The aggregates and construction sectors are being disrupted by wide-scale social, economic and political forces, but adoption of the right technologies, processes and mindsets has the potential to turn the disrupted into the disruptor – and drive new profits at the same time.
What sounds appealing in one industry can be downright terrifying in another. For example, for those of us in construction, ‘move fast and break things’ is perhaps not as appealing a catchphrase as it may have seemed in the world of software. After all, we have legal responsibilities and professional reputations to think about. Nonetheless, the idea it is an attempt to encapsulate – that a positive, active attitude to change generates results – is sound enough.
And whether we like it or not, disruptive change is all around us, from the fallout of the coronavirus pandemic, through ever-tightening sustainability goals demanded by politicians, the public and even investors, to new technologies transforming the face of industry.
Today, real changes are underway in how construction projects are delivered. Fortunately, there is a roadmap: the shift is not dissimilar to what other industries have already experienced, from new sustainability requirements, to increased cost pressures, skills shortages, and digital transformation, and even the introduction of new materials and methodologies.
The key to a successful response is to look ahead and transform the value chain. Consultants, McKinsey estimate that a $265 billion annual profit pool awaits disrupters in the construction sector. In the process, the entire industry could be upended. “A value chain delivering approximately $11 trillion of global value added and $1.5 trillion of global profit pools looks set for overhaul,” according to its 2020 report “The next normal in construction: How disruption is reshaping the world’s largest ecosystem”.
Key disruptive forces include:
- Increased total cost of ownership (TCO) pressure
- Evolving demands regarding performance and sustainability
- Skills shortages and changing logistics
- Innovations in materials and processes
To face this, businesses need to adapt by becoming lean and agile, able to respond to client demands and the realities of projects. Practical strategies to respond should aim to not only face disruption, though, but also drive it by delivering added value for clients and staving-off the threat by partnering with change enablers. This way, through investment in the right technologies backed by real R&D and adoption of a forward-looking mindset, the site will be transformed rather than disrupted.
Most of all, though, construction businesses need a trusted adviser to help them navigate the benefits of an uncertain future. Perhaps disruption isn’t all bad.
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