Construction's Culture Problem (ft. Fouad Khalil)

Construction Brothers

Today we're revisiting a conversation we had with Fouad Khalil in October of 2023.
Fouad is the founder of and Principal at Modly, a modular construction consultancy that provides the building and real estate sector with market research, feasibility analysis and advisory services. Today he’s here to share some leadership insights.
We jump right into the conversation today with some talk about liability. Tyler asks Fouad to repeat what he had explained in an earlier conversation.Fouad says that your insurance carrier will tell you…
-Don’t say, “It will be done this way.”
-Don’t get on the job site and direct other teams’ workers on how to do their job.
When you do these things, you’re taking on liability.
Eddie points out that general contractors get trained to shed liability. This leads to gray areas within the hand-off territory where information degradation occurs.
Tyler mentions that some schools are unable to implement shop programs because of insurance costs.
5:03 - Sweden and Building Robust Teams
Fouad shares about his experience working on a project in Sweden. He recounts a conversation about potential leaks on structural wood components on the building. The answer about potential leaks was, “We’ll work on the solution together.”
Fouad shares about the critical path and lead times. He talks about schedule compression and how every single step in the process can become critical. A shortage of screws can result in a whole project coming to a standstill.
He mentions the insights he gained from the book Managing the Unexpected. This book focuses on high-reliability organizations like air-traffic control, NASA, etc.
In manufacturing, you can burn through your cash in no time. Efficiency is everything. Fouad wanted to apply this knowledge in his clients’ projects.
Fouad talks about the need for humility and honesty in regard to the planning fallacy. We underestimate.
20:36 - Key Lessons from the book
We asked Fouad here today to discuss some of the lessons he learned from a book he mentioned to us recently. The book is Managing the Unexpected by Karl E. Weick and Kathleen M. Sutcliffe.
Here are the five traits that the authors saw in high-reliability organizations:

1. Operational sensitivity
2. Preoccupation with failure
3. Reluctance to simplify
4. Commitment to resilience
5. Deference to expertise

We expand upon each of these briefly. Fouad quotes Churchill: “Plans are useless, but planning is essential.”
Eddie discusses the confusion he felt when his college coach told him to work at 90%. His point was to be deliberate and have a reserve. Maintain a buffer.
Fouad explains that these principles apply to managing crews of any size. If you don’t manage thoughtfully in these respects, your best people are going to burn out. He gives examples about how to institute quiet times throughout the day when there will be no meetings.
Eddie talks about creative use of red Solo cups in the office.
33:20 - Debriefing to Avoid Repetition of the Same FailuresTyler asks Fouad to explain how effective review of failures can ensure improved performance going forward. He talks about the importance of categorizing and analyzing the failures. He refers to various historical failures that were addressed thoughtfully.
Eddie connects this to recognition of safety failures even if those don't lead to serious injuries. We also discuss how the principle plays out in relationships with contractors who try to downplay mess-ups.
43:04 - Recognizing the Experts
Fouad talks about the distribution of responsibility in specific situations to the people most capable of making the best decision. It’s not about staying loyal to a flow chart. If the lower-ranking person is in a better position to make the judgment, let them make the judgment. Then hand that authority back to the conventionally in-charge figure once the situation has been addressed. It’s about dynamic teams.
One more time, here’s the book Fouad brought to our attention today: Managing the Unexpected.
Find Fouad Online: LinkedIN
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