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COMMON CENTS

Driving Business Growth
This is not the construction industry you once knew

By Bo Mocherniak

Evolution. While the sentiment is not new to Canadian businesses, for many, the disconcerting speed of that evolution is. Every industry, construction included, is dealing with innovative technologies, shifting business models and a range of emerging risks, all of which are causing disruption in some way, shape or form.
With advancements occurring at such a record pace, identifying and applying the right growth strategy can be an increasingly difficult task, particularly in the areas of new technology and shifting workforce paradigms.
Growth as a whole has become so multi-faceted that perhaps the best way to understand it is to break it down into smaller, more manageable categories. Take, for example, grouping and assessing growth in terms of revenue, profits, confidence and capabilities, which can offer Canadian construction companies varied and valuable perspectives on developing a more holistic model.
Further to that, let’s explore four key elements to driving growth today:

Adapting to the Digital Landscape
Historically, technological change has always presented a challenge for construction companies. Adapting to innovation has been relatively slow, with construction exhibiting a smaller digital footprint than other industries.
Why is that? It could be the complex nature of the construction industry as a whole, which makes it slow to adapt to change. Firms often have multiple projects on the go, distributed across multiple complex sites, both of which make digital integration difficult. At the same time, there are often multiple sub-contractors involved, whose digital systems and capabilities vary, in turn making it challenging to implement and streamline new technologies or innovative practices.
While this may be understandable, change is continuous and can’t be ignored.
Digital technologies are reshaping businesses of all shapes and sizes and it will be at the heart of future revenue models. This is a shift that is driving opportunity but also threatening the viability of those who can’t or don’t adapt.
Going forward, companies are urged to become proficient at using technology to more holistically adapt their core business, such as cloud-based digital collaboration and mobility applications and building information modeling, where the physical and functional characteristics of a building are fully represented in digital form.
Innovation and digital technology is flourishing. Embrace it.

Automation: Improving Productivity, Reducing Risk
When done well—in industries such as manufacturing and automotive—automation can be integral to increasing profits, with its ability to improve business and production efficiencies across the board. With as much physical process as there is in the construction industry, it’s easy to see that effectively leveraging automation to drive productivity could be a game changer.
By automating with robotics and artificial intelligence (drones, driverless heavy equipment, etc.), companies can not only reduce costs through productivity gains, but also improve safety by allowing robots or machines to lead or to take over high-risk tasks. Furthermore, automation can help companies adhere more effectively to completion deadlines, as it tends to reduce the number of “human factors” that might otherwise slow the project down.
Given the long time frames construction projects tend to occupy, the savings gained—and resulting increased profits—could be significant.
Other impending advances firms can leverage to drive profits include 3D printing, modular construction, biomimicry and other materials innovations, and a range of new process technologies are having, or will have, major impacts.

Cybersecurity: Small Business Issues
If technology is on the verge of permeating construction as it has other industries, cybersecurity will only become a bigger and bigger risk. Yet, despite this, many construction companies don’t believe their industry is even on the map as a cybercrime target.
Some may say this is a risky and inaccurate assumption. Today, the industry is rife with common platforms and systems that are used to design, manage and share all forms of construction data. A skilled cyber criminal who gained access through any number of exposed areas could steal or destroy data, compromise IT infrastructure and endanger site workers’ lives.
Combating these risks by implementing a strong cybersecurity framework can actually positively influence a company’s culture and approach. In many ways, confidence is closely connected to security. Having an appropriate cyber-risk framework in place allows a firm and its people to more consistently engage in genuinely bold and creative thinking.
The Canadian construction industry tends to be composed of small- and medium-sized companies and the expense of developing adequate cybersecurity can be a real challenge. That said there are options. Firms that can’t engage around the clock protection may be able to alleviate cybersecurity concerns by teaming up to leverage a shared services solution.
Whatever the chosen approach, it’s critical to keep cybersecurity top of mind. It’s the number one risk concern for Canadian executives across industries—and the top impediment to corporate confidence. Construction is not immune.
The most effective way to mitigate risk is to be well informed and ready!

Today’s Changing Labour Force
The changing labour force is another growth factor that is impacting every company in every industry. And with construction work requiring increasingly higher degrees of technological knowledge, the competition for top talent has hit the industry with full force. As that struggle continues and the workforce skews younger, construction companies are realizing that to grow their capabilities and enhance their teams, they need to appeal to a fresh perspective.
The root of this challenge is consistent across sectors. Today’s younger workforce, millennials included, does not necessarily want the same things previous generations have wanted. Job security and higher salaries are less a concern. There are other contributing factors. The desire to be challenged, professional growth, innovative and unique business cultures, are all factors, among others, which have led to the concept of liquid labour, where workers change jobs more frequently and don’t identify with one company as “theirs,” a vast shift from the former labour force.
This group tends to be motivated by:
A sense of purpose and contribution,
Acknowledgment of their status and significance,
Work that involves and embraces the latest technological trends, and
Access to continuous learning opportunities (skills enhancement, emerging fields, certifications, etc.).
One way to address this issue is to use the concept of “purpose” to attract leading talent. This means emphasizing employee engagement and re-framing the job as an aspirational journey.

Leverage Change
In five years—or even less—the construction industry will look much different than it does today. One thing is for certain, it’s essential to stay on top of the latest technologies, methodologies and processes. Leveraging them effectively to drive growth in revenue, profits, confidence and capabilities, is what will shape winning strategies and separate the punchers from the real contenders.

Bo is National Leader for the Real Estate and Construction Group of Grant Thornton Canada, and a member of the Grant Thornton International Real Estate Sector Group. He can be reached at bo.mocherniak@ca.gt.com.

 

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