you procure complexity through a simple, fixed model, you create a system of games.

Each organisation, each team, each person learns how to play. Not to optimise the project, but to survive inside the system.

• Hide delays

• Shift blame

• Game the scope

• Stretch the cost

• Smile in meetings

The metrics still look green. But they’re green by design, not by truth. Because survival in this system means making it look like the plan is working—even when the system is quietly failing.

But underneath: The game is essential.

Because in this model, the betterment of the project and the survival of the organisation are often in conflict.

Complexity Isn’t a Project Problem. It’s a System Reality.

So how do we move beyond this................................. if, of course, you believe it’s real?

Step one: Acknowledge complexity. Construction, like health and education, isn’t underperforming because people aren’t trying hard enough. It’s underperforming because we are applying simple system logic to complex system realities.

And complex systems don’t thrive under control. They thrive under exploration.

Explore, Adapt, Learn — Top Left of Cynefin

In the top left corner of the Cynefin Framework lies the world of complexity: Where outcomes can’t be predicted, and the only way forward is to test, observe, and adapt.

In this world, you don’t “buy” the right answer. You build the right system to discover it together.

That requires a different kind of procurement:

• Systems that incentivise exploration

• Teams that align around value, not just deliverables

• Outcomes that emerge through iteration, not prescription

These Systems Already Exist

And they’re not theoretical.

These systems have existed in the construction industry for over two decades through Target Value Design and Lean Construction.

They’ve existed in the software world even longer through Agile, Scrum, DevOps, XP, etc.

What they share is this: They don’t work well with transactional procurement. They thrive on value-first, not cost-first, models.

They:

• Work with known budgets

• Prioritise outcomes with the client

• Redesign scope to meet real world conditions

• Maximise human potential............ not control it

And, when done as a complete system, they work.

Are we not already progressing on this?

At this point, many will be thinking: “Don’t we already have this in IPD or Alliancing? We already have a target cost.”

Yes.................. but here’s the nuance.

A target cost is not the same as a target value. And a collaborative contract is not the same as a collaborative system.

Many IPD and Alliancing projects still fall back into familiar patterns:

• Value is set once, not iteratively.

• Scope becomes fixed too early.

• Client engagement fades after commercial close.

• Projects continue to rely on traditional Earned Value Metrics, rather than adaptive productivity measures.

And there is evidence to back that up?

A detailed study conducted by the University of Minnesota’s Construction Management program evaluated 13 projects across multiple U.S. states to understand how Target Value Design (TVD) is being implemented in practice.

• Even in projects with collaborative intent, the findings were clear:

• Value is often set once—not refined iteratively

• Teams tend to freeze design too early, limiting exploration

• Estimators are under-resourced and not embedded in design leadership

• Projects track cost rigorously, but lack clear value metrics

• Client engagement often drops off after commercial close

• TVD tools are used piecemeal—not as an integrated system

What needs to be done?

These systems aren’t easy, and they’re a long way from buying potatoes.

They require:

• Trust

• Transparency

• Deep client engagement

• And fair metrics that motivate those doing the work

I don’t think its an overstatement to say it’s a paradigm shift for all organisations involved.

Value-driven system requires the client to stay at the table. Not to control the team, but to keep evolving the definition of value as the system learns.

This can’t be delegated. It can’t be reduced to governance meetings or commercial mechanisms without strangling the productivity you are trying to unleash.

But what you do get is this:

A system designed to generate the maximum value that can be achieved, for the money the client actually has, as the project unfolds.

Not pretend certainty. Not boxed control. But real, adaptive value.

What do you Value

These systems aren’t magic. They don’t promise certainty. They promise alignment with reality.

They ask more of the client, yes. More involvement. More trust. More leadership. But in return, you get:

A system designed to generate the maximum possible value for the money you actually have, when value is uncertain.

This is what frameworks like Target Value Design and Agile are built to do. They don’t assume you know everything up front. They give you a way to learn, adapt, and align as you go, so you can spend wisely, even when the path isn’t clear.

And in complex systems like construction, that’s not just better. It’s essential.

These systems don’t demand perfection. They demand presence.

So the real question is: Are you ready to lead in a system you can’t control, but can shape for productivity?

Earlier Articles in This Series on Construction Productivity

• “Comparing Bridges to Potatoes is a Mistake” Why the traditional productivity comparisons between construction and manufacturing miss the point. Read it here →

• “You’re Not Buying Potatoes – You’re Climbing a Mountain” Understanding why complex projects demand adaptive systems, not fixed plans. Read it here →

References

• Ballard, G. (2008). Target Value Design: Current Benchmark. Lean Construction Institute. https://www.leanconstruction.org/media/docs/challenges/Target-Value-Design-Benchmark.pdf

• University of Minnesota. (2022). Assessment of Current Target Value Design Practices. Department of Construction Management. [Available via Lean Construction Institute resources or academic request]

• Grattan Institute. (2020). The Rise of Megaprojects: Counting the costs. Terrill, M., & Danks, L. https://grattan.edu.au/report/the-rise-of-megaprojects/

• Snowden, D., & Boone, M. (2007). A Leader’s Framework for Decision Making. Harvard Business Review. https://hbr.org/2007/11/a-leaders-framework-for-decision-making

• Snowden, D. (2002). Complex acts of knowing: paradox and descriptive self-awareness. Journal of Knowledge Management, 6(2), 100–111. https://doi.org/10.1108/13673270210424639

• Liker, J.K., & Meier, D. (2006). The Toyota Way Fieldbook. McGraw-Hill. (For foundational TVD and Lean principles)

• Beckhard, R., & Harris, R.T. (1987). Organizational Transitions: Managing Complex Change. Addison-Wesley.