The construction debate
By PHIL EATON, as featured in BUILD MAGAZINE
Fragmentation is the chief cause of unease in the construction industry says Phil Eaton, and the answer is more consolidation and working together to build a community.
THERE ARE ALWAYS going to be debates and opinions about the property industry, and there’s a lot of pressure to get things right. The main question for a recent debate our industry had was can we fix it? Well, yes we can!
But how? We must first agree on the issues affecting it and holding it back.
Time for a shift in thinking
I’ve worked in the property industry for 25 years, most of this time for companies doing both construction and development. At Greenstone Group, we combine these disciplines, and many clients see major benefits of having both working together – something we need more of.
Recently, I chaired a major debate on issues in the industry. A key takeaway from the debate was that there needs to be a big shift in our thinking.
The top issue affecting our industry is fragmentation – we have lots of separate components, and they are not aligned. The knock-on effects of this are not obvious but cumulatively are huge and compound exponentially to create the dysfunctional industry we have.
Why things aren’t working
The industry is not working effectively because there is:
- short-term thinking as each of the components cannot see the big picture.
- a lack of trust or alignment between these separate parts – information does not transfer and efficiencies are lost.
- a lack of effective governance and planning – as a result, continuous improvement and innovation is not sought.
- limited training and development opportunities to attract and retain the people we need.
The upshot is that the industry has unintentionally created an environment where it is unable to scale up. It is a common retort that, to solve the current issues, builders need a transparent and steady pipeline of work. That’s a somewhat utopian dream that is hard to reconcile with a free-market economy.
There will always be peaks and troughs in activity as well as delays depending upon market cycles. Even if the government plugs the gaps with its own work, it is susceptible to elections, general politics and debt restrictions.
Provide a solution, not a product
The solution is more introspective and more medium to long term. The key shift needs to be in how we think. Instead of providing a product, we need to provide a solution. Instead of providing just labour, just material and just margin – provide a sustainable end-to-end system focused on the needs of the end user.
This change in thinking promotes an entirely different approach to business such as joint ventures, amalgamations and partnerships. Consolidation is the perfect antithesis to fragmentation.
It’s key to have the right people for this approach, leading to a focus on competency and skills. A solution or systems-based approach has other benefits. It aids transfer of information and formalises it, so information does not fall between the cracks.
Risks can be better mitigated if properly identified, and with more competent people fulfilling a broader range of roles, we can do this. The cost of research and innovation can be shared, and our chances of success become much greater.
Being part of a wider community
Rather than the dog eat dog mentality, we need to view ourselves as part of a larger system, a wider community. This allows us to define our role better. How we define the system or community in terms of size or scope is up to us. The bigger the better in my book as it will bring a wider set of values and perspective.
We need to own the solutions and stop expecting others to provide them. Let’s look up and down the supply chain, across at our colleagues and forward to the future.