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What the Future Looks Like for the AEC Industry

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The crisis today in the AEC industry is the result of converging forces for over 60 years. What are those underlying forces and what will the future look like. …

The crisis today in the AEC industry is the result of converging forces for over 60 years. What are those underlying forces and what will the future look like.

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  • 1. A new way of looking at an old problem. Thursday, February 4, 2010
  • 2. Thursday, February 4, 2010
  • 3. The Medium is the Message Thursday, February 4, 2010
  • 4. What is the Real Crisis? Thursday, February 4, 2010
  • 5. Thursday, February 4, 2010
  • 6. Thursday, February 4, 2010
  • 7. Thursday, February 4, 2010
  • 8. Thursday, February 4, 2010
  • 9. Thursday, February 4, 2010
  • 10. Symbolic Realistic Conceptual Contextual (Hack/Mod) Thursday, February 4, 2010
  • 11. Thursday, February 4, 2010
  • 12. Oral Holistic, Circular, Symbolic, Interdependent Print Linear, Sequential, Rational, Autonomous Broadcast Fluid, Fragmented, Emotional, Isolated Digital/Interactive Holistic, Non-linear, Whole-Brain Systems Thinkers, Interconnected Thursday, February 4, 2010
  • 13. Digital Immigrants Digital Natives Thursday, February 4, 2010
  • 14. Thursday, February 4, 2010
  • 15. 2008 Boomer 50% Over 65 6% Millennials 6% GenX 38% Thursday, February 4, 2010
  • 16. Thursday, February 4, 2010
  • 17. 2018 Millennials 43% GenX Boomers 33% 24% Thursday, February 4, 2010
  • 18. Different Seas Different Ships Thursday, February 4, 2010
  • 19. The Vertigo of Disruptive Change •Acceleration •Interconnection •Complexity •Intangibility •Convergence •Immediacy •Unpredictability •Scale Thursday, February 4, 2010
  • 20. Thursday, February 4, 2010
  • 21. Thursday, February 4, 2010
  • 22. Thursday, February 4, 2010
  • 23. Results of an Old Hammer • $300-$500 billion annual WASTE (buildingSmartAlliance) • 50%+ Waste in the System (buildingSmartAlliance and Lean Construction Institute) • 70% Over Budget and Late (Egan report) • 48% of Green House Gases (Energy Info Admin Statistics and Pew Climate report) Thursday, February 4, 2010
  • 24. Uncovering the Hidden Waste • Labor = 50% @ 30% efficiency = 35% waste • Materials = 40% @ 70% efficiency = 12% waste • QTO = up to10% of the cost • Bidding = 5%+ of the cost of a project • Change orders between 2-10% of the cost • Contingencies up to 7% • Team Learning Curve = 1-2% • 3-7% is lost in project cost reduction by not maximizing Construction Tax Planning Thursday, February 4, 2010
  • 25. Thursday, February 4, 2010
  • 26. Thursday, February 4, 2010
  • 27. 2 Camps Finding the New Normal or Hoping for the Old Normal Thursday, February 4, 2010
  • 28. New Operating Principles (imperatives) Integration Expanded Horizons •Value •Care •Time •Relationship •Thought Thursday, February 4, 2010
  • 29. Magnitudes of Change/Impact Paradigms Goals Teams System Rules Meta-Tools Processes Tools Feedback Loops Parts Bottlenecks People Thursday, February 4, 2010
  • 30. Thursday, February 4, 2010
  • 31. Thursday, February 4, 2010
  • 32. Thursday, February 4, 2010
  • 33. 15 Words for Snow Snowflake Frost Fine particle Drifting particle Clinging particle Snow on the ground Soft deep snow Crust on fallen snow Fresh fallen snow Snow floating on water Snow bank Snow block Snow cornice Blizzard Severe Blizzard Thursday, February 4, 2010
  • 34. Emerging Terms with Few Words Green IPD BIM Relational Contracting Lean Outcome Based Incentives Thursday, February 4, 2010
  • 35. Thursday, February 4, 2010
  • 36. Financial Alignment: Outcome Based Thursday, February 4, 2010
  • 37. Thursday, February 4, 2010
  • 38. Nine Keys (4 Principles, 4 Tools, 1 Hidden Opportunity) • Trust-based turnkey teams • Early collaboration • Built-in sustainability (quality) • Transformational leadership • Big BIM (Building Information Modeling) • Integrated Project Delivery • Shared risk/Shared reward • Leverage Offsite Fabrication • Improve Workplace Performance! Thursday, February 4, 2010
  • 39. Thursday, February 4, 2010
  • 40. The ROI of Trust • LogicaCMG study of 1200 contracts: 20% to 40% difference on service, quality & cost • Profitable Partnering for Lean Construction: strategic partnering delivers up to 30% in cost savings of construction • Speed of Trust: distrust creates a 50% tax on work • Edelman Trust Barometer: 20% higher ROI over a 10 year period • Warren Buffet: Handshake deal for McLean Thursday, February 4, 2010
  • 41. Trust: From Deficit to Dividend Trust Tax -80% -60% -40% -20% Environment Hated Toxic Stressful Worry Focus Conflict Escalation Pre-emption Process Relationships Anger Hostile Disrespect Indifferent Process Open defeat Sabotage Hidden agendas Chain of command Behavior Punish Micromanage CYA Do my job Outcomes Grievance or Law-suit Gotcha Politics Slow Systems Disintegrated Dysfunctional Distracting Hassle Ethics Your ruin Your harm Self-interest Compliance Trust Dividends Neutral 20% 40% Environment No worries Positive Uplifting Focus Scope Outcome Mutual success Relationships Cordial Cooperative Collaborative Process Task at hand Keeping promises Making it easier for others Behavior Respect Partnering Transparency Outcomes Efficient Learn from mistakes Improve Systems Does not get in the way Supportive Adaptive Ethics What is expected What is right What is good Thursday, February 4, 2010
  • 42. Select Teams not Players 2004 2008 Thursday, February 4, 2010
  • 43. Novartis - Memorandum of Understanding Thursday, February 4, 2010
  • 44. The Value of a Promise Guaranteed Price Guaranteed Move-in Date No Change Orders 2-Year Warranty 1 Page Contract Thursday, February 4, 2010
  • 45. Ideas for Expanding the Value Horizon Freemium - free BIM work for gain sharing Free green retrofit for performance compensation Cutting original move-in timeline by 70%, with guarantee = big bonus Achieve under 5 year payback for high performing green retrofits Guarantee on-time, on budget, no change orders, 2-year warranty and one page contract Equity stake as part of the compensation Guarantee 10% less than open bid results Tie design model through to CAFM and create new role as BIM integrator Partner with steel fabricator to design a pre-fab rebar frame for shotcreet walls. Cuts 16 weeks and $750k in general conditions Thursday, February 4, 2010
  • 46. What does Better Together look like under the new operating imperatives of integration and extended horizons? Thursday, February 4, 2010
  • 47. Call To Action •What is a next step for teaming? •How do we explore different models for taking on risk and creating value? •Where can we find and partner with Fed Up or Early Adopter owners for proof of concept? •How do we engage Millennials to accelerate our learning curve? •How do we move our organizations out of a 500 old year mindset? •What do ships look like that can sail digital waters? •What does the next hammer look like? (hint: ask) Thursday, February 4, 2010
  • 48. rex@rexmiller.net 214-498-3055 •Speaking •Training •IPD Strategies and Implementation •Designing New Value Propositions •Market Repositioning •Creating Integrated Alliances •Business Development •Educating Owners •Change Management Thursday, February 4, 2010

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