Embracing a New Cycle of Capital Project Execution
At Day & Zimmermann, one of our core values is diversity. We believe that people of different backgrounds, with different experiences and diversity of thought create better outcomes. Research supports this notion. A few years ago, Deloitte published a study that showed that diversity of thought in particular can help companies guard against groupthink and drive innovation. How does this translate to capital project delivery?
Diversity is only a driver of success if there is an inherent agreement that everyone in the group is working together to solve problems, and that all voices will be heard. The hierarchy of past project organizations is being supplanted by more diverse contributors who bring massive amounts of data to the table that has to be analyzed and put to use effectively. According to a recent presentation given by McKinsey and Company at a Construction Industry Institute (CII) Meeting, cumulative real growth of productivity in the construction industry has lagged far behind that of other sectors over the last 70 years. While industries like agriculture and manufacturing have seen productivity growth of 1,500 and 750 percent, the construction industry has seen an increase of a measly 8 percent in that time. If it seems we’ve been having this same conversation about productivity for years, it’s because we have. But outside forces may finally be pushing the industry toward real change.
Technology is rapidly evolving and is now capable of providing the type of real-time analytics tools that will allow for better communication between owners and contractors. A shrinking labor pool is forcing everyone in the construction industry to think collectively about talent. And tight economic conditions are squeezing manufacturers and contractors alike. As Petrochemical Update’s Market Outlook 2018 put it, “If there is one predominant theme in the downstream construction industry, it is imperative that Owners and EPC contractors together address the “mission critical “issue of declining field productivity over the past four decades.”
Contractors and owners have a tremendous opportunity in this moment to finally embrace the kind of working relationship that can foster new ideas and mutually beneficial outcomes. In order to do so both parties must:
I believe the time is right for us to end the cycle of failed projects and budget overruns and start a new cycle built on collaboration and success.