The Budget has not delivered the knockout blow to the construction industry through the further scaling back of public work as some predicted. The public sector accounted for 40% of industry turnover in recent years, but represented an even larger proportion of some contractors’ output.
But as with all challenges comes opportunity. The largesse that the previous government showed to the industry paradoxically prevented it from achieving the sorts of efficiencies that were set out in the Egan Report. With so much work to go around, our industry became pretty expensive compared to some in Europe. Indeed, Paul Morrell recently commented on the fact that some new schools have cost about £3,000 per sq m compared with others that cost £1,500 per sq m.
So it is pretty clear that the industry still has some way to go. CIOB president James Wates said last month in this journal that the challenge for the industry is to do more for less.
But doing that involves more than just cutting prices. It is about doing things differently. Six weeks ago, two CIOB scholars presented the findings of their research projects (CM June, p5) which included a presentation on how contractors capture innovative ideas on projects. The results were pretty damning: 50% of the great work being done to solve difficult challenges was being lost. Where it was being captured, for instance on the company intranet, there was no systematic way of ensuring it would be used in future.
Companies are going to have to adapt and work smarter. Solutions to problems will need to be captured in a systematic way and made available for future teams so that they have the benefit of learning from others.
Innovation can also extend to how we train and develop our people. I recently visited the ACT–UK centre
in Coventry, which offers simulator-based training for managers and the chance to learn and make mistakes in a safe environment. Do you spend money to train people to get it right, or spend money to deal with the problems that poorly trained people create? It’s a no-brainer.
But some will try to hang on in the hope that things will revert to how they were in the past. Evolution tells us that those that fail to adapt to the environment will become extinct. It has not exactly been a secret that boom of the last 13 years had to come to an end.
