In just over 8 weeks the construction industry has gone from pariah’s, wantonly disregarding the stark warnings of COVID-19 and continuing to “remain open for business”, to the hallowed place of key strategic partner in the governments plan to reignite the economy. It has been an interesting journey, and here is my perception of it.
On Wednesday 13th May; with England nervously easing out of the ‘Stay at Home’ Lockdown initiated on 23rd March, the Housing secretary Robert Jenrick promised to “reopen and renew the housing market and our construction industry”. However, to be completely correct, the construction industry in England is not actually, “Returning to work”. Unlike Scotland, England has encouraged the industry to remain working throughout the Lockdown, regardless if a project was deemed ‘critical’ to the Government, or not.
THE GOVERNMENT’S PLAN
Now, GDP from Construction in the UK reached an all-time high of £29.64 Billion in the first quarter of 2019. So unsurprisingly, a thriving construction industry is critical for the economy, hence the government had to keep construction working throughout the initial phase of Lockdown.
Likewise, construction is vital to the Government’s strategy to kick-start the economy. All whilst the other sectors return to work in a phased manner, in line with the restrictions of the five Alert Levels of COVID-19.
Although a commendable plan of action, the reality is that according to one survey, up to around 65% of UK sites; by value, ceased production after 23rd March and it will take a little time yet for all sites to fully reopen. Even once fully reopened, as the esteemed construction economist Noble Francis has stated, because of the restrictions of social distancing, construction productivity has fallen by around 30-40%.
It is not just within the hoarding of a construction site that social distancing is restricting construction productivity. Two such hurdles for the workforce to overcome before they enter a construction site are: avoiding public transport wherever possible; the multitude of the workforce who traditionally ‘worked-away-from-home’, but cannot return to their ‘places of work’ until the closure of hotels and B&B’s is lifted.
The fall in construction productivity due to social distancing restrictions means projects will quite naturally take longer and therefore an increase in their out-turn costs will follow suit. This in turn raises serious questions of who will pay for the additional cost on a plethora of existing contracts.
We also need to consider that in the lead up to COVID-19, the construction industry was grappling with several ongoing challenges. Quite apart from the fall-out from BREXIT, there was the Grenfell Tower tragedy, resulting in the government’s Building Safety Programme, the removal and replacement of unsafe non-ACM cladding systems across the country. More recently it has come to light it shall disrupt not only high-rise buildings, but also Hotels across the land.
Also, since the turn of the decade, construction has fought a losing battle with the overrun of programme times and the associated cost plans. All whilst the cost of construction was rising and the never-ending search for that ‘Right-First-Time’ Quality Assurance remained as elusive, and as costly, as ever. In fact, so elusive and costly, that research by the Get It Right Initiative (GIRI) revealed that the direct cost of avoidable error in construction is close to £21 billion per annum.
GIRI’s findings were of course hard on the heels of the government commissioned Farmer Review of the UK Construction Labour Model. A report so castigating, specifically regarding construction’s inability to innovate, it is commonly known by its subtitle, “Modernise or Die.”
We must consider Health, Safety & Wellbeing. For 2018/19, the HSE reported 30 people were killed on UK construction sites. Potentially the drop in production may have a positive impact, with deaths and serious injuries reducing in tandem.
To further compound these major strategic issues for the industry, the Office for National Statistics (ONS) has stated that the UK’s construction workforce is aging and there is a skills shortage.
In summary; the reports and findings of Grenfell, GIRI, Farmer and ONS have a common theme that points an accusing finger at construction’s dubious culture, highlighted by Dame Judith Hackitt’s withering remark that post Grenfell, “A wholesale and lasting culture change is needed in the delivery of buildings.”
WHAT THE CHALLENGE IS NOW
In my honest opinion the ‘pre-and-post pandemic’ challenges that the UK construction industry faces are not insurmountable. They could be construed as the golden opportunity for construction to nurture its relationship with government and thus evolve to be the Golden Child, and lose its reputation as the Whipping Boy for good.
However, as stated above, Housing secretary Robert Jenrick’s promise to “reopen the housing market and our construction industry” was a little off kilter, and his “renew the housing market and our construction industry” claim although much needed, maybe a little premature, requiring not just chutzpah, but the determined and focused application of appropriate concepts of change management vaunted by Systems experts.
It would be surprising if production output even drew close to pre-epidemic levels, let alone be on an equal footing, for some considerable time. All because without a suitable vaccine, the restrictions of social distancing noted above, will definitely have a serious and ongoing impact of productivity, which in turn impacts both cost and quality.
The Jury is still out on Safety, but we should expect a negative impact on both Health; the ONS official statistics show construction has a higher rate of coronavirus deaths compared to many other sectors, and Wellbeing due to the high levels of stress and anxiety that will be generated by post pandemic construction on its workforce, and also its management.
HOW THE CHALLENGE SHOULD BE ADDRESSED
Well, COVID-19 has led Construction to be involved hand-in-glove with the government to overcome what Horst Rittel and Melvin Webber termed a ‘Wicked Problem’, i.e. innumerable causes, is tough to describe, and does not have a right answer. Plus, more-over, cannot be solved in a finite period by applying standard techniques. Wicked problems are a common by product of unprecedented challenges, such as COVID-19.
In the eyes of renown Systems experts, the resolution of such a wicked problem that construction and the government are tackling requires this: –
Adaptive Leadership from the Government – Ronald Heifetz and Marty Linsky’s model of facilitating problem definition and creating multi-stakeholder environments. Poignantly for ‘modernise-or-die’ construction, it does eulogise experimenting.
Key traits being the capacity to create an environment that embraces diversity of views, taking advantage of such collective knowledge, plus understanding this is a major change, gradual in process, calling for persistence and a willingness to bear the pressure that will most certainly come with it.
Open innovation – A term coined by Henry Chesbrough promoting collaboration with people across organizations. A cultural break from the silo mentality and the secrecy traditionally associated with corporate R&D culture and, unfortunately, construction as an industry.
The subtle, but deeply significant change for government, is meeting the challenge with society, not for society.
Embrace the Concept of Disruptive Innovation – First defined by Clayton Christensen, it refers to a concept, product, or a service that either disrupts an existing market or creates a completely new market segment. This type of innovation is seen as high risk and probably involves new technology and/or a new business model.
Most telling and highly relevant to the construction industry, that was deeply troubled prior to COVID-19 and is currently all but becalmed by COVID-19, is the resounding belief proudly extolled by an organisation that are a major and extremely successful exponent of disruptive innovation: –
“If you aim to disrupt an industry, you must be willing to disrupt yourself.”
Therefore in answer to the scathing synopsis of Dame Judith Hackitt, Mark Farmer, et al, and to enable Robert Jenrick to truly “renew the housing market and our construction industry”, here’s to construction finally disrupting itself and casting off its much maligned culture.
Thus a partnership built on an alignment of interest with the government would bring about that “wholesale and lasting culture change” required to bury the Ghosts of construction’s past and herald the birth of a highly collaborative, technology enabled industry, hallmarked by its diversity and inclusion, that is coveted by the smartest and the brightest talent that there is.
So, just as I said, the challenge is not insurmountable, if we give it time.
About Elvin Box
Commencing his multifarious career as a Craft Apprentice, Elvin is now Chair of London Constructing Excellence, an acclaimed Organisational Design Consultant, international Business School Tutor, Facilitator, Speaker and Writer, renowned for his expertise in utilising creativity to enable innovation and business improvement.
An Executive for multi-national construction organisations in the fields of construction, project and program management, plus Information Systems and Business Development, Elvin has worked internationally across a multitude of sectors within private, public and third-sector organisations, working in the field of Organizational Development (OD) i.e. improving efficiency, expanding productivity, through creative problem solving.