Imagine only being able to grow productivity by 1% per annum.
Only 1% per annum…..I mean, that’d be pretty depressing, wouldn’t it?
No ground-breaking changes, no quantum leaps, no paradigm shifts, just 1% per annum.
Imagine, if you can, that this is an industry which accounts for fully 13% of global GDP (13% of all of it!). An industry which generates revenues somewhere north of $10 trillion annually, not to ignore all of the economic activity it generates too.
Can you imagine that? And, yet, for the past 20 years it has managed only a 1% gain in productivity.
Alarming? Bewildering? Astonishing? Yup, yup and yup.
Anyone guessed which sector it is?
It’s Building. Construction.
And this isn’t my opinion, I defer respectfully to global consulting powerhouse McKinsey for revealing this extraordinary piece of data.
Not only that, as if that isn’t a sufficient enough mea culpa on it’s own, but McKinsey’s research also shows that Building is the second least digitally enabled sector of commerce and industry, anywhere on Earth.
Second only to Agriculture and Hunting (and who knew that was even a thing, but there you go) but, having said that, technology enablement in agriculture is growing exponentially.
So, despite only having eeked out a 1% improvement in productivity each year across the past two decades, Building appears to have conceded that it’s hands are tied by not embracing technology as every other sector has so deftly been doing, and doing for so long.
It’s important to acknowledge here that this data speaks of an industry globally and no doubt there are plenty of companies and people embracing technology within the Building sector but across the industry, the inarguable facts (rather, the McKinsey research shows) are that there’s a heck of a long way to go.
But that’s pretty exciting too, because that’s also an absolutely enormous opportunity.
The McKinsey MGI Reinventing Construction Briefing also went on to show that if building’s pace with productivity growth could only match the broader economy, in one fell swoop it’d add $1.6 trillion to global GDP.
Massive doesn’t adequately describe it. The impact of this sector is so substantial as to be almost incomprehensible, so it’s little wonder Governments everywhere see the sector as almost a panacea for sovereign economies, and globally too. Particularly when it’s proven that for every dollar spent in building generates $3 in consequential economic activity.
With all that being the case, obviously, improving productivity isn’t simply an objective worth encouraging, it’s absolutely crucial.
And, unfortunately, that’s where it gets complicated.
You see, ultimately, sector-wide productivity growth is in truth a really granular thing.
You can’t achieve sector growth without granular growth and that comes from all participants, all of the stakeholders in the industry being made to shift their thinking.
It isn’t as though we can reinvent building materials overnight; it isn’t as though we can reinvent many things overnight but what we can do is reinvent the behaviour, habits and processes which individuals perform, and how they perform them.
Starting from the bottom up, the hundreds of thousands of SME builders Australia-wide can control, manage and improve their own productivity. Controlling that lies in their own hands and it’s simply a function of using existing tools (which they already have) differently.
Robotics, drones, material tracking and such won’t feature anytime soon on most building sites, but the tools to substantive productivity growth already exist, it’s up to builders to choose to use them.
Let’s get even moreso granular to put all of this into perspective, just think in these simple terms; each day a builder spends in the order of 2+ hours on their mobile phone. So that, arguably, for 2+ hours a day, their own productivity ceases. It isn’t just about maximising productivity growth, it’s about ensuring that there is productivity occurring at all.
You could even suggest that for the duration (combined for more than a full working day in every given week), their productivity is sacrificed just to conversation.
So, for more than a day in every week, arguably, they aren’t even paying themselves. That’s clearly madness, but it’s also fundamentally true and having done the granular research, in the field, I can testify to the fact that it isn’t just an observation, it’s the truth.
I said before that it’s about reinventing the behaviour, habits and processes of builders. More importantly though, it’s about reinventing their desire to do so.
I suspect that ultimately what will drive (and which we’re actually seeing every day) that productivity shift, that behavourial shift for builders everywhere, will simply be the needs and expectations of consumers.
And isn’t that the truth. The degree to which any organisation, any brand, any company, any person responds to the needs of consumers is what determines their success.
When consumers are saying, so loudly and clearly, to builders that they want to be aware of what’s going on; that they want to be updated regularly; that they have every right to know what took place on a given day against what was planned; and to have visibility of project communications to be assured that the machine they’re paying for is indeed well oiled.
Simply by taking advantage of their mobile phone and using mobile first tools with which to communicate, collaborate, coordinate and control projects, builders aren’t just improving their own productivity (by as much as, phenomenally, 20+%), they’re proving that sector productivity growth can be realised and that it can all coexist with customer satisfaction at the heart of everything.
Sector wide step change in productivity might not happen overnight but there’s no doubt that it can, that it is, already beginning to happen.
© Tony Huxley, Trabr Limited 2020
