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Business - Written by on Monday, April 20, 2009 18:47 - 5 Comments

Kevin Morris
Wikinomics and the Construction Industry – “We Gotta Get Naked”

Having worked in the construction industry for the past few years, I’ve interfaced with firms involved in the building process at all levels – from general contractors who manage construction on-site, to architects and designers, to small machine and metal fabrication shops. As a Net Gener, I have always found it frustrating to not be able to use the tools and applications that allow me to work as collaboratively as I do with clients or co-workers in other industries.

While there are always exceptions, wikis, blogs, social networks and other collaborative applications are almost non-existent within or between construction firms. This surprises me, especially given that construction appears to be a highly collaborative industry by nature. Just think of the large number of firms involved in any given building project, with constantly changing information that needs to be disseminated quickly and efficiently in order to avoid costly errors related to materials, labour, transport and safety. Judging by this, a construction site should be a breeding ground for collaborative applications and information sharing.

Nonetheless, the adoption of these tools seems slow for the industry and as it turns out, I’m not alone in thinking this way. Construction lawyer Barry LePatner, author of ‘Broken Buildings, Busted Budgets’, goes so far as to label construction as “the industry that time forgot”, citing case after case where project delays and budget overruns could have been avoided or mitigated with a more collaborative design & build process. LePatner explains the slow-to-adopt nature of the business in the introduction to his book.

“Much like the flattening of the world described by Thomas L. Friedman, the impending use of the latest technology, global implementation of new materials and building systems, and long overdue research and capital investment will radically alter the construction landscape in the next ten to twenty years. The construction industry today is the last major industry in our world to remain “mom and pop”. It is an industry that shuns risk at all levels and hordes information on its day-to-day operations.”

When I stand back and examine construction as an industry, a few things come to mind which begin to paint the picture of why construction has been so slow to adopt:

  • Because most firms involved contribute via either the production of physical goods or supply of skilled labour, they carry a substantial amount of overhead, conduct business in a relatively small geographic region, heavily rely on providing labour in the field & on-site, and as a result, experience relatively low profit margins.
  • Construction is not scalable the way other manufactured, knowledge or information-based products are. With the exception of pre-fabricated, modular homes, it is rarely the case where a single design is constructed in a controlled environment over and over again.
  • This results in risk-averse production and R&D. “Why invest in the required innovation on this project if we may never face a similar situation again?”

Despite all this, there have been some signs of a light at the end of the tunnel. Perhaps explained by the emergence of low-cost, web-based collaboration tools, or the fact that we find ourselves in this economy, I’ve noticed a recent flurry of adoption of new technologies and business practices in construction-related organizations:

EllisDon Corporation

Geoff Smith, President and CEO of EllisDon, one of Canada’s largest general contractors, recently started blogging from the company’s website. In his recent post titled ‘OK, I finally get it: We gotta get naked”, Smith says:

“I have struggled for a long time with the notion of wide, free, open collaboration….But I have realized that if you want to take everything in, you need to give everything away. If you want to benefit from the global construction community, one revelation at a time, you have to be willing to help others as much as you can, openly, freely. We are now taking every step we can to open up our website, to open up our experts and databanks, to make everything we have accessible to everyone, to invite everyone to come talk to us by offering to tell them everything we know. It’s so obvious to me now, I can’t believe I was so stupid for so long.”

Open Architecture Network

Another great example is the work Open Architecture Network is doing. A result of winning the 2006 TED Prize, Cameron Sinclair started Open Architecture Network as “a clearinghouse for designs…where communities can connect with designers and donors, and where builders can manage a project from start to finish, with timelines, commenting tools and forums. Clean design and a powerful backend make the network accessible to anyone worldwide, while Creative Commons licensing allows projects to be sampled, remixed and customized.” An excellent video is Cameron Sinclair’s original TED talk explaining ‘open-source architecture’.

Bechtel

A recent article in BusinessWeek featured an interview with Geir Ramleth, CIO of Bechtel, outlining how he helped the largest engineering company in the United States rebuild their entire corporate network in hopes of making data more accessible. Influenced by companies like Amazon, YouTube, Google and Salesforce.com, Bechtel built three of their own data centers in an attempt to develop an internal network in the ‘cloud’. By arming employees, contractors and partners with smart devices, these workers were then able to access the data they needed through on-demand, SaaS (Software as a Service) applications. At any given time, up to one third of people with access to Bechtel’s internal network are not employees of the firm. By altering the way Bechtel engages with talent (in a fashion closely aligned with the eight norms of the Net Generation), the company is finding that less training is required for new workers and is providing a drastically improved user experience for those they do business with. Impressive for a 110 year-old construction company!

While these may appear as only incremental innovations to those in the software, technology, web or other quick-to-adopt industries, they are breakthroughs for the construction industry, and it will be interesting to see how things progress in the coming months and years. What other industries face similar challenges in ‘getting naked’? Do my reasons for slow adoption apply there as well? I can think of one well-known example where an innovative CEO, inspired by the open-source model behind Linux, used the principles of Wikinomics to turn around his failing mining company. What are others?



5 Comments

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Ben Ziegler
Apr 21, 2009 12:03

Kevin,

Thanks for this post. Excellent links you’ve provided. Good observations about challenges facing the industry. The Ellis Don president suggests the potential benefits of collaboration are worth the risk of opening up as an organization. As a mediator, with a background in IT and construction, I can understand his enthusiasm. I think the expansion of the construction industry’s online collaborative practices offers tremendous upside, both for the industry and society-at-large!

Stephen
Apr 21, 2009 17:47

…Get Naked !! …it does seem so true, doesn’t it. You have to let go of everything in order ti adapt…give in order to receive…
Great post and cross-references – Thanks !!

Geoff Smith
Apr 22, 2009 11:07

….Now I just have to convince everyone at EllisDon of the benefits of ‘Getting Naked’. It’s hard enough getting external ‘partners’ to open up, harder still when our own internal resistance is hard to overcome – old habits die hard (and anyone who says otherwise is fibbing). We aren’t where we need to be yet, but we will get there…Enjoyed the blog immensely.

Sunil Malhotra
Apr 27, 2009 1:15

Getting Naked should be easy for ElliDon, Geoff, going by the fantastic content I saw on your website. Great value system that marks the coming times. EllisDon will be at the forefront of creating the history of the future!

John Poole
May 4, 2009 20:43

I agree, we need to break the A/E/C industry down to nothing but our birthday suits and then weave and sew a new wardrobe of culture and operation. The problem is that Mom and Pop are still hanging on for dear life and won’t let go. They will eventually have to, and that is when we’ll make some real progress.

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