Category Archives: business model

Two Books to Transform the AEC Industry

This past week I had the opportunity to read two significant AEC industry books – one of which I had been meaning to read for several years, the other just having been published.

Building Information Modeling (BIM) and Integrated Project Delivery (IPD) are central to each of these books, whereas they were relegated to a single chapter in Barry LePatner’s otherwise excellent book, Broken Buildings, Busted Budgets: How to Fix America’s Trillion-Dollar Construction Industry.

I’ll start with The Commercial Real Estate Revolution: Nine Transforming Keys to Lowering Costs, Cutting Waste, and Driving Change in a Broken Industry, by Rex Miller et al, a quartet of construction industry professionals.

The Commercial Real Estate Revolution

I didn’t read this book when it first came out (July 2009) for one reason and one reason alone: it cost $40.

And for a second reason: I was writing my own AEC industry book ($75!) and didn’t want to be influenced by its findings.

And a third: I found a few words in the title (Commercial Real Estate + Revolution) off-putting. Sounded more 2006 than 2009.

And a fourth (I’ll get to that in a moment.)

Looking back, I should have ignored these reasons and read the book when the ink was still wet.

Observations

The foreword by Metropolis Magazine’s Susan S. Szenasy alone is worth the price of the book  $39.95  ($12 used)

The book grew out of a wide-ranging group of dedicated industry players called The Mindshift consortium (the name was my fourth reason. It sounded vaguely un-construction-like.) That the consortium (not a think-tank but a “do-tank”) grew out of weekly discussions over pancakes (the Pancake Roundtable) at a local diner grounds the book in real people with real concerns.

This book has a big heart. It’s the kind of commercial real estate book that’s not afraid to quote Joseph Campbell on the power of metaphors to induce change.

Unlike LePatner, Miller and his cohorts are not only looking to fix what’s broken in the industry, but transform it. That alone distinguishes this book.

Read Chapter 2: What Every Executive Needs to Know About Low-Bid Contracting, and you’ll never use Design-Bid-Build as a delivery method again.

The Nine Keys

The second two-thirds of the book present The Nine Keys of Mindshift, including Four Principles, Four Tools, One Hidden Revolution

Key 1: Trust-Base Team Formation (Principle) – How you select your team, whom you select, and the process you use to form them into a team is the most important component of a succesful project.

Key 2: Early Collaboration (Principle) – Clear channels of communication and efficient ways of working together must be established to ensure ultimate success.

Key 3: Built-In Sustainability (Principle) – Sustainability becomes a natural result of better design and the elimination of waste.

Key 4: Transformational Leadership (Principle) – Leadership must be flexible, trusting team members to work together and empowering them to solve problems.

Key 5: Big “BIM” (Tool) – Building Information Modeling is a game-changing technology. It facilitates early collaboration and allows the team to rehearse and resolve issues in a virtual environment that carries over seamlessly to real construction.

Key 6: Integrated Project Delivery (Tool) – The “siloed” hierarchy of Design-Bid-Build becomes a round table in IPD as the planning, design, and implementation process integrate all team members’ input and participation. Lean Construction is an increasingly important tool for team members to identify waste and measure performance.

Key 7: Trust-Based Agreements and Client-Centered Incentives (Tool) – All team members assume an equal degree of shared risk and reward, and profitability is inextricably linked to the success of the project.

Key 8: Offsite Manufacturing (Tool) – Fabricating materials offsite and in advance provides an opportunity to change the nature, quality and future of construction.

Key 9: Workplace Productivity (The Hidden Revolution) – When buildings are uniquely designed and constructed with the end-user in mind, the space created can enhance the quality of life and work for those using it and will deliver higher value to the owner. Alternative workplace solutions are one example of the mindshift model that stresses long-term strategic value over short-term transactional returns.

The authors write: “Building, at its essence, is a relational practice. It is creative. And, when done well, it is restorative.” I believe, if you haven’t already done so, that reading this book will be an equally restorative experience for you.

You can find a good summary and background here http://www.haworth.com/en-us/Knowledge/Mindshift/Pages/The-Consortium.aspx

An article providing some background by the author in DesignIntelligence here

And read chapter 1 (“The $500 Billion Black Hole”) here http://media.wiley.com/product_data/excerpt/65/04704574/0470457465.pdf

Makers of the Environment

Don’t be alarmed if you haven’t heard of this book.

Makers of the Environment: Building Resilience Into Our World, One Model at a Time, by BIG BIM little bim author, Finith E. Jernigan was released December 15, 2011 ($9.99 Kindle, though you will want a hard copy of the book so you can scan the QR code-like tags. I’ll get top those in a moment.)

Billed as “the first information model in a book” (where BIM = book information model,) Makers of the Environment is a true 3D reading experience.

You can read the book straight through or, using Microsoft TAGs spread throughout the book, link to the book’s website for richer data, videos, related articles and a deeper look into the subject at hand.

You can imagine my surprise while scanning one of the codes to find it lead to one of my own blog posts (i.e. a surreal experience.)

Read more about it here.

Observations

The book presents straightforward short chapters on various topics. These are followed by scenario plans that take place in the near future – or the recent past – and are populated by characters devised by the author. Here’s how it is described:

Makers of the Environment shows how an organization in a small, depressed rural county can pull together to take advantage of the opportunities to become a world leader in the management of information to change our world. With systems and processes such as Makers describes, we for the first time in history can define and manage real-world assets. The book’s central design future forms the backbone for three scenarios show how to use the information to improve the world.

Three of these scenarios are presented in the prologue, even before you hit the first chapter (which opens with another scenario.) It’s admittedly a bit rough-going, but well-worth the journey when you arrive at the expository writing and tags. That’s when the book really transforms (some, such as the tag on Georeferencing, are spectacular.)

The book presents a world of making or makers that is wholly inclusive and democratic. The book presents an industry where laypeople – real people – are participants who engage creatively and productively in the making and preservation of their world, and in doing so receive value directly from their involvement.

Technology is leveling the field for everyone. No longer must we rely on experts talking at us as we find solutions to today’s most vexing problems. We can all participate directly in the decisions, with real data, to get greater certainty of outcomes.

That said, one wonders if the title ought to have been Stewarts of the Environment or Makers of the Built Environment?

Some caveats: There is a great deal of repetition (whole sentences and even pages: p. 21-22, for example, are mysteriously repeated at length on p. 23-25) and the book, self-published, could have benefitted from some heavy editing and copyediting. Why, for example, are some chapters in grey background and others not? Some of the technology discussions come across as infomercials. Some of the scenarios sound as though they are taking place next week rather than in 10 years (this can be disconcerting for the reader who is constantly being asked by the text to place themselves in time.) The book’s sentences – that make up the paragraphs – don’t have a great deal of variation or differentiation in length. In this sense, the book sometimes feels as though it was in fact an information model in that it can feel as though it were written by a computer. This is a book that has enough valuable information to recreate the world – but, nonetheless, is still in search of a heart.

Kudos to the author for taking the innovative and creative route – it is always the more difficult to be a trailblazer.

It is very hard in a brief review to summarize what comes across as a comprehensive worldview – a view of the near-term future. Here’s how the book is described:

Makers of the Environment merges storytelling with everyday reality to offer a moment where we can rethink our expectations to understand how technology can and should be used to improve our world. The book makes the extraordinary ordinary, offering a vision on how society can take advantage of new and emerging technology to create a better, more sustainable world for our children.

I’ve barely touched on some of the major themes and ideas presented. You truly have to read the book for yourself to fully grasp it’s breadth, potential impact on your thinking and vision of the near-term future: the next steps for our industry and planet.

Forgiving some of the book’s more experimental and editorial shortcomings, I highly recommend Makers of the Environment for anyone and everyone working in – or around – the AECO industry.

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Filed under BIM, business model, construction industry, Integrated Project Delivery, IPD, people

BIM’s Blue Ocean

After I give one of my talks on building information modeling the question I’m most often asked is:

What’s the best BIM business model?

What is the best way to make a profit utilizing building information modeling on projects in their organization?

In other words, how can we leverage the technology to reap the greatest financial reward?

It goes without saying that they have invested a great deal of money in soft- and hardware – and time in getting comfortable with each – and now want to know what the return is on their investment.

Is it the Free business model?

The Long Tail business model?

Or something altogether different?

It’s actually a lot simpler than any of these.

It’s called “coupling.”

But we’re getting ahead of ourselves.

First, let’s take a quick look at two books that use the sea metaphor to help explain how businesses can best address our industry’s ongoing sea changes.

Then we’ll turn this metaphor on to design and construction professional’s situation to see how they can best benefit from the emerging technologies in their organizations.

C-Scape

A book every design and construction professional ought to read is

C-Scape: Conquer the Forces Changing Business Today, a book that shows how businesses can survive and thrive in the digital media revolution.

Don’t be turned-off by the book’s emphasis on media – especially digital and social media.

It’s the metaphor that’s applicable here.

The book’s storyline goes something like this:

Not so long ago, the business landscape was easier to chart.

That landscape has been upended, and in its place a “C-Scape” has emerged—a world where

  • Consumers, not producers and marketers, make the choices; where
  • Content, not distribution, is king; where
  • Curation becomes a primary currency of value; and where
  • Convergence continues to revolutionize every part of every business.

Taking a more in-depth look at each of these 4 Cs:

Consumers choose what, how, and when they consume information. This has given consumers more power than ever in the relationship with content creators and information sources. Those who don’t respect this new relationship will perish.

Content becomes king. With the Internet able to directly bring the buyer to the seller, the need to have a better product, not just one that is distributed better, will become paramount. Those who had distribution advantages will struggle so long as they are averse to focusing on competing with direct distribution.

Curation cures information overload. Businesses will need to monitor and curate conversations about their brands in order to prevent major blunders.

Convergence revolutionizes every form of communication. New forms of storytelling will emerge as all forms of communication converge on a single platform for the first time. Companies need to learn these new ways of telling stories about their products and brands.

You’ve probably experienced some of these forces yourself, on your teams and in your organizations.

There are some obvious overlaps with the construction industry.

But that’s not where we’re going with this.

While these concepts are astute, they represent the digital media’s C-landscape.

Not our own (unless you consider the idea that every organization is now in the media business.)

Design and Construction’s Seven Seas

Design and construction has its own seascape or C-Scape.

But its seven C’s don’t stand for consumers, content, curation and convergence.

Our seven C’s stand for:

  • Communication
  • Collaboration
  • Cooperation
  • Community
  • Complexity
  • Co-location
  • Co-creation

C-words, make note, all beginning with “co” – for “together.”

While Construction is another one (Coupling is as well) these 7 C’s represent our seascape or blue ocean.

Why?

Because in our profession and industry collaboration and the other six concepts are virtually uncharted waters.

Blue Ocean Strategy

Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant,

You might recall is a book where the blue ocean metaphor represents a vision of the kind of expanding, competitor-free markets that innovative companies can navigate.

Unlike “red oceans,” which are well-explored and crowded with competitors, “blue oceans” stand for “untapped market space” and growth.

A few of the book’s basic concepts – implying where we are today and where we are headed – can be summarized as follows:

  • Compete in existing market space >>> Create uncontested market space
  • Beat the competition >>> Make the competition irrelevant
  • Exploit existing demand >>> Create and capture new demand
  • Make the value/cost trade-off >>> Break the value/cost trade-off
  • Align the whole system of a company’s activities with its choice of differentiation or low cost >>> Align the whole system

BIM isn’t our blue ocean.

Collaboration is.

Why?

Because BIM has become – or is fast becoming – ubiquitous.

And collaboration is still largely uncharted territory.

For BIM to live up to its promise, we must make it our goal to use emerging technology to address analysis such as building performance and energy use.

As Phil Bernstein FAIA predicts, “as these platforms get more robust and analytical algorithms get more sophisticated the whole analysis problem moves from things we understand right now – things like airflow and the modulus of elasticity – to building codes and air quality.”

To accomplish this we’ll have to share what we know with one another.

There’s no other way for our industry – and for us – to move forward.

In order for us to achieve our goals and in order for BIM to realize its promise, we will have to first accept, then relearn, how to communicate and share information.

The best way for design and construction professionals to accomplish this is by working together.

By leveraging each other’s experience and expertise.

By keeping an open line of communication and exercising it constantly.

By looking to one another for insights and solutions.

If we are to survive and overcome the forces that are remaking the design and construction landscape, we will do whatever is in our power to learn to work compatibly and effectively.

Together.

Coupling Design and Construction

Design professionals, especially, like to go it alone.

They find the idea of sharing design input, and more so, responsibility threatening.

“Let me take it back to the office and study it” is their onsite mantra.

Concerning our desire to peel away and sequester ourselves, I love this quote from the new head of the IMF, Christine Lagarde.

Four small words that were barely noticed when she said them at the Jackson Hole Symposium:

“Decoupling is a myth.”

Making the case for the key issue for the world economy:

Everything is coupled to everything else.

As futurist and iconoclast Stowe Boyd notes, “the steps taken to date have not decomplexified the economic tarball. No real steps have been taken to make the world economic system less connected, and that is the only path to a safer world.”

Like the rest of the world and economy, we are all in this together.

Connected.

There’s no extracting any one entity from the collective.

For design and construction professionals, it’s all “co” from here on out.

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Filed under analysis, BIM, BIM organizations, business model, collaboration, construction industry, design professionals, modeling