Among my many duties as principal of KMI International, I participate in a fair number of forums that discuss the state of the construction industry. For years, I have heard complaints about the lack of leadership within the industry. In fact, it is a topic that comes up regularly at the Construction Management Association of America (CMAA) Conferences. There is also discussion noting how productivity in the construction industry continues to fall.
In February 2017, McKinsey & Company completed a study, “Reinventing Construction: A Route to Higher Productivity.” In this report, they identify that while construction spending accounts for 13% of the World’s GDP, productivity has only increased 1%, or less, in the past 20 years! The report also notes that the compounded rate of productivity for manufacturing, since 1947, has been 3.5% per year versus construction, which has been 0.1% per year.
At the recent CMAA Capital Symposium in New Orleans, several key educational sessions were focused specifically on the lack of productivity and what could be done to correct the issue – strengthening leadership was identified as one of the key solutions.
In their report, McKinsey outlines seven key ways to tackle the root causes of the construction industry’s poor productivity. They include:
1. Reshape regulation and raise transparency;
2. Rewire the contractual framework;
3. Rethink design and engineering processes;
4. Improve procurement and supply-chain management;
5. Improve on-site execution;
6. Infuse digital technology, new materials, and advance automation; and
7. Reskill the workforce.