UK expert says BAU no longer an option
3 min read
Mark Farmer, renowned UK author and commentator, told industry leaders at an ITA Leadership Forum event in March 2018 that there is a burning platform for industry transformation.
Mark Farmer, renowned UK author and commentator, told industry leaders at a recent ITA Leadership Forum event that there is a burning platform for industry transformation.
“We’ve entered a period of declining industry resilience and the industry needs to urgently transform or risk market failure.”
Mark is the author of the October 2016 UK Government Review on the need for change in the UK’s construction sector: Modernise or Die: time to decide the industry’s future.
Mark observed that the fragmentation of the supply chain has led to a loss of control, visibility, ownership and risk management. For example, organisations no longer control their own workforce, instead relying on contractors. And designers have become ‘de-skilled’ because design is completed only to the point of procurement, with the next phase managed by the successful contractor.
Mark described a resultant environment where construction costs are increasing, companies are over-stretching themselves, productivity has fallen further and there are serious quality issues.
The outcome has been reputational damage, falling customer confidence and “ongoing commercial failures of companies as they are unable to control outcomes and risk.”
“It’s counter-intuitive that the number of companies entering insolvency has increased during a period of high growth. It’s because companies have lost control; their ability to hold risk, transfer risk, and sign up to deliver on an outcome in a scarce labour market has fallen.
“Ultimately, clients’ needs and expectations are not being met and society is not getting the buildings and infrastructure that it is looking for. At the same time, we have new disruptors entering the market with new operating models. This will likely see us leaving parts of the industry behind.”
He observed that the pain in the industry – in fact, across the system – has become a catalyst for action here in New Zealand and globally. “The model isn’t working even for those businesses that are doing well. The sustainability and vibrancy of our industry is fragile and that’s why we are seeing such a drive for change.”
Mark welcomed the Industry Transformation Agenda’s role in leading change and its multi-faceted approach. He reinforced Chelydra Percy’s introduction that there were no silver bullet solutions to transform an industry facing such deep-seated and complex issues.
“The changes must be system-wide. We need to change relationships and our ways of working. It requires new thinking around insurance and financing models, changing the way businesses work together, and shifts in thinking around procurement.
“We need leadership from the people commissioning the work. We need leadership from the people who are doing the work – the construction industry. And we need government to support industry on its modernisation journey by being a progressive client through its public works programme, and policy development. But ultimately transformation will only occur if it is industry-led.”
He believes modern methods of construction are a component of the answer.. He encouraged the sector to learn from other industries and shift beyond “standardisation” towards common platforms and systems, using modern technology to deliver bespoke buildings.
He also highlighted opportunities to use weighting in procurement to drive industry change and encouraged the sector to look at developing the next generation workforce. “We have a changing labour force with a shift in skill base prompted by the industry’s need for specialisation combined with changing demographics.”
Mark’s presentation included examples of solutions in the UK including Heathrow. We’ll report back on those insights in a future news story.
Mark’s visit to New Zealand was funded by the Industry Transformation Agenda in partnership with PrefabNZ.
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Mark has nearly 30 years of experience in the construction and real estate sectors and is a recognised commentator and thought leader on a variety of issues. Mark has been at the forefront of emerging UK residential market segments such as Build to Rent and Later Living. He is also playing a leading role in modernising the construction industry through pre-manufacturing and integrated and digitally enabled delivery models. Mark authored the October 2016 UK Government Review of the Construction Labour Market Model entitled ‘Modernise or Die’.