Comment: Removing friction from the construction value chain

With COVID-19 accelerating our industry-wide digital transformation, the construction value chain, which in recent years has delivered approximately $11 trillion of global value added and $1.5 trillion in profits, is ripe for overhaul. As a result, all players across the construction value chain now need to develop strategies for dealing with or leading this disruption and improving productivity, changing their mindsets and ways of working in the process.

Everyone wants infrastructure projects to come in on time and on budget and when they don’t, we look for learnings. Where has value been lost along the way? One of the biggest culprits is friction in the value chain, resulting from a multitude of project stakeholders, each working in silo, to the detriment of project efficiency and overall goals. Often, contributors turn up, do their part and walk away, without ever getting a proper understanding of how the whole project fits together. With a typical development including a whole host of designers, contractors, clients, consultants and third-party town planners to name just a few – and project managers only bringing the relevant parties in at a certain point on the timeline – this can be extremely detrimental.

It’s clear we need a new approach, one that puts a renewed focus on value and brings everyone together at the front end of a project. By understanding it as a single unit and allowing everyone to have their say, we can start removing friction in our value chains, avoid costly rework, and create a more holistic approach to our workflows, ultimately improving time to value.

That all sounds great, but how will it work in practice?

Collaborate don’t Coordinate

We’ve currently got an industry full of individuals who want to do it their way, with everyone tending to look at a project through their own personal lens and often failing to keep the broader agenda in mind. Until now, the majority of project teams might have loosely coordinated, but only really come together at crucial points in the project lifecycle. The rest of the time, they work in their own particular ways, using their own technology stacks, processes and data standards, with little thought to integration. It is only when they come to join the dots that often they realise their ways of working aren’t compatible and this inevitably leads to delays.

While coordinating is a loose arrangement – you might quickly scan a document relating to another aspect of the project but rarely give it much thought – true collaboration is about bringing together all the key contributors  at the start of the process to decide on agreed ways of working. This makes it far more real for people – after all, once these are agreed upon, there won’t be the option to opt out later on. And, on balance, losing a week at the start of what can often be a project spanning years, is a small price to pay for time and hassle saved later on.

Trust others and be open to compromise

We’re an industry of perfectionists and often that gets in the way, with the individualisation of preferences eroding the value we’ve created. Effectively moving from coordination to collaboration will therefore require a certain degree of compromise – ways of working agreed upon by the majority might not be how you personally would do it, but that doesn’t mean it’s fundamentally wrong. If someone has made a decision somewhere else in the value chain that this is the right way to do things to preserve value, then why not adopt it? That’s a very different way of looking at things – one that’s not inherent in our industry, but that we must nevertheless start to embrace, trusting each other’s judgement for the benefit of the project as a whole.

It’s a cultural change

While you can be coordinated in terms of organisational design and the processes you put in place, at the end of the day real collaboration comes from people not technology. And if people don’t understand where the value is, they won’t work to preserve it, so they need to be brought in at the start of the process. Teams that are working in this more progressive way already see a difference in the outcomes.

Let’s be clear. Integrating the skills and resources of distinct teams, each focused on their own targets, to achieve a much larger project goal is far easier said than done. And although design transformation can help us get there, with collaborative decision-making based on insight from data and common design environments, it takes a lot more than people being willing to come together, share information and cooperate. It involves making hard decisions and trade-offs about what to do and what not to do. But with McKinsey estimating a $265 billion annual profit pool awaiting construction industry disrupters, the rewards look to be well worth the effort.