3 Emerging Construction Trends & Their Impact on Our People from Steve Jones
1) Industrialization. Projects and job sites will optimize towards the assembly of well-designed and pre-assembled components and less about construction. Expect an increase in modularization, prefabrication, big data, artificial intelligence, machine learning, and automated decision making
2) Emerging Technology. Laser scanning, modeling technology, integrated IT solutions, etc. will become the new way business is done and it is important to embrace early rather than looking only at short-term ROI.
3) Hiring & Retention. There is a talent war taking place making hiring and retention top priorities for leaders and organizations pursuing success in the coming years. Train staff appropriately, provide them with the tools they need to succeed, communicate the mission, and consider making technology competency training a part of the formal job evaluation process.
Welcome to Episode 11 of the Construction Dream Team Podcast with your host Sue Dyer! This episode features guest Steve Jones, Senior Director of Industry Insights Research at Dodge Data & Analytics, where he focuses on emerging economic practice and technology trends that are transforming the global design and construction industry. Steve has given hundreds of speeches and writes many articles for industry publications including the popular Dodge Data & Analytics SmartMarket Reports. Steve is an expert in construction trends and has a unique vantage point towards the future of construction and how teams will continue evolving.
The following show notes are a transcription from the audio interview that took place between Sue and Steve. If you want updates on the latest Construction Dream Team episodes, please subscribe to our newsletter, iTunes, Stitcher, or your favorite podcasting platform. If you like Construction Dream Team, we would LOVE a 5-star review to help us rank higher in the search engines so more of Construction Nation can learn from industry leaders and experts weekly! Now, onto the show…
Steve Jones’ Career Journey
Steve’s career started in design in the mid-70s. By the mid-80s he was VP of a firm in Philadelphia and decided to attend the Executive MBA program at Wharton School of Business. Design was not known typically for its business acumen, but since everyone was working fulltime in the program, Steve appreciated the hard nose practical concepts as opposed to mere theory. This transformed his approach to dealing with prospects and clients and made him a knowledgeable advisor rather than treating projects as mere additions to his design portfolio. He asked important questions about what design meant for clients’ businesses – an exercise in constrained optimization which helped clients better understand design.
Jump forward to 1999, Steve was principal of a big AE firm when a buddy from Wharton called to inform Steve that he had taken a job at a software company called Primavera. Primavera’s headquarters were 8 minutes from Steve’s house and it was the perfect time to make a big change in the middle of the dot com boom. Primavera had some of the largest customers in the industry, quality control, exceptional developers, and a developed sales channel which made it an appealing fit. In 2001, they launched the first cloud collaboration platform for construction, which is now used by almost all large construction projects.
Steve now works for Dodge Data & Analytics where he focuses on emerging areas throughout the segmented and fragmented industry to glean valuable insights for optimization and forward momentum. His work tracks the work companies, projects, and teams are performing that reliably generates scalable, reliable, consistent benefits.
Strategic Trends in the Industry
Steve breaks strategic trends into two categories: projects, and the people/processes that support those projects.
Industrialization is expected to continue ramping up as job sites become more about the assembly of well-designed and pre-assembled components and less about construction. Expect an increase in modularization, prefabrication, big data, artificial intelligence, machine learning, and automated decision making. There will be big business opportunities as product manufacturers and software companies explore tools and systems that help people make better decisions. Construction will begin to catch up with the other big capital industries out there such as aviation.
The Impact of Strategic Trends on Industry People
Strategic trends will move focus to integration and collaboration as teams pull together and take a fresh look at who ought to do something instead of who has always been doing it; shifting to partnership and teamwork over adversarial relationships. How can we as a team make the process better instead of players safeguarding process components at the expense of overall team success? Bringing more LEAN processes into construction will assist this new team paradigm.
Technology skills will continue to be important, although human communication will still be necessary for understanding critical nuances. Machines can replace some manual human efforts which optimistically enhance the use of wisdom, experience, etc. When the computer replaced the typewriter, many feared they would lose their jobs, but jobs actually increased, just in new applications.
One important human element to focus on is the idea of emotional intelligence so that we are empowered to make smart decisions while creating new cultural norms for collaboration; moving away from the traditional adversarial approach which inherently reduces trust, issue resolution, and decision making effectiveness. Emotional intelligence is a skill that can be learned and important as industrialization replaces antiquated methodologies.
Defining Trends that will Impact How Teams Work together over the next Decade
How teams take advantage of amazing emerging resources to focus on how groups can better deal with the unavoidable and inherent risk/uncertainty of design and construction will be a huge deciding factor. Teams should consider strategies of risk mitigation that move away from the typical avoid-and-transfer approach to one of understand, embrace, and manage risk/uncertainty.
Predictive analytics will help teams make important decisions towards safety, risk, and development practices. There will be enough integration between technology solutions to support integrated IT workflows that take advantage of AI and machine learning to provide insightful input for decisions and process tweaks at the right times.
Teams will become collaborative units rather than groups of self-interested individuals. The basic tenants of LEAN can be used to articulate project goals leading to a shared culture and what is best for the project.
Examples of How Processes Might Play Out
Three studies came out about the best practices for managing risks; what contractors are doing in the field that helps. One of the top methods of identifying risk in advance, as demonstrated by the studies, is by hosting a specific-focused meeting with all key players to kick off a project that addresses risk. Individuals at this meeting have built projects before and come to the meeting with the top five things that they believe will create the most risk on the project. All people are heard, commonality and unique risks are shared, and after the meeting is over the team makes a commitment to addressing the risk elements brought to light and revisit their progress throughout the course of the entire project. This takes advantage of human interaction and collective knowledge; together we know more than any single individual.
Another study went out to 81 major owners (healthcare systems, corporations, government agencies) and asked them to look back over the last five years and identify the best project along with the most average project that took place. Questions such as how they contracted, organized teams, operated teams, etc., helped researched discover common threads. High team chemistry as a component on the project appeared in 72% of best projects but only 9% of typical projects. Team members committed to all of the same goals appeared on 83% of the best projects and only 16% of typical projects. Integration amongst team members (sharing information in a structured way) appeared on 59% of the best projects but only 9% on average ones. Timeliness of decision making appeared on 34% of the best projects and only 9% on typical ones.
These are specific areas that can be implemented on every project. On a company level, it is important not to hire anybody on the team that is not willing to collaborate or who can’t keep up technologically.
Advice for how teams can be more effective in the next decade
Become familiar with the principles of LEAN construction and how they apply. Host risk meetings and facilitate clear communication and concerns communicated across team members to understand diverse ideas/needs. Set a clear vision from owners of what success looks like; do not assume that on-time, on-budget is enough to make a project successful.
One study asked owners separate of delivery teams: how frequently are you satisfied with the performance of your team? Conversely, architects and contractors were asked: how frequently will your clients tell us they are satisfied?
There was a 3x factor between percentages that said owners were satisfied vs. teams delivering satisfaction. This demonstrates the disparity between perceptions and highlights the importance of defining what success is going to look like for a project upfront. Do not assume that success is equal across all stakeholders.
What can a leader (owner, designer, and contractor) do today to be ready for the trends coming?
Be ready to keep investing in technology. Laser scanning, modeling technology, etc. will become the new way business is done and it is important to embrace early rather than looking only at short-term ROI.
Actively and consciously invest in your people. There is a talent war going on that, in four different studies, shows the difficulty of hiring and retaining exceptional people. Hire well and invest to retain. Train staff appropriately, provide them with the tools they need to succeed, and consider making technology competency training a part of the formal job evaluation process. It is important to hold employees accountable for being able to function in our increasingly digital savvy universe.
Adopt a leadership culture that allows the organization to “fail successfully.” Create an environment where it is okay to take reasonably educated risks that can tolerate failure.
Practice LEAN principles: plan, do, check, adjust.
“Nothing would be done at all if one waited until one could do it so well that no one could find fault with it.” – John Henry Newman. Go ugly early and try things, especially with young employees.
As a leader, set a clear mission. This is the best motivator for younger people. What makes your organization unique? What connects people to your organization and mission? Leaders must show this as a priority. How is your mission making the world a better place and how are your employees contributing and appreciating that mission in order to get to a deeper level of engagement?
Steve’s Biggest Challenge
Earlier in Steve’s career, he was recruited to Burt Hill, a large AE firm, to make the office profitable. Three associates jointly ran the office and didn’t know about his hiring until he walked through the door. Each had been independently lobbying for his new position which created a hostile work environment because they wanted the job. Steve needed to make his presence work with the team, or somehow get rid of them (called “driving out the ambivalence” at Wharton). He committed to making it work, participated in various team building exercises, and worked with each of the individuals to let them know that he admired them, was not there to tell them what to do, reinforced the fact the firm had great projects and capabilities, and that his job was to make each of them successful. This tactic worked and the office grew within 3 years, hiring great new employees and earning excellent new projects.
Steve’s first job in an architectural firm, H2L2, encountered a conflict where he wasn’t sure how to handle it. He asked the project manager what to do and she responded “This is a people business. Pick up the phone.” Within 10 minutes the situation was resolved and the client was thrilled. Never forget the importance of people in this industry.
Resource for Listeners
Steve has an amazing free resource for all listeners that focused on Managing Uncertainty and Expectations in Building Design and Construction. This project planning guide will help owners and project teams think about risks as they begin building projects and plan to mitigate the uncertainties that are part of the design and construction process.
- The guide is based on original industry research by Dodge Data & Analytics about the sources of uncertainty, recommendations for managing uncertainty and improvement strategies in building design and construction.
- It provides expert advice from owners, architects and contractors based on real data about their experiences.
- It includes a link to a Contingency Calculator that project teams can use to appropriately budget for risks throughout the project lifecycle.
Additional resources are the SmartMarket Reports on Construction.com.
Contact Steve Jones
Steve loves to connect people that can help each other.
Quoting Norbert Young, Steve’s employer at McGraw Hill earlier in his career, “The ideal is the enemy of the good.” Just keep trying things. It is okay if it doesn’t work out perfectly. If it is better than yesterday and is a good thing to do, do it, and make it better the next day. Relentlessly keep moving forward. Your ability to manifest this is reliant on you and your connections with other people.
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Thank you Steve and Construction Nation, we will catch you next time!