Using agile in construction projects: It’s more than a

methodology
Milind Padalkar
Indian Institute of Management, Kozhikode, Kerala, India

Saji Gopinath
Bennett University, NOIDA, UP, India
saji.gopinath@timesgroup.com

Abhilash Kumar
UL Technology Solutions Ltd., Trivandrum, Kerala, India

Abstract
Agile methods have been successful in information technology projects. Can they lead to superior
performance in construction projects under high uncertainty? From case study of a high performance
construction company, we find that agile methods succeed when supplemented by high levels of trust,
vertical communication, empowerment, and ethical values.

Keywords: Agile methods, Construction industry, Organizational trust, Values

INTRODUCTION
Despite several decades of practice experience and research attention, project performance
remains far from satisfactory. According to a recent Standish Group survey report, 61 per cent of
information technology projects either failed or were challenged to meet success criteria; and 74
per cent faced schedule overruns (Standish, 2013). Zwikael and Globerson (2006) survey project
managers from several industries and report that despite much discussion in practitioner
literature about critical success factors, the failure rate of projects remains high, with average
schedule overrun of 32 per cent and average cost overrun of 25 per cent. Another study finds that
40 to 200 per cent schedule overrun is normal in information technology projects (Lyneis et al.
2001). Multiple studies link failures in information systems projects to an inability to foresee and
manage uncertainty in project contexts such as user involvement, stakeholder communication; or
process risks such as weak estimates, requirements analysis (Yeo, 2002, p. 245; Nelson, 2008, p.
70-71; Chua, 2009, p. 35; Lehtinen et al. 2014, p. 633). Studies from construction industry report
similar findings about delayed and unsatisfactory completion of projects listing client-related,
contractor-related, materials-related, and project-related factors (Chan and Kumaraswamy, 1996,
1997; Kumaraswamy and Chan, 1998; Aibinu and Jagboro, 2002; Odeh and Battaineh, 2002;
Assaf and Al-Hejji, 2006; Sambasivan and Soon, 2007; Nguyen and Cheleshe, 2015).

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 To overcome the adverse effects of exogenous uncertainty arising from factors such as client
issues, requirements management, etc., a group of software developers formed the Agile Alliance
(www.agileAlliance.org) and published an agile manifesto advocating the adoption of agile
methods in software development (Beck et al. 2001; Fowler and Highsmith, 2001). Following
this, agile methods gradually gained acceptance and began receiving attention from IS
researchers (Abrahamsson et al. 2003; Meso and Jain, 2006; Chow and Cao, 2008). These
methods were patterned after the agile concepts from manufacturing (Yusuf et al. 1999;
Gunasekaran, 1999). In parallel, construction industry and researchers began debating the
applicability of lean and agile methods in construction projects in the mid-1990. For instance,
University of Bath, UK joined with the industry to form the Agile Construction Initiative to
foster adoption of lean and agile methods in construction projects (Elliman and Orange, 2000;
Pollock et al. 2007). However, judging from the fact that there are few articles on agile methods
(e.g. Ribeiro and Fernandes, 2010; Demir et al. 2012), and even fewer empirical studies, the
agile methods do not appear to have gained as much acceptance in the construction industry,
with some even questioning whether it is appropriate for construction (Owen et al. 2006).

Given that construction projects have continued to underperform, the question of

construction methods remains open to enquiry. In particular, it is instructive to understand
whether agile methods hold advantages over the traditional methods, what benefits do they yield,
and whether their practice requires establishment of any supporting mechanisms. This motivates
our enquiry. We employ single case study approach to examine a successful construction firm,
and map its methods against agile principles. We find that agile methods offer a tactical
operational advantage over traditional methods for mitigating project uncertainty; but can
become a strategic instrument of sustained superior performance when complemented by
appropriate initiatives leading to organizational trust and a culture of teamwork. We examine our
findings with organizational trust literature and propose a model that integrates the practice of
agile methods within the enterprise vision and strategies.

This paper is organized as follows. The next section describes the case study target and the
research design. The following section provides analysis of interviews and a mapping of the
study target’s practices against agile principles. We propose a model integrating agile methods
with organizational trust and argue that agile methods can be a key element of operationalizing
the firm’s strategic intent. The final section discusses the implications of our research, its
limitations and future directions.

CASE STUDY AND RESEARCH DESIGN

The target of the case study is a cooperative, for-profit society (C-Soc) engaged in civil
construction projects. It is located in the southern part of India. We chose it as a candidate for
case study because it has had a stellar record in delivering high quality work within the planned
timelines, and we had geographical proximity to its offices and project sites.

C-Soc consists of approximately 2000 members having equal shares and voting rights, and
around 300 non-voting employees. It is driven by the values of integrity and ethics in business,
and strives to deliver quality and on-time performance. It has won several national and

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international awards for excellence in construction projects and social work. It states its values
and specifies code of conduct for its employees as follows (source: C-Soc’s website):

“…a work culture emphasizing on integrity and ethics upholds the values of the
Organization. Our never compromising attitude on quality front and never-say-die attitude,
which makes even the most difficult task look easier, help us in building a robust work culture on
the basis of which the code of conduct of the Organization is developed.”

C-Soc follows a four-tiered hierarchical structure for executing projects under the overall
stewardship of President who reports to the Director Board (Figure 1, source: C-Soc data).

No of personnel
Director Board * 13
Corporate strategy
and governance roles President 1

Director 13

Project manager/ Non-permanent role,

Project execution
Engineer staffed from team leaders
and operations roles

Team leader @/ 80
Sub-team leader

Team member 1900

* Director role has a direct line responsibility for project execution. All directors
constitute the Director Board. Directors are elected by the members.
@ Team leaders are elected into the position by the members.

Figure 1: C-Soc organization structure

It has an exemplary record of successful project completions (Table 1, source: C-Soc data).

Table 1 – C-Soc’s performance on recent projects

Project description Size (Rs Year of Schedule Planned Quality

million) completion (Actual) in months performance #
National Highway bypass Ph. II 1410.2 2015 24 (16) Very high
Construction of office complex 507.3 2016 @ 24 (Ahead of High
at state capital schedule)
River bridge with approach road 173.7 2015 24 (22) High
Approach road for river bridge 142.4 2015 12 (10) High
Construction of educational 444.5 2016 @ 24 (ahead of High
building complex schedule)
# Rated by an independent auditor/consultant
@ Estimated completion

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 The organization structure presents a few interesting features. First, the Director Board
consists of the directors who also have the day-to-day operational responsibility for projects.
Second, everyone joining the organization starts as a voting shareholder (class A member), or as
an employee without voting rights (class C member). Every class A member generally starts as a
contract laborer before being invited for membership, which is offered based on assessment of
value congruence. Thus, every voting member must perform physical/manual tasks on the
construction projects before advancing in the organizational hierarchy. Third, the positions of
Team leader and Director are chosen through elections where the members vote from among
themselves. Members typically enjoy long tenures (unless expelled for disciplinary actions) and
tend to spend long durations at a given position in the hierarchy. Fourth, Project managers or
Engineers generally tend to be non-voting employees who must be accepted by the team leaders
by the virtue of prior interactions. Apart from receiving wages for the work, members receive
performance bonuses and dividends at the close of financial year. Benefits include free meals,
medical facilities, education for children and low-interest loans. Members generally view the
total remuneration and benefits quite favorably, as reflected in the long, and often lifetime
tenures with the organization.

As our research motivation was to examine the methods and practices of C-Soc in context of
the debate about agile methods in construction, it was necessary to obtain the data freely without
imposing the structure of agile principles. Therefore, we chose semi-structured interview as the
method of data collection for our research, ensuring that the focus remained on the methods
actually employed and protecting the responses from our a priori mental frame of agile principles.
To facilitate the process of interviews, C-Soc assigned a senior and long-tenured member (SLT)
to work with us. The choice for interview candidates was made jointly by us and SLT based on
variety of hierarchical levels, organizational roles and project types. A total of 20 informants
were interviewed. Appendix 1 shows the interview questions.

The interviews were conducted in-person at C-Soc’s offices and project sites. English or
Malyalam (local language) was used as the language of interviews, based on the informant’s
familiarity with the language. Malyalam interview scripts were subsequently translated into
English and independently verified for their correctness. The interview durations ranged from
50-90 minutes. During the interviews, we let the informants define project performance in
accordance with their own lived experiences within C-Soc, and allowed them to articulate the
context, the measures and the consequences of performance. The responses were audio-recorded
as well as hand scripted. We observed semantic saturation emerging after about 12 interviews.

DATA ANALYSIS, RESULTS, DISCUSSION

Agile manifesto lists 17 principles (Beck et al. 2001; Fowler and Highsmith, 2001). We
reviewed the construction and operations management literature to extract key process
capabilities relevant to construction projects against the principles from the agile manifesto
(Table 2).

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 Table 2 – Key agile principles and corresponding processes in construction industry

Agile principle (A) Required processes in construction (B) Literature source(s) (C)
Effective response to R1: Cope with emergent requirements Yusuf et al. (1999); Owen et al.
change (Response) R2: Inter & intra enterprise integration (2006); Demir et al. (2012)
R3: Rapid decision making, short time periods
Effective communication C1: Frequent & honest interactions Scott and Harris (1998); Owen et
among stakeholders C2: Transparency of information al. (2006); Salem et al. (2006);
(Communication) Khalfan et al. (2007)
Organize teams to control O1: Team accountability & empowerment Owen et al. (2006); Ribeiro and
the work (Teamwork) O2: Experienced & competent resources Fernandes (2010)
O3: Collaboration & cooperation
Motivated, empowered M1: Supportive, positive feedback Gunasekaran (1999); Owen et al.
teams (Motivation) M2: Interference-free project management, (2006); Khalfan et al. (2007);
Focus on customer F1: High customization Gunasekaran (1999); Yusuf et al.
priorities (Focus) F2: Frequent customer interactions (1999)
Organizational learning L1: Root cause analysis of failings Scott and Harris (1998);
(Knowledge) L2: Feedback system Gunasekaran (1999); Yusuf et al.
L3: Continuous improvement (1999); Salem et al. (2006)

From the interview scripts, we extracted key organizational practices, actions, outcomes,
and traits; and mapped them to one or more processes listed in Table 2, column B (Figure 2).

RESPONSE
R1 R2 R3

Morning site Direct access

meetings, to leadership
CUSTOMER F1 Evening reviews C1
FOCUS at Corporate HQ, Open, honest 2- COMMUNICATION
Weekly reviews way reporting
F2 C2
High presence of
leaders at sites

“Master plan Primacy of values

on the wall”
“Take charge”
behavior at all levels
O1
Negligible personal
Visible, quick M1
or industrial
TEAMWORK O2 consequence disputes MOTIVATION
management M2
O3 Self-policing
Team accountability,
Team awards by teams

Long tenures
Job rotations

L1 L2 L3 C-Soc practices or actions

KNOWLEDGE C-Soc outcomes, traits

Figure 2: Evidence of agile methods at C-Soc

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 We observe from Figure 2 that C-Soc’s work processes obtain high frequency of internal
interactions and rapid sharing of reliable information across organizational levels. These directly
enable the dimensions of Teamwork, Communication, Motivation, and Effective Response to
Change. The latter appears to be primarily aimed towards treating changes arising from
endogenous or natural causes, rather than those motivated by customers, as the Customer Focus
dimension which addresses high customization and frequent customer interactions does not get
mapped with any of C-Soc’s organizational practices or traits. This is not surprising because the
construction industry projects generally tend to be well specified through the architectural and
structural engineering designs, and standardization in materials. Unlike software projects, we
expect lower levels of changing customer priorities or designs in construction industry. Likewise,
the Continuous Learning process under the Knowledge dimension receives no mapping from the
interview scripts. We note that Continuous Learning has strong correspondence with sense
making in dynamically changing contexts. As C-Soc’s projects generally tend to be from the
government or public sector domains, the changes in priorities would consist of unplanned
stoppages due to political considerations rather than design changes that would require such
learning. Thus, C-Soc could be viewed as a case of strong project performances associated with
agile implementation with an understated Customer Focus dimension.
This raises two questions. First relates to the fact that agile methods are primarily focused
on managing customer requirements (Naylor et al. 1999; Beck et al. 2001; Power et al. 2001).
The weak link between C-Soc’s methods and Customer Focus dimension would imply a material
deviation from the core agile principles which specify active sense making, teamwork, and
intervention capabilities driven primarily by a customer-induced dynamic. Absence of such core
could weaken the shared intent, and reduce the methods to instrumental procedures. Given that
C-Soc has rather low supervisory overheads (Figure 1), its strong project performance (Table 1)
clearly owes to its methods/practices. Thus, we ask whether agile methods are instrumentally
sufficient to explain its performance; and whether other enabling mechanisms are necessary to
create the shared intent as a supplement to agile methods for performance and efficiency.
Second, since the employees are bearers of any intent, it is important to understand how the
employees experience these methods; whether they view the methods as purely instrumental to
specific outcomes, or do they lead to better person-organization fit (Kristof, 1996), especially
given the long tenures and slow pace of movement up the hierarchy. We noted very high
congruity across the informants on values, ethics, empowerment, and organizational do’s/don’ts,
sometimes transferring into their personal lives. We were puzzled by the strong motivation,
enthusiasm and initiative displayed by employees at all levels, particularly the ‘take charge’
behaviors, e.g. engaging in financial transactions without prior formal authorizations and a
relative absence of agency costs (Wicks et al. 1999). We also noted that employees did not feel
constrained or intimidated when “speaking up” or accessing the organizational hierarchy.
To understand whether a linkage exists between the practice of agile methods and the
employee behaviors at C-Soc, we semantically analyzed the interview responses to isolate
phrases informing on the methods, the context, the measures, or the consequences related to
project performance. The phrases were associated with representative keywords (codes), which
were then grouped into categories in terms of their semantic adjacency. The process was iterated
until no new codes or categories emerged. Due to space limitations, only an extract is shown
below (Table 3).

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 Table 3 – Relevant extracts from interview scripts and associated categories

Interview extract Categories

“I can buy more expensive material if quality if better … I will call the President and take his Trust,
phone approval … later have to file a justification for deviation” (Purchasing exec) Empowerment
“Only team rewards … we don’t single out people on performance. You must cooperate. Loners Teamwork,
who don’t align, will move out. You can’t have ego” (Team leader) Trust
“Members are trusted people. If someone goofs up at site, they will report next morning” (Project Self-policing,
manager) Trust
“I must come on time. If I am late, I can be suspended” (Member); “Quality and timeliness is Values
critical. Cost is not important if quality suffers” (Team leader, Design engineer)
“Many times site teams nominate their own leader, even if he is younger” (Project manager) Trust
“Information cannot be rationed for personal gain. You must quit if that happens” (Team leader) Teamwork
“Workplace violence or alcoholism is not acceptable. You can be sent to crusher” (Member) Ethics, Values
“We never give bribes. Government officers know that. It is ok if the work stops.” (Manager) Ethics, Values
“Members are very experienced. They are twice my age, but they accepted me as the manager, Competence,
told me everything and corrected my mistakes. I can’t think of bossing over them” (Young project Trust, Learning
manager)
“If I see my boss doing something unethical, I will report that to his boss. Such people are not fit Trust, Ethics,
to stay in our organization. If nothing happens after that, I will report to President.” (Junior Empowerment
employee)

From the analysis, we find that ethics, values, and organizational trust emerge as key
variables from the practice of agile methods at C-Soc. Organizational trust equates to positive
perceptions and beliefs on part of an organizational member towards other members, which
influences her behaviors. It embodies the trustor’s belief in ability, benevolence, and integrity of
the trustee, which motivates a risk taking behavior by the trustor (Mayer et al. 1995. C-Soc’s
practice of agile methods is characterized by leaders making these attributes of benevolence,
integrity and ability visible through high interaction intensity, enabling investment in shared
values (Gillespie and Mann, 2004). By letting employees “take charge”, the leadership gives up a
part of its control without reducing the control over the operations because this stimulates self-
policing behaviors by employees (Spreitzer and Mishra, 1999). C-Soc’s low supervisory
overheads equate to reduced transaction costs (Bromiley and Cummings, 1995). Based on our
interviews and a review of literature on organizational trust, we propose an integrated model of
performance that complements agile methods with organizational trust. The model proposed by
us is inductive and not necessarily causal. However, we use causal loop diagrams for visual ease
to show the nature of proposed stimulus-response phenomena that could work as trust-accretive
or trust-depletive. For illustrative purposes, we show a trust-depletive model involving social
loafing by manager (Langfred, 2004) as a trustor (Figure 3). Similarly, free-riding by a trusting
employee would reverse the polarity of the employee’s trust – engagement link. From our case
study, we find that agile methods are more than information gathering and rapid interventions –
they represent opportunities for the hierarchical interactions and value reinforcement which
become harder as the organizational size increases.

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 Peer pressure
+ Employee's intent
+ & competence +
+
+
Employee's Employee's
Trust engagement +
Performance information Manager's
& intervention (Agile Trust
methods)
+
-
Manager's intent & +
competence Manager's
+ + engagement

Rewards + +

Accountability

Figure 3: An integrative model of agile methods and organizational trust

CONCLUSION
Adoption levels of agile methods remain low in construction industry, while projects
continue to underperform; and the debate about their applicability remains unresolved. In this
paper, we present a case study of a high performing employee-owned construction firm and find
a correspondence between its methods/practices and several agile principles. While we do not
find the presence of core agile dimension of Customer Focus, we find strong evidence of shared
values and shared intent across the organization. Through content analysis of informant
responses, we find organizational trust as a key construct interacting with agile methods to
supply shared intent, and ensuring sustained high project performance at substantially reduced
managerial overheads. Based on our findings, we propose an integrative model of organizational
trust and agile methods. To our knowledge, our model represents a novel contribution to agile
literature, as there is no systematic study linking organizational trust to agile methods. Further
work on this line of enquiry is intended.
We acknowledge a few limitations to our work. First, we use the single case study method;
hence the normal limitations of qualitative research methods such as lack of generalizability or
lack of falsifiability are applicable. Second, organizational trust being a multi-dimensional
construct, its interaction with work methods could involve complex behaviours and additional
variables. Third, while our case study finds high organizational trust associated with positive
intent and workplace behaviours, it is quite possible that high trust could generate negative
employee behaviours such as free-riding/social loafing on part of employees, or
negligence/disengagement on part of managers. Thus, the linkages could possibly operate as
trust-accretive or trust-depletive feedback loops. While our model accommodates such
possibilities, further research is needed to understand conditions under which the different loops
occur. Finally, the representation of the phenomena in the system dynamics nomenclature
corresponds to our proposition that the trust-agile linkages have a strongly inductive, if not a
causal character. Other variables such as leader characteristics may participate in the phenomena
to alter the induced effects in ways that requires further investigation.

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Appendix 1: Interview questions
1. Briefly describe your role and professional journey. What induced you to join C-Soc?
2. How were (are) you trained for your job?
3. What does good performance mean at C-Soc? How do you control performance?
4. How do you know something is not right?
5. What do you do when you know something is not right? What do you ask others to do?
6. Do others know what you are doing? What do you do to let them know that?
7. How often do you meet or interact with your President and Directors?

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