SmartWerke

Business re-invention is not an option but an necessity.

No business, no matter how big or established, can afford to stand still for fear of becoming yesterday’s news, writes Charles Orton-Jones - Reinvent or die in a ruthless world. Business re-invention is tough sell to most business in all industries to grapple with as they are unable to get out of the hamster wheel of “business as usual.

According to Professor Richard Foster of Yale University, the average lifespan of an S&P 500 member in the 1920s was 67 years. Today that has fallen to 15 years. He estimates that in the future it will take eight years for three quarters of the S&P to be populated by firms we haven’t even heard of yet.

No firm can survive for long by staying with the same formula. It is very interesting to note that when Sergey Brin and Larry Page realised Google was going to be a smash hit they sacked themselves. The Google co-founders were brilliant at developing the product, the search engine, but they lacked a skill even more vital for chief executives: the ability to handle business transformation.

I see this in my visits as a project management consultant at Optum+ to various manufacturers and business in the Lower Mainland of beautiful British Columbia. It is also not usual to see manufacturers and contractor, fabricators all carrying out work with no real system in place that is integrated to any business process.

So it was very exciting to read a few weeks ago an Vancouver Sun article on how a pillow manufacturer in the Lower Mainland re-invented the business – transformed their business through enablement of technology. The article has this to say: Novo is now less a pillow manufacturer than “a start-up tech company that happens to make pillows,” Zanatta said. “I built a tech company within our traditional manufacturing business.”

In a hyper-speed world with multiple divergences and where change is exponential, our interconnected world has compressed time, cost and distance considerably.  In this light, business re-Invention is a necessity not an option, as business have to be agile, simple and responsive. Business have to “Werke Smart not Hard” to be relevant and gain loyalty of their customers and clients.

What is not very apparent to most business is that customer is key to business transformation. Business will find that customers and consumers are increasingly setting the business agenda, boosted by technology and changing expectations. Customer experience and experience Innovation is key and crucial component of the business re-invention and this calls for rapid information flows, quick decisions and speedy responses while servicing social, digital and mobile  savvy customers.

Business will have to learn to embrace change and re-invent their business. Re-inventing business is a necessity not an option in the interconnected business world for an growing business. It’s the new business imperative as smart solutions have the potential to improve or transform existing business operations.

Ask Customers what they want in your line of business

Create a digital ecosystem and work smart on real time

Amplify human capabilities through technology enablement

Accelerate time to market & deliver high-quality products

Business must amplify human capabilities through technology enablement and freeing team members to be where customers are and distribute leaders at critical points in an organisation to shape and shift according to context and realities of the hour, the day making the organisations agile and responsive while delivering products and services to their social, digital and mobile  savvy customers.

Add to Flipboard Magazine. Tweet !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+'://platform.twitter.com/widgets.js';fjs.parentNode.insertBefore(js,fjs);}}(document, 'script', 'twitter-wjs');

I came across this article on LinkedIn in my quick scroll to see which update one afternoon grabbed my attention (no pun intended): Attention is a Precious Commodity: Earn it and Spend it Wisely. It is interesting article as it rings true as today's customers from all types of business and industry have so much information coming at them ( and us) at immense speed and volume. At times it feels like we are drinking out of fire hose reel. Their attention spans are at minimal when they are available.

Our customers are so informed that the traditional sales visit to appraise them of the products and services we provide are over. The time for sales call from customer service agents is considered a nuisance and not effective any more. We are challenged in more way than one to get the attention of our customers and have to rightly change our ways to connect with them through social media. (credit for this contribution goes to my friend Mike)

This new collaborative imperative is significantly driving real change within businesses where new models, team structures, and customer-centered philosophies are being developed quickly to stay afloat.  This new collaborative imperative has affected every industry forcing organisations to learn to adapt to a world where the digital and the physical world cross pollinate rapidly.

It is new reality wherein new business models are being introduced and business disruption is the new normal and it has brought in focus the “Customer Experience” where the way we interact; engage with our customers, our clients, is undergoing massive change.  This has resulted in experience innovation becoming key and crucial component of companies seeking to remain relevant and retain customer loyalty. Many companies excel in individual interactions with customers, but they fail to pay adequate attention to the customer’s complete experience.

The experience innovation requires team members and their clients to create an incredible human network in which they participate and interact to create new products and services jointly. An environment where social, digital and mobile savvy knowledge workers who are less managed and more of collaborating individuals are working together leveraging their talent, experience and tacit knowledge triggering judgement work to arrive at decisions servicing social, digital and mobile  savvy customers.

In order to be truly effective today, leaders in business and institutions must change how they engage, and in particular how they establish and maintain relationships via digital channels redefining client engagement and experience delivery and thus transform the experience lifecycle.

Add to Flipboard Magazine. Tweet !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+'://platform.twitter.com/widgets.js';fjs.parentNode.insertBefore(js,fjs);}}(document, 'script', 'twitter-wjs');

It is obvious that the interconnected world we live has brought us into the digital economy. We live in a digital globalized economy in an deeply integrated interconnected world wherein the exponential nature of technology is reshaping the economic and social dynamics of our world as we know. An economy where the social world has collided with the world of economics necessitating dramatic changes within organizations, forcing them to adapt to this new reality in order to maintain relevancy.

It is an era of Digital Darwinism - Disruptive Selection where it is reported that, 70% of the companies on the Fortune 1000 list 10 years ago have vanished unable to adapt to change. This is an disruptive environment where no business is too big to fail or too small to succeed, where technology and society are growing at a faster pace than organization and corporation can catch up.

This scale of disruptiveness or change in a globalized world has necessitating dramatic changes within organizations, forcing them to adapt in order to maintain relevancy. Only organizations that are capable of changing as fast as change itself will survive. Organizations, large or small institutional or entrepreneurial will have to today face a more urgent need than ever to adapt to the new collaborative imperative brought on by an interconnected world in a digital economy.

However, when I meet with manufacturers and fabricators during my consulting work about this and the impact the digital economy and the inter connected world will have on their business, the predictable reaction is their assumption that it is for only those that sell stuff online. I am not surprised as many, many business today think it is “business as usual”.

What many of these and other businesses fail to realize is that the impacts of digital economy together with changes that are happening in manufacturing in North America are going to change their playing field. As manufacturing in general in North America is at a crossroad. I say at the cross road as technology and a growing appetite for variety and flexibility are allowing and compelling companies to rethink where they manufacture, is triggering an reawakening of manufacturing in North America.

To embrace this wave of change many manufacturers will have to step out of their comfort zone and embrace new technologies and adapt to the expectations of the digital economy and the resultant opportunities to be part of this reawakening of making North America an Industrial hub producing some of the best products that human mind can imagine.

In order to be truly effective today, these business must change how they engage, and in particular how they establish and maintain relationships via digital channels.

In the province that I live and work Resources and Energy sector is on the mind and soul of the people. The BC economy used to revolve around the Wood industry - the second-largest contributor to the local economy and Mining with LNG recently garnering a lot of interest. Another industry that gets a lot of traction is the Real estate / Construction industry and many an articles in the local newspaper takes the liberty of gauging the state of the local economy – rightly or wrongly – by the number of permits that were issued by the local city hall in a quarter.

An industry that is gaining momentum is the High-Tech industry with the firms like Amazon, Intel and others joining Microsoft and PMC and a cluster of legacy and startup digital and tech companies such as Electronic Arts Inc., Hootsuite, Bench and Mobif.  The Globe & Mail reports that: “Some 18,750 “emerging” tech companies are counted by the provincial government arm Invest BC. British Columbia’s statistical agency tallied 9,010 tech companies and 84,070 jobs over all in the province in an April, 2014,

One sector that has been delegated to the side lines is the Manufacturing industry in BC. Don Cayo’s article in the Vancouver Sun: Manufacturing may be down, but it’s a long way from being out indicates: Manufacturing is still a big deal — the fourth-largest contributor to the province’s GDP. He further writes: “It may not be fair to say that manufacturing doesn’t get much respect in B.C. these days, but it certainly doesn’t get much attention in our real-estate obsessed city and our services-dominated economy.” Manufacturing is the fourth-largest contributor to the province’s GDP with a huge potential to grow.

In the recent years providing Project Management consultant to my Resource & Energy EPCM clients has given me an opportunity to interact with the local the industrial /manufacturing sector, which has given me a firsthand experience of the capabilities of the local industrial / manufacturing industry and my appreciation of the industry has grown since. Many of these industries that I have interactions with are home grown industries that were started years ago, weathered the storms of the erratic global economy, handed over to the next generation relying on technology, methods and systems created over the years.

These industries have a number of challenges that they are or will be facing. The cost of developing an industrial property in the region has increased anywhere from 18 to 26 per cent in the Lower Mainland over a period of just two years. Together with this challenge is the lack of lack of raw land options and high development cost which varies from city to city.  I am sure that similar challenges are felt by manufacturers not only in BC or in Canada but in US and North America in general.  

So the question is how can the manufacturers in BC; Canada; US and in North America reclaim or gain its competitive edge and turn the tide of manufacturing flowing to countries such as China and India. This can be achieved in my opinion through digital technology which has become a momentous disruptor of traditional business paradigms and an enabler of new business approaches and customer relationships. This in turn has created an ecosystem, a worldwide conduits that can streamline and accelerate the exchange of products, materials, components  besides the already free flowing commodity: information. Thus creating “a “manufacturing digital ecosystem” that supports new ways to design and make products, and makes it possible to share design content so that satellite businesses, third parties and even customers can produce items themselves”.

The manufacturers in North America have the opportunity to ride the wave of “The Disruptive Potential of 3D Printing” and its three particular areas of:

Rapid prototyping and mass customization

New ecosystems for accommodating the digital nature of 3D printing

New angles to driving operational excellence

 These areas of 3-D printing has the potential to change the economies of small-run manufacturing because no special molds, jigs or other tools are needed to produce a product and possibly give companies economical, fingertip access to a huge variety of parts that are created only as needed.

 General Electric the world’s largest supplier of jet engines, is preparing to produce a fuel nozzle for a new aircraft engine by printing the part with lasers rather than casting and welding the metal. No wonder respected business guru Jeremy Rifkin (an exaggerated one) claims that digital technology is one anchor of a “third industrial revolution.” This disruption potential of 3D printing - “additive manufacturing” is making it possible to cost-effectively “print” products as more materials are becoming available for printing - . 3D Printing has joined forces with other  technologies that are also advancing at exponential rates and converging, technologies that include robotics, artificial intelligence (AI), and nanotechnology.

 Manufacturing is slowly but steadily is being radically changing in emerging and developed markets. This radical change has come about with advances in technology and a growing appetite for variety and flexibility which are allowing and compelling companies to rethink where they manufacture- a next-shoring approach—deciding which products should be manufactured close to demand and which should be produced near an innovative supply base. There is surprising talk now of “The End of Chinese Manufacturing and Rebirth of U.S. Industry” even Tim Cook is Wants an Apple Product to Be Made in U.S.

In a reversal of global trade patterns, a Hong Kong shoe company recently opened a factory in Jefferson City, Tennessee but it still has to import shoe boxes from China. I look forward in 2015 to hear and read more stories of small but definite success of returning the manufacturing to BC; Canada; US and in North America and to reclaim or gain the competitive edge it once lost.

 What is your take on the manufacturing scenario in your region, I would love to hear from you.

Philip Thomas is an Enabler, Client Advocate, Management Consultant – Project Delivery, Project Director & Manager and a budding Idea Entrepreneur at Optum+.

A few weeks’ backs I was involved in a series of meetings together with my immediate client (EPCM firm representative) in tow with his client representative in the Resource & Energy industry visiting manufacturers & suppliers in the Lower Mainland. The series of meetings were to find out what we could do to improve the flow of information and products in the supply chain. 

What was refreshing in these meetings was the end user – client admitting that they generally due to the nature of the multi-national set up and far reaching processes it can make the life of the supplier difficult in providing timely services or products. It was refreshing as generally in construction projects various stakeholders ram through all issues/problems lower down the food change together with a lot of finger pointing and shouting.

These large AEC / EPCM projects have too many layer of owner/ engineering/ manufacturer / supplier construction management involving innumerable bid cycles & multiple construction silos and subcontractors / suppliers creating multiple silos where risk is transferred down the supply chain where risk/contingency is at premium.  In this entire process the end user client is in the process of meeting their business objectives and meet the ROI of the business objectives and ensure shortest time to market for their product or services.

Supply chain in large projects in the Resource & Energy industry valued at billions of dollars can have thousands or hundreds of supply tags and thousands or hundreds of manufacturers and suppliers strewn all over the global landscape. Our clients from the Resource & Energy industry are thus challenged to keep their project moving and meet deadlines through efficient supply chain system.

A recent study titled: Building Contractor Management Excellence – carried out by Accenture has this to say: “Under relentless pressure to control costs, companies in resources industries ranging from oil and gas to mining, chemicals and utilities are relying more than ever on outside providers to upgrade and maintain their critical production facilities and assets. But the management of contractors is not getting any easier, compelling companies to adopt a more rigorous approach.” Supply chain efficiency is key to improving a company’s financial performance in the Resource & Energy industry together with supply chain resilience to reduce disruptive risk.

A rigorous approach - a shifting of mindset is required in the construction delivery method, especially required in the digital globalized world we live and work where social, mobile, real-time, and other disruptive technologies have aligned necessitating dramatic changes within organizations, forcing them to adapt in order to maintain relevancy. This digital transformation is significantly driving real change within businesses where new models, team structures, and customer-centered philosophies are being developed quickly to stay afloat. The construction delivery model and the design, engineering and construction industry is not immune to this change neither our clients within the Resource & Energy industry.

A recent study carried out by A Weippert & S. L. Kajewski at the Queensland University of Technology, Brisbane, Australia titled: AEC Industry Culture: a need for change highlights some of the issues in the design, engineering and construction industry. "Four decades of international Architectural, Engineering, and Contractor (AEC) industry publications reinforce poor communication and information transmission; coordination; and teamwork issues, are the cause of countless performance problems on numerous AEC projects.” Interestingly, I came across a presentation by one of my LinkedIn Connections – Bill Black-  titled: Is our industry broken- the answer is Yes. The construction delivery model is broken for the following reason:

 Design + Engineering team:

Creates a design intent that revolves around the solution – solution is the start and the support systems revolve around it.  

Procurement + Supply Chain team:

Source Procure thousands of items - which are available at different stages at different times not necessarily in the order it has to be constructed

Construction team:

Details and builds the building /structure ground up – building brick by brick at a time to its completion.

 The presently industry accepted & practiced construction delivery model where each practitioners is working in silos with a hope that in the end all will gel together. The model illustrated above falls short to create a methodology which that resolves the issue of:

 Too many layer of owner - construction management

Designing & engineering without the end delivery methodology in mind

Cost Influence lost after design/engineering stage

Innumerable bid cycles & Layer of subcontractors multiple construction silos

Risk/contingency premium when risk is carried by contractor to the construction phase

Inconsistent safety & quality

 While meeting through a shifting mindset – a complete remodeled system that encompass:

 Greater Accountability & Client Relationship Management

Lowered Capital Cost & Project Timeline and cost influence through project life cycle.

Design with end delivery consultation process in mind

Create efficiencies through Standardization

Maximize labour Productivity & Constructability

Improved predictability of project Execution & Risk

Improved Safety & Quality

Lower Environmental/Socioeconomic Impact

Shifting mindset is required to innovate the construction delivery model in this digital globalized economy where we have to disrupt traditional process, and rebelliously discard old business clichés and remake the construction delivery model and greatly accelerate the way we operate to understanding customer needs and problems to keep pace with a rapidly changing disruptive business environment.

We owe it to the generation that is moving into the boardrooms of the digital globalized economy to fix a system that is broken. Do you agree, I would like to hear from you?

  Philip Thomas is an Enabler, Client Advocate, Management Consultant – Project Delivery, Project Director & Manager and a budding Idea Entrepreneur at Optum+.

In recent times I have been professionally challenged to find new ways to enhance client experience as a management consultant at Optum+.  In my delivery of service to my clients I always differentiated myself by being an Enabler – leveraging my knowledge and years of experience; being an Client Advocate – making my client successful in his/her job or endeavor  and being a Management Consultant or Manager successfully delivering projects. However I was challenged to find new ways to enhance client experience as I realised:

First, the nature of competition has changed

Vivek Wadhwa rightly says in his article in WSJ - How the Nature of Competition Has Changed “… “you can no longer see the competition coming. Technologies are no longer progressing in a predictable linear fashion, but are advancing exponentially — and converging. Fields such as computing, medicine, artificial intelligence, 3D printing, robotics, nanomaterials  and synthetic biology are simultaneously making advances, and combining these allows one industry to rapidly disrupt another — before market leaders even know what hit them”.

Secondly, a renewed focus on the customer and the human side of business through digital transformation

Brian Solis in his article Digital Darwinism: How Disruptive Technology Is Changing Business for Good talks about digital tools are invading the business environment, provoking significant changes in the way we work, communicate, and sell.  He further goes on to say: “Social, mobile, real-time, and other disruptive technologies are aligning like never before to necessitate big changes within organizations, forcing them to adapt in order to maintain relevancy. Digital transformation is significant because it is finally driving real change within businesses; they’re developing new models, team structures, and customer-centered philosophies along the way. “

Lastly, the competitive advantage resides in the minds of our clients

Niraj Dawar argues that most companies still look for competitive advantage where it used to be: through activities related to products and new product creation. But today’s advantage comes from interactions of a different sort—those you have with your customers. Companies that recognize and move on this shift win.

In this digital globalized economy we have to disrupt traditional process, and rebelliously discard old business clichés and remake the market landscape deliberately target situations where the competition is complacent and the customer has been consistently overlooked or under-served and greatly accelerate the way we operate to understanding customer needs and problems to keep pace with a rapidly changing disruptive business environment

To understand and address the challenge I encountered to find new ways to enhance client experience as a management consultant, I embarked on a journey which gets increasingly interesting through my daily learning on untethered thinking that offered the best of both aspiration and pragmatism to influence effectiveness in enhancing client experience. The results of my journey is being posted on SmartWerke. The information on this site is being posted as I learn, unlearn and stumble upon concepts and ideas and practices in my continuing journey on doing “Smart Werke” by enhancing client experience.

Turning Customer experience on its head by enhancing client experience in a completely new and different way is to:

Engage + Transform + Create

ENGAGE:

Enhancing client experience starts with engaging the client by understanding the background and the objective of the project.

Envision together a clear vision of project delivery

Identify client drivers & business objective of the project delivery

Determine project intent, objectives & criteria for effective project delivery

Agree to share the inherent risks & potential rewards of project delivery

Understanding the background and the objective of the project, further enhance client experiences by transforming the client engagement during project delivery.

TRANSFORM:

Transforming client engagement during project delivery within the changing project context of Design + Engineering + Construction will further enhance client experience.

Navigate the intent of the project objectives through the project lifecycle

Determine together fresh ideas & initiatives to deliver the intent of the project

Envision a new methodology for each construction elements &

Create new possibilities of delivery within those systems

Establishing a controlled & accountable ecosystem to meet outcome

Engaging the client through the understanding of their business and transforming our engagement of the client during project delivery will lead to creating sustainable value.

CREATE:

Create sustainable value to build long lasting relationship as award of a project delivery is a promise of value to be delivered & a belief from the client that value will be experienced.

Enable shortest time to market for client product or services

Meet the ROI of the business objectives of our client firm

Enabling clients to focus on their core business not manage the project.

Improve project overall NPV -Net Present Value

Reduce financial cost of project delivery

Assist clients to stay competitive

When value is delivered and experienced through effective project delivery, deeper and lasting relationship are built with clients.

Turn client experience on its head through a combination of Engage + Transform + Create in solving project complexity; find and fill unmet customer needs, plan for profitability, strive for sustainability, establish credibility knowing that the nature of competition has changed; renew the focus on the customer and the human side of business through digital transformation and the competitive advantage resides in the minds of our clients while becoming a trusted partner to clients by addressing “Customer’s point of thirst” (expectations) and removing “Customer Pain” (roadblocks).

Since my days as a Designer and now as a Management consultant at Optum+, wherein I project manage projects, I have heard the refrain from designers of both exterior and interior environments: “oh if these restrictions and problems were not there we would have come up with a great design.” I have to admit I too have made this remark in the past. However over the years I realised the hard way that all the sweat and brain crunching to get around restrictions and work around problems have produced some of my most interesting design and products.

Take for example the development project in Vancouver for instance known as the Vancouver House currently one of the world' most talked about real estate projects, prompted by Westbank here in beautiful wet-wet British Columbia. The Vancouver Sun on Sunday had a four page ad on the project which is designed by the accomplished young architectural firm Bjarke Ingels Group (BIG), based in Copenhagen and New York, Vancouver House is scheduled for completion in 2018

The project revolves around the “key concept here is taking the idea of the total work of art to a whole new scale – applying this philosophy to solve problems and create opportunities for enlightened city-building” as exhorted on Gesamtkunstwerk: The Philosophy behind the concept for the building.

As noted by many and indicated in the Georgia Strait article that this particular site below the Grandville bridge was a difficult site and has been seven years in the making due to its restriction and issues of zoning etc. as the Westbank site indicates it “make innovative use of a difficult parcel of land in the 1400 block of Howe Street. BIG has accommodated building restrictions on the site by designing a spectacularly torqued and cantilevered tower of condos and rental apartments, with a series of low-rise offices, retail units, galleries, and public amenities at and near its triangular base.

I am told many local architects have tried their hand at this site and have been unable to come up with a viable project. Ironically, it took an outsider and not a resident architect of Vancouver to come up with a concept that is not in line with Vancouverism, a term commonly used to describe this city’s urban-planning style and “tower and podium” architecture invented by architect James K.M. Cheng and copied by many.

The Vancouver House is an impressive solution to a difficult site to be completed in 2018 is an interesting engineering challenge to build incorporating Advanced Building Technology and meeting LEED Platinum Design Standards where Every home a Bjarke Ingels Original.  No wonder it is one of the world' most talked about real estate projects!

Not knowing the details of the building method of such an impressive and challenging project and noting that its completion date is 2018, I am going to presume (stand to be corrected if required) that it is going to build in the traditional method of brick by brick, block by block.

Good Architecture and design in the digital globalized world is just bling, a passing trend to be unseated by another project that is better. Architecture has to rise above just good design and come of age as indicated in my earlier blog post on LinkedIn: What’s next for Architecture?  Westbank with its Vancouver house project has an opportunity to be credited for another first and another step in innovation- innovative building - if it embarks on building this building using industrial design and turning the building into a product that will be manufactured offsite as components (Lego system approach) and assembled at site to be ready earlier than 2018.

Vancouver House is clear example of a work that besides its good architecture is the creative use of a land that was deemed by many as too restrictive to be developed well. A clear example of when restrictions and problems /issues are not hindrance to creativity. As Charles Eames once famously said: "design depends largely on constraints".

A methodology commonly referred to as Design Thinking which I make it a point to use in my profession as a budding Idea entrepreneur. Design Thinking is a proven and repeatable problem-solving protocol that any business or profession can employ to achieve extraordinary results brought into play by IDEO for product development and now has wormed its way into the board rooms of the digital globalised world and become and common lexicon.  Issue; problems and restrictions are just stepping stones to creativity. It needs and openness of mind and a willingness to learn and ask. One of the methods as listed by The Fast Company article on Design Thinking is:  

1: Define the problem

2: Create and consider many options

3: Refine selected directions

3.5 Repeat (optional)

4: Pick the winner, execute

I hope “Design Thinking” enables you to rise above the issues, problems and restriction to unleash creativity and innovation in design, business or herald social change. Read more about it on: “Design Thinking” in Harvard Business Review and let me know what you think, I look forward to it.

Add to Flipboard Magazine.

Image from QuaDror

This a question that Design Intelligence- and Greenway Consulting asked in their 2003 report “The Scientific Revolution Has Just Begun: What’s next in Architecture. A survey during the summer and early fall of 2003 of 45 leading design, construction, and real estate organizations to explore the changing directions in professional and business models, had this to say: “The culture in the A/E/C industry has for a long time been fragmented and inefficient. This industry has lacked trust and has been short on strategic collaborative thinking. We believe that this culture must become a remnant of the past. We see smart firms creating new value propositions that connect together and make sense of the pieces of the puzzle.”

It is 2014 today and we are in the 21st century and this question: What’s next in Architecture is still relevant. Guy Horton a writer based in Los Angeles in his column The Indicator: The Next Architecture on ArchDaily magazine while reviewing a book title Aftershock: The Next Economy and America’s Future, by Robert B. Reich, former Secretary of Labor under President Bill Clinton – refers to a premise in the book that indicates that: “The culture of architecture, for its own internal logic, unwittingly exemplifies the economic and social divides that made our economy vulnerable to recession in the first place.”

He further goes on to say that: “Architecture needs a re-boot and perhaps the recession is a good opportunity for that. Architecture must move beyond the project-shop mentality and evolve using viable, practical business knowledge. He further states” ‘…..high design can thrive only when protected by an economics of value and fiscal sustainability.” “Without developing new approaches to architecture as a business, architecture as a profession will continue to erode. It will reach a point where younger generations will not be able to sustain themselves in the profession. The sacrifices will simply be too daunting and unreasonable—if they aren’t already.”

It is a reality that architecture as a profession has to progress leaving behind the vestiges of the industrial economy model. Dr. Alan Beyerchen –Ohio State University has this to say: “We construct buildings, erect institutions, and develop organizations to yield linear responses and predictable behavior, and ultimately to achieve the social goal of control.” In this digital globalized economy where every industry is being disrupted through Disruptive Selection, it is not strange to consider that architecture has to change to be relevant.

The industry in which Architecture is nestled in is in for a change: AEC industry is A recent study carried out by A Weippert & S. L. Kajewski at the Queensland University of Technology, Brisbane, Australia titled: AEC Industry Culture: a need for change highlights some of the issues in the industry. "Four decades of international Architectural, Engineering, and Contractor (AEC) industry publications reinforce poor communication and information transmission; coordination; and teamwork issues, are the cause of countless performance problems on numerous AEC projects.”

Even within the profession there is a call to redefine the role of architecture: Some in the profession like architect: Rem Koolhaas in Architectural Review interview titled Batik, Biennale and the Death of the Skyscraper has this to say: “For architecture the conditions have changed more in the last 30 years than they changed in the previous two centuries, yet we still act as if it’s the same profession. There have been radical changes to so many things, such as computing power, engineering and the relationship between architect and client, yet we persist as if we are still old pipe-smoking gentlemen.”

Architect Clive Wilkinson told Dezeen in an interview for their article: Google was cubicle land when we started designing offices for them says: "One of the reasons I really like workplaces and interiors is that the impact on humanity is much more powerful than dealing with inert architectural shells, or the decorative outside dress of a building - which frankly is what most architects do." There's a notion that you can't build big buildings for owners who have highly specific needs because needs change and therefore that building will be compromised by its specificity," he added. "So architects are placed in a market of building shells."

So what’s next for Architecture?

Architecture in this digital economy is going to be defined by how infrastructure is going to be built for the next 1 Billion. Architecture and its practice will be made relevant and turned on its head in developing economics with large population base under pressure to improve their infrastructure and societies with local solutions and many cases creating crucibles for reverse innovation. 

Vijay Govindarajan and Chris Trimble in their book Reverse Innovation write about “reverse innovation,” in which firms create products for and in emerging economies that lead to innovative goods for the developed world. Consider the following example given in the HBR article by Vijay Govindarajan : Reverse Innovation Starts with Education – “The U.S.-based Harman International Industries, known for ultra-sophisticated dashboard audiovisual systems for high-end automobiles, engineered a radically simpler and cheaper auto infotainment system for mid-price and entry-level cars in emerging markets. The company subsequently migrated the low-cost platform to serve the needs of luxury cars as well. General Electric engineered an $800 portable, battery-operated, easy-to-use electro-cardiogram (ECG) machine for rural India at a time when they were selling very powerful $10,000 ECG machines in the U.S. The $800 ECG platform is now sold in wealthy countries as well, creating new applications and additional growth for the company.”

Architecture in this digital economy is going to be defined by the future designers of the cities of the future. In 1900, only 13% of people lived in urban areas. Today, cities account for more than half the global population and this figure is expected to increase to 70% by 2050. With the advent of Bid Data and Internet of Things, the cities of the future are going to be designed based on the information from its users, driving the feel, makeup and the building blocks of the city. The future designers of the cities of the 21st century

On November 20th, representatives of those fields gathered onstage for Chicago: City of Big Data, an UChicago Discovery Series panel discussion of research and educational efforts focused on transforming cities through data and computation - Data: A Foundation for Tomorrow's Cities.  Computation Institute Director Ian Foster pointed out that half of the Earth’s population currently lives in cities—a portion that will rise to 70 percent by the year 2050. He further goes on to say ” “I think it’s no exaggeration to say that the health and prosperity of humanity during this next century will depend very much on how effectively we are able to run, design and hopefully improve the cities in which we live,”

 Architecture in this digital economy - the modern age - the Anthropocene where evidence and extent of human activities have had a significant global impact on the Earth's ecosystems - is going to be defined by industrial design turning it into a product that will be manufactured offsite as components (Lego system approach) and assembled at site, where structures do not quickly become waste, but are reused to extract their maximum value before safely and productively returning to the biosphere.

A combination of Modularization, Robotics, 3D Printing, automated manufacturing, with technologies of the future will change the architectural profession for good. QuaDror is an example of a system that lends itself to many different uses and scales.  “The QuaDror system incites innovative thinking. Its structural versatility and efficiency enables design solutions for various industries and for projects of various scales. Each benefits from its economical and environmental performance. QuaDror is led by Dror Benshetrit, who invented the geometric designed figures, which can be used for construction, habitat, urban design, and more. Another noteworthy example is D*Haus Dynamic a house that can respond dynamically to its environment by controlled adaptation to seasonal, meteorological and astronomical conditions.

Add to Flipboard Magazine.

We live in a world of digital Darwinism where through Disruptive Selection it is reported that, 70% of the companies on the Fortune 1000 list 10 years ago have vanished and in an environment where no business is too big to fail or too small to succeed, where technology and society are growing at a faster pace than organisation and corporation can catch. Massive disruption is coming, and the only question is whether your firm is going to cause it or fall victim to it. Disruption is not easy--either to create or to confront. We have no illusions about that” says Bruce Kasanoff & Michael Hinshaw in a Fast Company Article: 7 Ways to Disrupt.

Some business leaders have seen the writing on the wall but for the majority life goes on as they are caught up in the cycle of boom and bust, feast or famine not realizing this digital globalized economy will disrupt any industry. This is especially true for most industries that have not learned to adjust itself to the digital, globalised economy where society and technology are progressing at a faster rate than institutions and organisations.

The rapid advancement of technology & globalization in the digital globalized economy allows new business models to be introduced at an ever-increasing rate & with rapidly declining costs forcing transformational change disrupting industries or industries getting disrupted. Business disruption is the new normal, rare a decade ago but now a reality, faced on a regular basis. "The truth is, at this very moment your company is most likely either disrupting other companies or being disrupted." Says John Kotter from Kotter International.

The AEC (Architecture, Engineering and Construction) Industry is no exception, it has to undergo a transformational change through disruption and face the reality as rapid advancement of technology & globalization which allows new business models to be introduced at an ever-increasing rate & with rapidly declining costs.

The AEC industry consists of three separate players - Architecture, Engineering and Construction - working in a project to bring it to fruition, these are separate entities integrating into a single industry resulting in many issues.

Implementation of standards -particularly problematic

Each building process individually covers an extensive area

Difficult to streamline the standards between components

Each of these industries also uses different terminology

A recent study carried out by A Weippert & S. L. Kajewski at the Queensland University of Technology, Brisbane, Australia titled: AEC Industry Culture: a need for change highlights some of the issues in the industry. "Four decades of international Architectural, Engineering, and Contractor (AEC) industry publications reinforce poor communication and information transmission; coordination; and teamwork issues, are the cause of countless performance problems on numerous AEC projects.”

It is an industry that is out of step with all industry players’ just shades of gray - almost similar providing professional engineering & good design through long drawn project delivery & methodology using high skill intensive & customized approach to build combined with most work is still performed manually and on site and the end product is costly and time consuming.

There has been advances in the industry in the last decade such as Building information modeling (BIM) requiring specialized training due to the complexity of the process and the initiation of Smart Building Technology, technological advanced Equip. / Building materials together with low-tech modularization of construction and construction oriented manufacturing.

These are advances in a predictable linear fashion while in the digital innovative globalized world technology is advancing exponentially and converging.  Vivek Wadhwa: in his WSJ article on: How the Nature of Competition Has Changed explains: Because you can no longer see the competition coming. Technologies are no longer progressing in a predictable linear fashion, but are advancing exponentially — and converging. Fields such as computing, medicine, artificial intelligence, 3D printing, robotics, nanomaterials  and synthetic biology are simultaneously making advances, and combining these allows one industry to rapidly disrupt another — before market leaders even know what hit them.

It is obvious the AEC industry must disrupt as in this disruptive, digital global economy, the AEC industry will find its environment of operation will have to change quickly to survive. It will have to change the game internally to accelerating speed-of-execution and become agile to seize new opportunities while disrupting to gain critical competitive advantage. In short it will have to Out-Execute and Out-Innovate.

Add to Flipboard Magazine.

In the times we live in there are very few industries that are not being disrupted and or are being disrupted again and again. Apple disrupted the phone industry by up-scaling the customer experience through the introduction of the first iPhone but finds that it will have to disrupt again to stay alive.

We are living in an age where it is reported that, 70% of the companies on the Fortune 1000 list 10 years ago have vanished and in an environment where no business is too big to fail or too small to succeed, where technology and society are growing at a faster pace than organisation and corporation can catch up.

So, it comes as no surprise to me that the AEC industry I come from is ripe for disruption. I have spoken to many leaders in the industry on the need for change and have even sent them, presentations and information on the need for the industry to change. They show interest and ask for the presentations but show no evidence of change in their organisations.

There is a feeling in the AEC industry that disruption is not going to hit the traditional industry such as Design (Architectural), Engineering and Construction and that disruption is going to happen only to industries that are doing business online. There is an assumption and confidence that AEC industry which matured in the west and taken throughout the world would be hard to disrupt.

Why should the AEC change one must ask? A few of the reasons are: Not understanding our client's business objectives; Not understanding the financial cost and the ROI of the project for the client organisation, nor addressing the time to market for the clients service or product and not Involving the client in the design and delivery thinking.

Let me explain the impact of one of the reasons: “addressing the time to market for the client’s service or product”. In Vancouver city Amazon is slated to bring in 1000 jobs and are awaiting move into one of the premium buildings being constructed by Telus an, striking million-square foot development, to be completed in 2015. What if this building was constructed faster using technology and innovative process and these jobs from Amazon comes into play sooner, what will the impact of such a speed bring to the company Amazon as well as the local economy?

In my professional experience towards the end of 190s we were able to build a 685K sq. ft, highly technological intense commercial space in 13 months from soil investigation to move in. This was before the demands of this current digital global environment and before some of the advent of some of the building technologies available today.

The AEC industry will be disrupted very shortly as the business environment which the industry is based is being disrupted. Our age old assumptions in business are no more relevant and the metrics of success are being redefined and where the clarity of words we use to discuss business, standbys like marketplace and competitive advantage, are redefined and rendered almost meaningless, makes it imperative that the industry will be disrupted. In the globalized knowledge economy where the goal is not efficiency but is adaptability or innovation or unleashing human potential where a whole new management system and tools is being reinvented, it is only a matter of time.

Some architects have started to recognize it: Architect: Rem Koolhaas in Architectural Review interview titled Batik, Biennale and the Death of the Skyscraper has this to say: “For architecture the conditions have changed more in the last 30 years than they changed in the previous two centuries, yet we still act as if it’s the same profession. There have been radical changes to so many things, such as computing power, engineering and the relationship between architect and client, yet we persist as if we are still old pipe-smoking gentlemen.”

In today’s digital global environment, disruption can happen from any part of the globe, especially from developing economics with large population base under pressure to improve their infrastructure and societies with local solutions and many cases creating crucibles for reverse innovation.  Vijay Govindarajan and Chris Trimble in their book Reverse Innovation write about “reverse innovation,” in which firms create products for and in emerging economies that lead to innovative goods for the developed world.

So when I received an email from Mckinsey today, I was elated as ready an article on: How to build a skyscraper in two weeks, where China’s Broad Group Chairman and CEO Zhang Yue explains how they are revolutionizing commercial building and why traditional construction practices are outdated and how the industry can change.

He mentions in this article: “Unfortunately, the construction and infrastructure industry is the exception (Technology evolving rapidly and disrupting industries). It is antiquated and out of date. Most work is still performed manually and on site, which is costly and time consuming. For example, today a skyscraper can take five years or more to complete. When the Empire State Building was constructed, it only took about 13 months.

Add to Flipboard Magazine.

The 21st Century has initiated a change in our economy that is far removed from the one that existed during the turn of the last century. Tools in business have changed from pen to computer; to mobile devices and the associated enhanced communication through ubiquitous connectivity affecting the way we work we play and the way we live our lives.

We are living and working in an era which are adapting to the rapid advancement of technology and wherein new business models are being introduced and business disruption is the new normal and society has brought in focus the “Customer Experience” where the way we interact with our customers, our clients is undergoing massive change.

This change in focus of the “Customer Experience is taking root in a global environment where, it is reported that, 70% of the companies on the Fortune 1000 list 10 years ago have vanished and in an environment where no business is too big to fail or too small to succeed, where technology and society are growing at a faster pace than organisation and corporation can catch up.

In this business environment where our age old assumptions are no more relevant and the metrics of success are being redefined and where the clarity of words we use to discuss business, standbys like marketplace and competitive advantage, are redefined and rendered almost meaningless, makes the age old maxim “Our reputation with a client is only as good as the last project” all the more important.

In my 30 + years in the AEC industry what our clients remember at the end of the projects is “Their experience with the project delivery”. No doubt good design and engineering together with professional project management add to the experience but the client’s view of our project is based on his expectation which in turn are based on his business objective.

It is to be noted that in this digital globalized economy that we are in, client drivers are different from the drivers of an Industrial Economy. Experience innovation is a key and crucial component of Design, Engineering & Construction for AEC companies seeking to remain relevant and retain customer loyalty. Enhancing client experience though innovation in the project delivery will create sustainable value to be experienced through all levels of project outcome.

The sustainable value can be created only through disrupting the traditional industry practice of project delivery by changing our thinking to determine a changed outcome. A changed outcome requires a mindset to respond to the changing industry context of the client’s industry with new ideas not only in the delivery of Design, Engineering and Construction elements itself, but transforming how clients are engaged.

Project experiences can be enhanced by speaking their language of “Business” creating customized project delivery experiences which assist clients to stay competitive & enabling  them to be “first to market” in the shortest time in their specific industry segment. Addressing many of the client drivers of their specific industry segment is achieved by envisioning a new methodology for each construction elements & creating new possibilities of delivery within those systems in a controlled & accountable ecosystem to meet the outcome.

A shifting of our mindset to disrupt our traditional process, and rebelliously discard old business clichés and remake the market landscape for Design, Engineering & Construction by deliberately targeting situations where the competition is complacent and the customer has been consistently overlooked or under-served and greatly accelerate the way firms operate internally to keep pace with a rapidly changing world.

Meeting client’s expectation through an enhanced client experience is key to making AEC industry relevant in digital globalized economy.

In recent times I have been professionally challenged to find new ways to enhance client experience as a management consultant at Optum+.  In my delivery of service to my clients I always differentiated myself by being an Enabler – leveraging my knowledge and years of experience; being an Client Advocate – making my client successful in his/her job or endeavor  and being a Management Consultant or Manager successfully delivering projects. However I was challenged to find new ways to enhance client experience as I realised:

First, the nature of competition has changed

Vivek Wadhwa rightly says in his article in WSJ - How the Nature of Competition Has Changed “… “you can no longer see the competition coming. Technologies are no longer progressing in a predictable linear fashion, but are advancing exponentially — and converging. Fields such as computing, medicine, artificial intelligence, 3D printing, robotics, nanomaterials  and synthetic biology are simultaneously making advances, and combining these allows one industry to rapidly disrupt another — before market leaders even know what hit them”.

Secondly, a renewed focus on the customer and the human side of business through digital transformation

Brian Solis in his article Digital Darwinism: How Disruptive Technology Is Changing Business for Good talks about digital tools are invading the business environment, provoking significant changes in the way we work, communicate, and sell.  He further goes on to say: “Social, mobile, real-time, and other disruptive technologies are aligning like never before to necessitate big changes within organizations, forcing them to adapt in order to maintain relevancy. Digital transformation is significant because it is finally driving real change within businesses; they’re developing new models, team structures, and customer-centered philosophies along the way. “

Lastly, the competitive advantage resides in the minds of our clients

Niraj Dawar argues that most companies still look for competitive advantage where it used to be: through activities related to products and new product creation. But today’s advantage comes from interactions of a different sort—those you have with your customers. Companies that recognize and move on this shift win.

In this digital globalized economy we have to disrupt traditional process, and rebelliously discard old business clichés and remake the market landscape deliberately target situations where the competition is complacent and the customer has been consistently overlooked or under-served and greatly accelerate the way we operate to understanding customer needs and problems to keep pace with a rapidly changing disruptive business environment

To understand and address the challenge I encountered to find new ways to enhance client experience as a management consultant, I embarked on a journey which gets increasingly interesting through my daily learning on untethered thinking that offered the best of both aspiration and pragmatism to influence effectiveness in enhancing client experience. The results of my journey is being posted on SmartWerke. The information on this site is being posted as I learn, unlearn and stumble upon concepts and ideas and practices in my continuing journey on doing “Smart Werke” by enhancing client experience.

Turning Customer experience on its head by enhancing client experience in a completely new and different way is to:

Engage + Transform + Create

ENGAGE:

Enhancing client experience starts with engaging the client by understanding the background and the objective of the project.

Envision together a clear vision of project delivery

Identify client drivers & business objective of the project delivery

Determine project intent, objectives & criteria for effective project delivery

Agree to share the inherent risks & potential rewards of project delivery

Understanding the background and the objective of the project, further enhance client experiences by transforming the client engagement during project delivery.

TRANSFORM:

Transforming client engagement during project delivery within the changing project context of Design + Engineering + Construction will further enhance client experience.

Navigate the intent of the project objectives through the project lifecycle

Determine together fresh ideas & initiatives to deliver the intent of the project

Envision a new methodology for each construction elements &

Create new possibilities of delivery within those systems

Establishing a controlled & accountable ecosystem to meet outcome

Engaging the client through the understanding of their business and transforming our engagement of the client during project delivery will lead to creating sustainable value.

CREATE:

Create sustainable value to build long lasting relationship as award of a project delivery is a promise of value to be delivered & a belief from the client that value will be experienced.

Enable shortest time to market for client product or services

Meet the ROI of the business objectives of our client firm

Enabling clients to focus on their core business not manage the project.

Improve project overall NPV -Net Present Value

Reduce financial cost of project delivery

Assist clients to stay competitive

When value is delivered and experienced through effective project delivery, deeper and lasting relationship are built with clients.

Turn client experience on its head through a combination of Engage + Transform + Create in solving project complexity; find and fill unmet customer needs, plan for profitability, strive for sustainability, establish credibility knowing that the nature of competition has changed; renew the focus on the customer and the human side of business through digital transformation and the competitive advantage resides in the minds of our clients while becoming a trusted partner to clients by addressing “Customer’s point of thirst” (expectations) and removing “Customer Pain” (roadblocks).