Sunday, 20 July 2014

So who pulls the So who pulls the strings?

I wrote an article recently titled "No more boom and bust." In it I referenced the problems companies such as Balfour Beatty and Sir Robert McAlpine had had with difficult projects which subsequently have impacted upon business perception and performance.

I talked about how the culture of the industy was wrong and how we have been approaching things in the wrong way for too long.

The article has been published in a few places including my own blog and on linked in.

The response has been phenomenal. So many people took the time to support and add to the article. I even had responses from senior directors at Balfour Beatty supporting the sentiment of the article.

Also when I deliver talks or speak to people generally there is huge support for change.

What is puzzling me is that if there is so much support where is the support and drive coming from for how we do things now. Who is pushing for the adversarial approach? Who is promoting disjointed procurement.

It seems to me that actually no one really believes how we do things now is the right way. I suspect there are thousands of people in the construction industry who keep doing what they are doing and what they know day after day. The reality is they neither agree or disagree they just do their job.
 
I think it's fair to day they suffer from chronic apathy. This apathy was rife in the 90s and 2000s when it was easy to do things as we had always done them particularly when this made money.

What is different now there are people passsionate and supportive of change. There is little resistance as there aren't any supporters of our current culture

There is a new breed in the construction industry today who are passsionate about a better way and who will not tollerate current behaviours

We need to continue to disrupt the industry and grow adoption by example. Those who are apathetic will then change or die.

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I wrote an article recently titled "No more boom and bust." In it I referenced the problems companies such as Balfour Beatty and Sir Robert McAlpine had had with difficult projects which subsequently have impacted upon business perception and performance.

I talked about how the culture of the industy was wrong and how we have been approaching things in the wrong way for too long.

The article has been published in a few places including my own blog and on linked in.

The response has been phenomenal. So many people took the time to support and add to the article. I even had responses from senior directors at Balfour Beatty supporting the sentiment of the article.

Also when I deliver talks or speak to people generally there is huge support for change.

What is puzzling me is that if there is so much support where is the support and drive coming from for how we do things now. Who is pushing for the adversarial approach? Who is promoting disjointed procurement.

It seems to me that actually no one really believes how we do things now is the right way. I suspect there are thousands of people in the construction industry who keep doing what they are doing and what they know day after day. The reality is they neither agree or disagree they just do their job.
 
I think it's fair to day they suffer from chronic apathy. This apathy was rife in the 90s and 2000s when it was easy to do things as we had always done them particularly when this made money.

What is different now there are people passsionate and supportive of change. There is little resistance as there aren't any supporters of our current culture

There is a new breed in the construction industry today who are passsionate about a better way and who will not tollerate current behaviours

We need to continue to disrupt the industry and grow adoption by example. Those who are apathetic will then change or die.

Sunday, 13 July 2014

No more BIM

The term BIM or Building Information Modelling has been in "general circulation" since around 2006/7. The term has done wonders for moving the construction industry towards a digital revolution. We have benefitted from improving hardware and software and emerging generations who don't see technology as an add on but a necessity.

 

Whilst the term BIM was not first used by Autodesk they invested in the term and promoted it as it very effectively communicated what they were trying to achieve with technology. Clearly with a better understanding of the value of their software and its value sales would increase.

 

From someone who has spent a career fighting against many of the things considered acceptable in the construction industry BIM and all of the associated software was music to my ears. We bought our first copy of Revit parametric software back in 2000. This was even before Autodesk had bought the company.

 

The marketing of the term BIM pushed everything up a level with the final vindication being in May 2011 when the then Government Chief Construction Advisor Paul Morrell mandated that a 3D coordination and data or BIM should be included in government projects by 2016.

 

Coupled with the mandate the government invested in the BIM Task Group who helped to define the specific requirements and what level 2 actually means.

 

Within the public sector it is still work in progress however huge strides have been made within early adopter departments such as the Ministry of Justice.

 

The private sector has identified the value itself and has embraced new technologies and processes largely off the back of the good work carried out by government.

 

However now the term BIM is far too generic and can cause confusion. It is so commonly used now that it can lose impact. This is similar to the term Partnering which was adopted in the late 90s. Many people used the term but how many people truly understood it and worked in this way.

 

We have all heard people and organisations say yes we do BIM or can you do BIM. The term is now working against the vision and objective and we must be far more specific and less generic.

 

What BIM actually was, was the catalyst for change across the construction sector. We are now in the middle of a revolution to Digitise the Construction Industry. We have to be more specific about what we are doing and what we are trying to achieve.

 

For example we will author models or federate them. We may extract data which can be used in the operation of the building. We may use the federated model to extract quantities or link elements to the programme. All of this could be referred to as "BIM" if we adopt the term how it is currently used. We often end up with lots of debate about what is BIM and what isn't or is this level 2 or level three.

 

Who cares? This is all theory. We are digitising the Construction industry so we can improve our product, process and perceptions. We must deliver better value to our clients and demonstrate we understand their business and their issues and that we are able to respond intelligently and positively.

 

 

Friday, 4 July 2014

How mad is the construction industry?

Balfour Beatty announced another profit warning to the stock exchange this week for £30million only 8 weeks after the last one.

Balfours are a great business with a fantastic heritage and some great people.I know better than most having worked with them over the past 20 years.What is happening to them is a symptom of the boom and bust of the construction industry. The challenges which Balfours are facing is why we want to "rethink your world" at Space Group.

We can't go on like this as an industry, swaying from boom to bust, gambling on who will win and who will lose. It is ridiculously expensive, stressful and means we lose any consistant improvement or skills development.

If we want to change we need to change something! 

The industry needs to fundamentally rethink its whole culture. It has nothing to do with BIM or technology but is all about culture, procurement and contracts.

I have written extensively about the different generations and their impact on change. The baby boomers have held the reigns for many years now and it is time for them to hand over to the young gen X and emerging gen Y.

If we take the Balfour Beatty story as an example to demonstrate what the construction industry goes through. In 1997 a new Labour Government was elected and on the back of a financial boom and growing tax receipts there was a public sector building boom.

By the late 90s clients had been convinced that a design and build contract reduced their risk and improved value. Builders became "contractors" The clue is in the name. It was all about the contract and the sub contracts and how these were played out rather than the process or product. Main contractors built pre construction teams who were excellent at bidding and winning work.Their delivery teams managed the subcontractors as they jettisoned their direct labour. At the same time their commercial teams grew. The risk moved to the main contractor from the client and design team which meant they held the power.

As public sector spending grew through the 2000s main contractors started to win the construction gamble. D and B is all about risk and with large budgets from government they were making huge profits. Sub contractors were squeezed so we had little skill development or investment in the industry but main contractors we becoming cash rich as they held onto cash as profits grew.

These cash piles were then invested into PFI and again they won big when clients wanted bidders to take interest rate risk. With falling interest rates PFI became hugely lucrative. This was a fantastic business model and through the 2000s shareholders of companies such as Balfour Beatty did very well.This was more of a financial model than a construction process. At Balfours Ian Tyler,accountant rather than a builder, was in charge and helped Balfours to grow revenue and profit,

However when the spending slows and the cash reduces the strategy falls apart as it is not a sustainable  model. An early example of this was Jarvis who were using cash receipts from rail work.

Construction companies have burned through their working capital over the last few years and have not been able to invest. To cover overhead projects have been bought with low margin. Again this is a  gamble and unfortunatley it is more likely you lose in a falling market. It is particularly tough on subcontractors who are squeezed at both sides. This is what has happened to the Balfour Beatty M and E business. They have gambled and lost. 

The mad thing is, that for Balfours to keep going they are selling their assets. These are the PFI assets they invested in during the boom. So by the end of this decade Balfours will have sold all if the assets which they amassed through the 2000 and will be back to where they started 20 years ago.Boom and Bust!

So who has won and who has lost.

The winners are the shareholders through he 2000s. The losers are the great staff of Balfours who unfortunatley have been through all of the pain of the past 5 years. The other loser is the construction industry. We have not moved forward, we have not improved and we have lost skills.

There is a different way. I think I will leave that for a future blog.

Rethink your world.

Sunday, 1 June 2014

BIM Reality.

Every year we attend BIM Show Live and we all leave motivated and sure that the future of construction is rosy and we are returning to our day jobs in the perfect world.

There is a significant flaw in the BIM Show Live community however and that of the UKBIMCrew on twitter.

If you decide to pay money and give up time to go to an event such as BIM Show Live you are obviously committed to a different way of approaching things. This community has grown from around 100 to 700 paying delegates in three years. The flaw is that this is only one side if the argument. For those of us who attend we only see the positive aspects of change. We miss the issues or challenges because we believe so passionately in the fact what we are doing is right.

Im not changing my view in relation to BIM and I passionately believe the industry will benefit hugely in the future. However we do operate in the real world and 700 delegates at BSL it is only a tiny fraction of the industry.

The BIM technologies team are working on many live projects across the UK across a range of sectors with different clients, consultants and contractors.

Whilst we left BSL in April all enthusiastic about the future it didn't take long for us to bump back down to earth. Several projects which we are working on continue to be challenging.

The technology is straightforward, our  issues are always with standards and consistency across a design team. Design businesses are used to having control of their own standards for their own purposes. Every consultant will have their own approach and expectations. When an Information Manager is appointed they are unhappy about using a project standard which differs from their own.

The biggest challenge at present is demonstrating why this additional effort is necessary and where the benefit will be realised. Much of this data will not be used until the  operational stage and at present we can't show or quantify the benefit.

We are asking design teams to invest upfront without being able to show the benefit to either them or the project.

A simple example is the use of Uniclass 2 and NBS create. Traditionally we would produce a drawing and at a later date develop the specification. There is now a new workflow. When you add a component to a model you ensure it has it's Uniclass reference. This means that the object can be automatically linked to the specification. This is a fundamental change and means adding the reference early. 

Some consultants have become used to pushing responsibly further down the programme. Much of the detailed specification is carried out by the trade. Effective BIM brings this forward and asks for an earlier commitment. 

Clearly this is not how consultants have operated for several years and is potential additional work they had not anticipated having to complete.

The same is true of asset management. Traditionally at the end of construction information and data is added retrospectively. We are now suggesting this can be done more efficiently at the early stages. Again no fee allowance has be made for this so there is kickback from consultants. Without being able to demonstrate benefit clearly it is always a challenge to convince clients and consultants of the value.

Construction has traditionally be a disjointed process. To achieve an integrated workflow we need to rethink who does what when. Clearly by the nature if this some will end up doing more and some will benefit more.

There are no easy answers to the challenges we face. Those passionate about the benefits of BIM must also listen to the challenges others face. We need to find ways of minimising impact to the various groups. 

Critically we must hold our nerve in what we believe and should take time to invest in demonstrating the long term benefit. 

At times there will be a need for us to carry out activities to support the argument. This may mean taking onboard tasks which others should be doing themselves. This way we can demonstrate that the barriers are not technical or procedural.

Many barriers are more about culture and reluctance to change from what teams are used to. Whilst the argument around the benefits of BIM may be won academically there is still a long way to go to embed the technology and workflows into what we do consistently across industry.

Those passionate about making a difference need to understand this and we must realise this is a change which will take time to implement. We will continue to face negativity from industry. We have to listen and to find ways around the challenges.

Wednesday, 21 May 2014

No more Boom and Bust!

Balfour Beatty has just announced that yet another top executive is stepping down after yet another profit warning. Sir Robert McAlpine, another of the UK’s biggest and best contractors, has revealed £38m losses for the year. Five years ago, Balfour was a great builder, and our biggest customer. Now it faces break-up and a possible sale.

These firms’ misfortunes stem from problem contracts, but why is itthat so many contracts are going wrong?

I believe the problem lies in the way the industry is organised and the way that its top managers think. The industry is divided into professions whose members are

taught from a young age to regard a stranger in a rival camp as an enemy they haven’t shafted yet. When I was training as an architect, I attended seminars in legal self-defence, because I was taught that the contractor is going to try to do you over. I was also told that architects are better than everybody else, and that clients were just the people who commissioned buildings on our behalf.

Meanwhile, the contractors carry on with main contracting looking to make their profit targets by squeezing their supply chains and extending their payment terms by another 30 days. They spend almost nothing on research and development, and it seems that whenever something goes wrong, their only response it to throw another chief executive to the shareholders. The result of this are businesses like Balfour that are great when they’re riding a wave of public sector investment, but struggle when the bad times come.

Set up to fail

I should say here that I’m not blaming anybody. The fact is that the system is set up in such a way that people are encouraged to behave in a selfish way. True collaboration springs from a shared goal, and in construction we tend not to have that. If I’m the architect, my goal is to get my drawing out as quickly as possible and get my fee; I’m not really bothered about helping out the M&E guy because I just want to get my bit done. If I’m a contractor, my goal is to get the building up as quick as possible, while reducing the risk and making as large a margin as I can. And if I’m a subcontractor, all I care about is getting the next job and try not to take too many beatings from the main contractor. A subcontractor has no interest in a common goal; they just want to get through the process and get their last payment.

So, how to you break the cycle of boom and bust? How do you change attitudes and organisations in an industry renowned for sticking to what it knows, even though it also knows it doesn’t work? I believe the answer is to think in a completely different way. I believe we have to start with the product and then work out the process that will best deliver it. In an industry that is driven by costs, it means focusing on value.

Let’s try it another way

The good news is that there are powerful drivers for change in the industry. The government has played its part with its plans to use regulatory and economic power.

 There are other forces at work as well, though. There is a generational change, and that is bringing a different approach to providing a product. One part of it is technical. When Sir John Egan produced his report in 1998, I was using a Rotring pen to design buildings. He talked about technology, but most of it wasn’t quite there.

The government’s Construction 2025 is, I believe, the Egan Report with a different cover, and this time the technology has transformed everything. The iPad generation are using Twitter and other social media to discuss building information modelling 24/7. They are coming together around BIM regardless of what they do, or which company they do it for. I would go so far as to say that BIM has allowed the rising generation to create Construction 2.0, which has the potential to bring together the spirit of youth and the wisdom of age. And with that comes a radically different approach to the construction process. Instead of designers, builders and building engineers, BIM divided the work into define and validate, design and prototype, manufacture and assemble, operate and maintain. And with that comes a new intolerance to skips full of waste and court rosters full of construction cases. The opportunity is there to redesign the design process and rebuild the industry around shared goals. I only hope this cultural change comes quickly enough to secure some of the great construction businesses of the UK.

 

Saturday, 12 April 2014

Easter Reading

Regular readers  will know that I usually head of ft to he sun every three or four months for some family time and some time to think. This gives me the space to consider new ideas and strategies and not be disturbed by the issues of day to day business.

On this trip I'm in Cyprus which has become a regular favourite.

When I'm away I read, which is one of my greatest pleasures. Between breaks I spend time scouring the book stores for business stories  and biographies. There can't be many I havnt read and it gets harder every trip.

On this trip I am reading the Amazon story. This is not the usual overnight technology business success story. Jeff Bezos is a clever visionary but it has taken him 20 years of hard work to get the business to where it is. He is clearly an aggressive leader and is more Generation X than Generation Y.

Also on the list is Coming up Roses which is the Kath Kitson story. I'm always interested to hear about women in business as there just aren't enough.

There are a few others on the list which  are a little more obscure!

We are Space Group.

This month we re aligned our websites and updated some of the branding of individual businesses across Space Group. This has been a gradual process to reflect the ever evolving nature of the construction industry.

We are clear about our purpose as a business; To make the world better. 

Our culture is built around our people and we have reflected this in the statement We are Space Group.

Our group message is Rethink your world. This reflects the ethos of the business which has evolved in recent years. We do not accept the status quo and challenge the norm. The word rethink is upside down to represent how we like to turn things upside down and back to front before making a decision.

As well as innovation we focus on technology and sustainability. We are not a technology business but a business which uses technology to deliver improved value to our clients and customers. We believe sustainability is an obligation on us all for future generations. The construction industry in notoriously wasteful so we want to lead by example and  reduce the resources we use every day.

The Space Group journey is an ongoing one and is in its sixth decade of the story. The business started as Waring and Netts Partnership in 1957 as an architectural practice. Located in the Gosforth suburb of Newcastle, the practice grew steadily over the following decades. 

The Partnership was an adopter of construction technology with a six figure investment in a GIS system in 1970s . Unfortunately it wasn't possible to generate the value from the technology and the hardware was ultimately thrown in a skip. 

This ultimately meant the business was scheptical of the emergence of CAD in the 1980s meaning they were a late adopter.

In 2000 a new software platform called Revit appeared in the UK and by 2005 the first building had been produced by Space using the software and by 2010 the whole group was working in 3D.

In 2003 the partnership incorporated to become Waring and Netts Limited. The business had started to diversify from just architecture into interiors, building surveying and construction management.

In 2007 after 50 years as Waring and Netts the business re named itself to Space Group and moved to a new 35,000 sq ft headquarters in Newcastle supporting its 4 regional,offices. The renaming of the group reflected the greater diversity of the business and allowed flexibility in the future.

From 2007 to today the group has continued to evolve and respond to a changing marketplace. In 2008 the global recession effected the construction market particularly badly. The business focused on its key values as it looked to secure the long term sustainably of the group.

Today the space way is at the core of the group and all of our businesses have a single purpose to make the world better.

Pas referred to above we h  ethos which is focussed on innovation, technology and sustainably. We want to lead in these three areas so we can differ existed ourselves in the marketplace.

Whilst initially Waring and Netts Partnership was an architectural practice focussed in the design aspects of the construction process we now believe to achive the best value for our clients we must have a total view of the project Lifecycle.

We developed BIG BIM in 2010 which provides a 4 stage framework for us to build the group upon. 

Space architects are regional architects with offices across the north if England. They are focussed on delivering the best results for clients to suit their needs.

BIM technologies provide BIM services with BIMstore being the leading website for BIM content in the UK. We also operate campus which is focussed in improving technology skills and 
knowledge across the construction industry. 

Our volula business designs building which can maximise performance and value through a joined up design,procurement and delivery approach.

Through rethinc.it we operate BIMcrunch.com and BIm show live to share ideas across the industry.

In 1957 Waring and Netts was an architectural practice. Today Space Group is a Building information Business. Only by developing and learning from this information will we able to make the world better.

We are Space Group.

Rethink your world.