Articles | The Why for Change in an industry undergoing radical t

 

 

 

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The Why for Change in an industry undergoing radical transformation

 

 

 

 

Businesses remain squeezed on margin, with responsibility for escalating labour and materials costs routinely pushed down from the top table to the local subcontractors. Current industry practices require six days of family-unfriendly work hours, with the grind often spilling over to the seventh day as owners desperately catch up before the start of the next work week. Employees are expecting ever higher salaries and will rarely hesitate to leverage a better offer. And with Reserve Bank Australia’s assessment of the construction sector as contributing close to one-quarter of all business insolvencies, increasing receivables provide a constant reminder that the business may be heading underwater.

The debate

A wide-ranging debate rages in engineering and construction, regarding the extent to which the industry must change to align more closely with contemporary business practices and the broader expectations of the world in which we live. 

The debate concerns a raft of challenges facing the industry, with highlights including win/lose versus collaborative behaviour, transformation in industry productivity enabled by technological innovation, and cultural reform with respect to diversity and inclusion.

Of particular note, the war for resources – with the Australian Constructors Association citing a shortfall of 105,000 construction workers by 2023 – has morphed from the traditional East Coast transportation and utilities infrastructure versus Western Australia mining industry challenge, to an international competition for skilled labour and technical resources. I can’t help thinking the issues touched upon above are inextricably linked.

On the ground though, many civil contractors are asking themselves: will things ever change?

Old school

What is equally clear, is that the “old school” management approach to getting the job done, with the stress of deadlines passed down the line in an increasingly aggressive tone, will no longer be acceptable if tomorrow’s talent is to be attracted to an industry in chronic need of more talent.

Rest assured: transformational change is coming, and with it the risk of business obsolescence, relegated to the role of a minor player in a corner labelled “yesterday’s industry”.

What should a motivated business owner do about all of this?

Management system

Sustainable businesses have at their core, an effective and efficient operational management system. This management system comprises what I refer to as 4 Pillars:

  • Pillar 1: Product capability and fit

  • Pillar 2: Revenue channels and sales processes

  • Pillar 3: Operational functions

  • Pillar 4: Business Assets

The business capability embedded within this framework has as its basis:

  1. The right people

  2. In the right roles

  3. With the right skills and experience.

The best way to enhance the capability and productivity of the people in your business is to train them! Specifically, train your managers in the skills required to build, manage and lead high performance teams.

Many business owners argue that business growth in capability is all about upgrading the current people in line with evolving requirements – an expensive approach in this current environment! Modern enterprises must also harness technology to expand capacity, improve productivity and leverage the capability of their existing personnel.

Accordingly, sustainable modern businesses require fit-for-purpose technology and aligned business processes. Indeed, a key measure of business productivity is the extent of alignment between people, IT systems and processes.

ABOUT THE AUTHOR

Peter Wilkinson BE (Mech), MBA (AGSM), FIEAust, EngExec, MAICD is the founder and director of SamWilko Advisory, providing leadership, coaching and advisory  services to small-to-medium-sized enterprises, corporate business and government in the Transport, Construction and Consulting Services sectors. Author of “The Steel Ceiling: Achieving Sustainable Growth in Engineering and Construction” and with over thirty years’ experience, he has worked in the infrastructure, transportation, utilities, mining, defence, and property industries, across Australia and internationally.

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