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It is Broken, and It’s Time to Fix It.

Construction professionals are superb at managing risks and delivering projects safely, on time, within budget, and to high quality standards.  This is what they do, and they do it very well.  Unfortunately, being excellent at managing construction projects doesn’t necessarily mean that you will be excellent at leading companies and teams through change.  And leading through change is what is necessary to make the kinds of cultural shifts that are needed today and that I described in article #1 published in March, in this 3-part leadership series.

Leadership and management have two very different objectives and require two very different skillsets.  The objective of management is to retain control, ensure the adherence to standards and rules, mitigate risks, maintain the status quo, and avoid disruption.  Management is tactical in nature.  These are all good things, but this is NOT leadership.  As a matter of fact, it is just the opposite of leadership.

Leadership’s objective is about vision and creating a future.  Its goals are more about advocating for change, intentionally causing disruption, and deliberately taking on risk for the betterment of the enterprise, and the industry. Leadership is strategic in nature.  The idea of causing intentional change and disruption when things don’t seem to be so bad as they are, seems like a fool’s errand.  The old adage of, “if it ain’t broke, don’t fix it” is alive and well in the construction industry.  The problem is, things actually are broken, or at least in need of significant improvement.  Yes, we are able to deliver the minimum expectations of budget, schedule, and quality, but we need to deliver more—we need to deliver beyond minimum expectations—and we can.

Everyone in the industry knows there’s a better way to do this business—everyone.  We are all aware of that nagging productivity graph that continues to show productivity as declining in construction, compared to all other non-farm industries.

The Burns School at DU regularly hosts collaborative workshops
for industry and student participation.

This unaddressed trend has been negatively impacting our industry for decades, and we have done nothing intentionally as an industry to reverse it.  It’s as if we are hoping nobody notices—but the truth is, everyone has noticed and judges us by it.  Or, how about the more recent 2017 Global Research Report by McKinsey on the adoption of digital technologies by various industries.  In the report, construction sits at the bottom of a graphic, just above agriculture and hunting, as one of the least adoptive industries when it comes to innovation and technology.

Outside entities are looking long and hard at these reports and long-standing trends and taking notice.  They see an industry, they describe as archaic, and ripe for disruption, failing to lead itself out of its tired and commoditized existence, and into a future filled with opportunity.  We will either choose to lead ourselves into the future, or someone else will do it for us.  Just like Amazon took over Whole Foods in the summer of 2016, there are a number of business and capital investment entities outside of the design and construction industry looking hard at our traditional ways of doing construction and seeing all kinds of opportunities.  They see ways to increase the use of technology, prefabrication, automation, and robotics, and are not afraid to pursue them.  They know there is a desperate need for a changing workforce—one trained and prepared to build things differently.  As an industry we continue to moan about the declining workforce and lack of skilled labor as if they are ever coming back to pre-2008 numbers.  They aren’t.  But instead of focusing our attention on new means and methods of construction like 3D printing approaches and mass production methods, we continue to ignore the hard trends coming our way.

We are stuck between a rock and a hard place.   We are superb at managing the status quo, and because our clients are also stuck, as evidenced by their insistence that we continue to compete on a low-bid basis, there’s been no need to transform ourselves into a modern industry.  As long as clients expect nothing more than meeting the minimum expectations and the mediocrity that the low-bid mentality delivers, we see no crisis, and therefore no need to change.  And because we see no need to change, we see no need for leadership.  However, change is headed at us like a fast-moving train, whether we are ready for it or not.  There are just too many instances where we find ourselves at the low end of the spectrum in terms of productivity, technological advancement, and innovation.  There are entities well positioned in these 3 qualities poised to take over the construction industry and lead it into the future.  That is, unless we decide to do it for ourselves.

Dr. Barbara Jackson is the Director of the Franklin L. Burns School of Real Estate & Construction Management at the University of Denver. If you are interested in an advanced course or degree in Real Estate and the Built Environment contact the Burns School 303.871.3432.

 

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