In the times we live in there are very few industries that are not being disrupted and or are being disrupted again and again. Apple disrupted the phone industry by up-scaling the customer experience through the introduction of the first iPhone but finds that it will have to disrupt again to stay alive.
We are living in an age where it is reported that, 70% of the companies on the Fortune 1000 list 10 years ago have vanished and in an environment where no business is too big to fail or too small to succeed, where technology and society are growing at a faster pace than organisation and corporation can catch up.
So, it comes as no surprise to me that the AEC industry I come from is ripe for disruption. I have spoken to many leaders in the industry on the need for change and have even sent them, presentations and information on the need for the industry to change. They show interest and ask for the presentations but show no evidence of change in their organisations.
There is a feeling in the AEC industry that disruption is not going to hit the traditional industry such as Design (Architectural), Engineering and Construction and that disruption is going to happen only to industries that are doing business online. There is an assumption and confidence that AEC industry which matured in the west and taken throughout the world would be hard to disrupt.
Why should the AEC change one must ask? A few of the reasons are: Not understanding our client's business objectives; Not understanding the financial cost and the ROI of the project for the client organisation, nor addressing the time to market for the clients service or product and not Involving the client in the design and delivery thinking.
Let me explain the impact of one of the reasons: “addressing the time to market for the client’s service or product”. In Vancouver city Amazon is slated to bring in 1000 jobs and are awaiting move into one of the premium buildings being constructed by Telus an, striking million-square foot development, to be completed in 2015. What if this building was constructed faster using technology and innovative process and these jobs from Amazon comes into play sooner, what will the impact of such a speed bring to the company Amazon as well as the local economy?
In my professional experience towards the end of 190s we were able to build a 685K sq. ft, highly technological intense commercial space in 13 months from soil investigation to move in. This was before the demands of this current digital global environment and before some of the advent of some of the building technologies available today.
The AEC industry will be disrupted very shortly as the business environment which the industry is based is being disrupted. Our age old assumptions in business are no more relevant and the metrics of success are being redefined and where the clarity of words we use to discuss business, standbys like marketplace and competitive advantage, are redefined and rendered almost meaningless, makes it imperative that the industry will be disrupted. In the globalized knowledge economy where the goal is not efficiency but is adaptability or innovation or unleashing human potential where a whole new management system and tools is being reinvented, it is only a matter of time.
Some architects have started to recognise it: Architect: Rem Koolhaas in Architectural Review interview titled Batik, Biennale and the Death of the Skyscraper has this to say: “For architecture the conditions have changed more in the last 30 years than they changed in the previous two centuries, yet we still act as if it’s the same profession. There have been radical changes to so many things, such as computing power, engineering and the relationship between architect and client, yet we persist as if we are still old pipe-smoking gentlemen.”
In today’s digital global environment, disruption can happen from any part of the globe, especially from developing economics with large population base under pressure to improve their infrastructure and societies with local solutions and many cases creating crucibles for reverse innovation. Vijay Govindarajan and Chris Trimble in their book Reverse Innovation write about “reverse innovation,” in which firms create products for and in emerging economies that lead to innovative goods for the developed world.
So when I received an email from Mckinsey today, I was elated as ready an article on: How to build a skyscraper in two weeks, where China’s Broad Group Chairman and CEO Zhang Yue explains how they are revolutionizing commercial building and why traditional construction practices are outdated and how the industry can change.
He mentions in this article: “Unfortunately, the construction and infrastructure industry is the exception (Technology evolving rapidly and disrupting industries). It is antiquated and out of date. Most work is still performed manually and on site, which is costly and time consuming. For example, today a skyscraper can take five years or more to complete. When the Empire State Building was constructed, it only took about 13 months.
The AEC industry together with many other traditional industries such as Resources and Energy will disrupt shortly. What do you think? I would like to hear from you.