A Quality Crisis Leads to a National Business Ethics Award

Blueprints: Building the World Safely  |  July 2015

Quality Crisis Leads to a National Business Ethics Award
By Mike Stajduhar & Paul Gardzinski

Blueprints_image1It was Fall 2011. An issue emerged at school that had been recently designed and constructed by The Neenan Company. An outside structural engineer, hired by the school district, called for a structural review of the 1-year-old building after a gym wall moved a few inches. Neenan, a prestigious design-build firm in Colorado, was about to be shocked: Its reputation for integrated project delivery with quality and safety would be called into question.

Understanding the potential gravity of the situation, the senior management team initiated third party structural reviews on a few school projects that were under construction. Although Neenan continued to receive support from many clients, local news outlets picked up the story and concerns grew.

Immediately, the company commissioned comprehensive reviews of 94 projects. Company president Randy Myers met personally with many clients associated with these projects to assure them that issues or concerns would be addressed.

Neenan’s continued success in upgrading its quality management system can be traced to the methodical implementation of key performance indicators similar to the company’s safety processes.

“I remember reading the first article online initially but it didn’t brace me for the shock,” Myers explains. “Our reputation is key to our business, we have never let our clients down in the past and we weren’t going to start now. We reached out to our clients immediately about the situation and how it might affect them. The scary thing was not knowing the depth of the problem and whether we could survive the financial and reputation hits. I was resolved that we would never put ourselves in this position again.” Neenan turned to its insurance broker, Flood and Peterson, and insurance carrier, Zurich. Through this partnership, the company began the arduous task of assessing its quality system to identify and prioritize deficiencies. Neenan committed to revamping its processes, starting with implementation of structural peer reviews for every project going forward. Company leaders needed a road map to guide them through the implementation of a comprehensive, best-in-class quality management system, much as they had already done with safety.

In February 2012, Neenan committed to quality improvement and began using a self-assessment tool provided by Zurich to establish a baseline for the journey that was about to begin. As part of this process, the quality assurance team was reorganized to report directly to the chief operating officer.

Neenan, Flood and Peterson, and Zurich established a task force to meet monthly. For 2012, Neenan was on a quality program mission. “We brought in our partners at Zurich and Flood and Peterson to help us honestly assess our current processes and areas to focus,” Myers states. “While we were strong in some areas, we were mediocre or weak in others. We had monthly follow-up meetings to review our progress and ask questions to improve our processes.”

Blueprints_image2These meetings helped sustain momentum. The initial assessment identified several key areas that were in need of a best-in-class quality management system ( Figure 1). It was developed specifically for Neenan utilizing existing Zurich Risk Engineering tools and risk management expertise from Flood and Peterson. From this initial assessment, through collaborative task force meetings, Neenan identified and prioritized elements that would ensure steady and efficient progress to implement a redesigned quality system.

With a goal of full company implementation by January 2013, Neenan took 1 month to identify its quality program initiatives for design and construction phases while establishing timeline goals for each phase. These initiatives consisted of design tollgates, mock-ups, team submittal reviews, preinstallation meetings and first-in-place reviews.

Expectations and user documents were developed for each initiative over the next 6 months. Neenan’s Greg Bundy developed a web-based deficient work list tracking tool and Neenan chose six projects (user groups) to test the systems. Listening to requests from the user groups, the company developed an iPad app to track deficient work items. Neenan’s IT group continues to be an integral part in the development of the quality process tools.

Blueprints_image3The value of the testing phase for the new processes and tools exceeded everyone’s expectations. According to Mike Stajduhar, Neenan’s director of quality assurance, “Not only did the user groups provide input for continuous process improvements, it showed just what can be accomplished when we all work collaboratively towards a common goal.” When comparing historical owner punch list (deficient work items) data with early and consistent use of the app, the size of owner punch lists declined by 46%. The tool was working (Figure 2).

The complete quality program was rolled out to the company after 10 months, 2 months ahead of the original goal. Initially the roll out included the field, project management and project coordinator disciplines, then later the design and preconstruction disciplines. The 2012 quality program mission was accomplished.

Blueprints_image4In January 2013, five new projects were selected to utilize the new processes throughout all phases of design and construction. Neenan developed webbased tools to measure team participation in the new quality program during the first quarter of 2013. These tools were created to be shared with and accessed by everyone in the company. The quality program was locked and loaded after 15 months of hard work. The real world test was about to begin. The first project using the full quality process was completed in August 2013 and the initial results are promising. The project team surpassed intended participation goals and the owner’s punch list items decreased by another 50%. By reducing this punch list work, worker injury exposure was also reduced significantly (Figure 3).

Neenan’s continued success in upgrading its quality management system can be traced to the methodical implementation of key performance indicators similar to the company’s safety processes. These include: management support and commitment; widespread organizational involvement; pretask/project planning; training; dedicated quality/safety staff; field execution; subcontractor management; and performance measurements. New performance metrics are being developed and utilized to provide extra motivation and further increase continuous improvement efforts. This ties into the firm’s overall goal of having safety, quality and production fully integrated.

The Neenan Company received the 2013 American Business Ethics Award from the Foundation for Financial Service Professionals. Established in 1994, the award recognizes companies that exemplify high standards of ethical behavior in their everyday business conduct and in response to specific crises or challenges. Chosen from a group of 30 other companies across the U.S., the company received high marks for its “stand up, don’t cover up” philosophy, which guided the company to take care of its clients and create a best-in-class quality management system.

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Mike Stajduhar has more than 35 years’ experience in the construction industry and is director of quality assurance for The Neenan Company. He holds a B.S. in Industrial/Construction Management from Colorado State University, is an AIA professional affiliate and a member of ASHE.

Paul Gardzinski has been employed by The Neenan Company since 2000 and is responsible for the quality assurance program that prevents construction defects. He holds a B.S. in Architecture from Lawrence Technological University.

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