Construction Industry Needs Steve Jobs.

Construction is not sexy. Construction is hard, dirty job full of traps in current financial climate. This is how it is today. And this is how it was a century ago. Construction industry as a whole has not changed significantly in past decades. Sites are much more safer places to work, better organised but at the end of the day, construction process has not changed.
Any progress can be achieved by evolutionary or by revolutionary changes. But why construction industry is not changing? There is simply answer to this question. There is (or rather there was) not a good reason. Through the decades costs of low efficiency, lack of innovations were transferred  to the end client. And client was paying for this knowing, that in long perspective value of  investment will increase. With a financial crisis this times are over.

Construction business model – cash rich, low margin – is not motivating main players on the market to make radical changes. But things must change. Cash reach low profit business model is sustainable only if  turnover can be increase year by year (or worse case keep at the same level). Increasing margins is very difficult in current climate. Of course weakest player disappear from the market giving a breath space for remaining ones. This natural market mechanisms keep industry going. Going on lower gear.

To make a big step forward, the whole industry needs to change. Businesses must evolve from simple brick contractor to customer demand driven manufacturer. To achieve this we need visionary which will do for construction industry this, what Steve Jobs did for IT industry. We need a person, which will have a courage to cross current limitation, re-think the business from beginning, find new values. I think that new potential values are laying in following areas.

• Values can be created on the border of two categories. Using analogy from Apple – introducing new hardware products (ipod) was driving and was driven by introducing new content provider (iTunes store). The same can be done in construction industry. Revenue streams are not generating only from contract job itself (core business) but also by adding maintenance service to the developer (added value to the core business). There is much more possible sources of new business ideas on the border of two categories.
• Much wider and deeper implementation of new technologies into industry. BIM is a great example how relatively simply idea can make a huge improvements in organisation.
• Re-engineering and optimization of current processes in organisation using tools common for manufacturing industry but still exotic to construction.
• Better understanding end user needs. I am using the word end user (not client) intentionally. In most cases client knows exactly what wants to have for money paid. A lot of architects, interior designers etc. representing investors instructing contractors what, how from what material should be done. And this is fine. But without understanding needs not only client, but also end user the industry will not move forward.

So, what must happen to change construction industry? Everybody of us have to focus on evolving business, step by step increase efficiency, lose less material. Let’s implement kaizen philosophy in construction industry. And then we need revolutionist. Who it will be? Have no idea, but can not wait to find out.