How do contractors innovate?

Will Mann: What is the most important benchmark for your organisation when introducing innovation and how do you measure this?

Paul Gandy: Wearing my contractor hat, the driver has to be the bottom line. That does not always mean immediate returns, but we must understand whether an innovation or investment will increase productivity, help win work, or importantly, de-risk what we do. R&D tax benefits are not the driver, although they are an important consequence of doing innovation properly, and essential support given the low margins in construction. There’s recognition that payback on innovation is rarely immediate. It can take years.

Eve Bader: For SES, digital is core to our business strategy. Our objective is to make SES a digital-first business. We benchmark innovation against three questions: Will it improve project performance and delivery? Will it create a business differentiator? And will it enable digital decision-making?

Dr Zainab Dangana: For Wates, innovation is integral to delivering value and helping customers and the business achieve net-zero targets. We identify products, put them through due diligence to confirm performance, and then pilot them on our sites. Our benchmark is the impact technologies can make – whether carbon reduction, water savings, or other measurable benefits.

Andy Lever: At Geberit, we approach innovation slightly differently because we are a manufacturer. Returns on investment matters, but many products we launch focus on improving working methods, saving time on site while improving quality and reducing risk. We’re also obsessive about sustainability. Our long-standing eco design principle is that every product should be ecologically better than its predecessor.

Antony Corbett: Whenever we develop a product, we always consider the installer – how to make installers’ lives easier, more efficient, more productive. Our Flowfit piping product is one example, differing from traditional systems which require welding or soldering. For us, innovation is about making things easier, faster, greener and safer.

David Philp: For Bentley Systems, innovation is change that unlocks new value. The most important benchmark is whether innovation has a direct impact on the project, and whether it endures across the asset lifecycle.

Every organisation views value differently. In my contractor days it was programme, cost and quality. Now we consider ESG and wider social value. We spend time understanding what value means to the client.

Colin Bell: At Kier, we’re on a journey toward being “naturally digital” – everything digitally connected. It’s hard to name one benchmark, so I think in terms of four strategic themes:

Innovation must solve problems. Define the problem, involve experts in solutions and launch innovations with strong internal support. Metrics include client outcomes, repeat work, time reduction, waste reduction and better procurement.

Steffan Speer: Morgan Sindall looks at three themes when considering new innovations.

First is perfect delivery – delivering projects on time, with the right quality and safety, so we earn repeat work.

Second, responsible – enhancing our people’s careers, benefitting communities and delivering wider social value.

Third, consistency – because if we’re being consistent, then we can challenge the status quo. Even a 1% improvement matters.

Benchmarking depends on the innovation. We face skill shortages, so we need innovations that make work easier, faster, better, greener and safer. If we cannot benchmark innovation against those measures, we should not pursue it.

WM: What are the key innovation drivers – compliance, legislation, building safety, sustainability – for your organisation?

ZD: My focus is sustainability – how we can help customers achieve their net zero targets and how we do so as a business. Legislation strongly drives this, and it changes every year, increasing complexity. For example, Biodiversity Net Gain is a new development requirement that has just been introduced.

AC: Customer needs. Our products are manufactured in Germany and Switzerland, but we must ensure they are right for the UK market. Sustainability and Environmental Product Declarations are key drivers. Our FlowFit piping system is designed to save time, energy and water. These are core considerations for product launches.

Our products are also BIM-ready so can be used directly in project models, which helps our customers improve productivity at the design and construction stage.

CB: I’m not sure the Building Safety Act drives innovation, but it shines a light on basic processes. When you shine that light, you see the cracks – and those cracks become opportunities for improvement and innovation.

At Kier, we are focusing on data and connected processes for meeting the golden thread requirements. This is useful not just for internal teams, but also for the regulator, so when they ask for gateway two information, we can get there quickly.

That might not sound like innovation, but it is changing how we think about auditability and regulatory compliance.

AL: From a manufacturer’s perspective, it seems the industry is hugely confused about what the Building Safety Act really means. We’ve had to think differently: innovations must now fit into a legislative framework, answer those regulatory questions and educate the market. It’s why our products are designed to meet rigorous standards.

SS: The key driver is what our customer wants, whether that’s the supply chain or our own people, depending on where we sit in the business. From the business perspective, if we don’t innovate and think about the future, how do we stay relevant?

WM: How do contractors work with suppliers to identify new innovations and new products?

SS: A vast proportion of our work is carried out through our supply chain, and a large proportion of that work involves contractor design. If you haven’t got the design nailed down, the last 5% of design resolved on site will hurt you.

So we must work with the supply chain to understand how we actually build it – that then leads us to product innovation.

Every contractor wants early engagement. We know we can support and drive a better outcome if we’re involved earlier, but we sometimes have to persuade our customers because of competition or procurement rules. We’ve got to work together on collaboration – whether it’s product, process or technology.

CB: We receive many requests to look at technologies. Often the answer is unfortunately: ‘I don’t have time today, come back in six months’ – and sometimes it never comes back.

But occasionally, someone brings something that unlocks so much. In an industry working on margins of 1%, even a 0.1% improvement is a hell of a lot.

Here’s an example of innovation from shared opportunity: at HMP Five Wells in 2019, we worked with PCE using a tool called Ynomia – a component-tracking system based on MMC and concrete panels. We had a rough process, but it worked – tracking manufacture, installation, certification and so on.

We took that into 2022 for HMP Millsike, tracking 11,000 concrete panels with a 19-step process covering manufacture, quality checks, installation and delivery – all through RFID tags. From an innovation perspective, it improved quality – 97% of panels arriving on site were installable. It also provided visibility – you could see where every panel was.

That changed responsibility and dynamism in how we construct. We reduced the programme significantly from that one thing.

DP: The biggest change I’ve seen in my career is how digital has enabled better collaboration within the value chain. It has moved us away from purely transactional relationships.

We’re seeing the creation of virtual organisations or virtual projects – large programmes bringing together different contractors and vendors. Digital platforms create the infrastructure for enhanced collaboration.

We’re working with Bechtel on a project to create digital twin environments. Instead of trialling something for a year to see if it works or fails, we focus on proof-of-concept and proof-of-value. Not just “does this work technically?” but “does it deliver value for each use case?”

EB: In digital transformation, innovation influences cultural change. Our team’s skill sets are not off-the-shelf and we need a common language to connect data, integrate systems and collaborate. Upskilling is vital, taking people on the journey, not forcing change on them. They should feel excited to work smarter.

CB: When you have a client who is in the mindset of “show me how you can deliver better outcomes”, it is amazing how that acts as a real touchpaper for everyone.

PG: I spent a lot of time working with big construction management projects in London 20 years ago. Working for customers like Stanhope – if you weren’t engaging with your supply chain from the very start, selecting and working with them to innovate in methodology and product, you weren’t going to be in the game a second time.

WM: What are the barriers to innovation?

DP: One of the problems with construction is that people think at a project level. But if you look at the water sector, where they work with five-year procurement cycles (currently AMP8) and mature clients who are good at setting their “North Stars” (major business objectives), you have five years to bring in innovation and make it stick. That’s fantastic.

We’ve developed a scale on the CIOB innovation panel, similar to NASA’s Technology Readiness Level (TRL), from 1 (basic idea) to 9 (market ready). So a supplier might have an innovation that scores high on the TRL, but does it have the relevant contract models or cultural change in place? We try to bring those two together.

PG: There is a conservatism in the industry, for good reasons. It’s driven by concern over unproven performance and historic failures, for example, asbestos was seen as the magic solution when it was introduced, also the issues that arose with concrete flat panel buildings built in the 60s and 70s.

SS: Nobody wants to be the next Blockbuster or BlackBerry. But we’re in a highly competitive market and margins are low. Another challenge is implementation – actually getting ideas sustained and adopted by everyone. People always have to come first, then process, then technology. We sometimes re-engineer that order so technology comes first, and that’s when problems come.

AL: From a manufacturing perspective, we see exactly what you’re saying. We bring technology innovation to the market with 150 years of track record of quality products and still it is incredibly difficult to break that barrier. We can demonstrate and test a product, but adoption still struggles.

ZD: For me, the barriers are that we put suppliers through the process, but the team is still concerned about the higher upfront cost. Often we are involved late in projects where specifications are already made.

Retrofit tech or software is a quick win because you can remove it if it doesn’t work, but building materials are permanent.

Additionally, the Building Safety Act has raised liability concerns which means people ask more questions.

CB: There are other barriers we haven’t touched on – data sovereignty, government standards around where data is held, cyber processes. We can’t just use a US product if its data is stored there. It won’t scale across projects.

PG: There is a lack of standardisation in manufacturing data, product labelling and positive description. That standardisation is the foundation we need, especially as we talk more about AI.

DP: I’ll talk about knocking down barriers. Professional bodies play an important role because they think about industry advancement. The CIOB AI Playbook is an example – consistent routes to building a strategy and taking it to market. Demonstrating use cases and benefits allows boards to see value. Challenges like AI and climate change aren’t problems one organisation can solve – we need to do this together.

EB: We all have similar challenges and are trying to innovate our business processes. It’s about people first, then process, then technology. The technology is there, but it’s only as good as the people who use it. Coming together and sharing best practices is important.