Contractors who come from the future will flourish in construction

Michael Chesterman May 20, 2022
SHARE

In other words, those contractors that are thinking and planning for the future will succeed.

I am a ‘change junkie’ in everything I do. I have always believed that every day we must embrace change. We must deal with a rapidly changing world on a personal level, but also be successful in business. However, I now recognise that just responding to change happening is not good enough.

Let’s focus on contractors working in the construction industry.

I am of the view that those who get in front of change will flourish in the future. Those who appropriately ‘read the tealeaves’ and reset their business models accordingly. To make things even more challenging, I do not believe that contractors can operate with a ‘set and forget’ strategy. This was essentially a period of change respite. This was a stage where businesses sought to consolidate a new model before thinking about developing a new one.

I hear some of you say that this is not a viable basis for running a business. Change happening on top of change is chaos. My response is wishing for something not to be the case does not alter the reality of a situation. The world is changing at breathtaking speed and complaining about this happening is just not an option. However, contractors who think and prepare for the changing market will always be operational and relevant to the future market.

Contractors who come from the future will flourish 

Contractors must be continuously forward-thinking and focused on developing future business models. At the same time, they must implement a business model developed in the previous forward-focused period. This allows them to be applicable and able to meet today’s market expectations.

What I am proposing is contractors do the same thing I have been advocating for, for several years now. There is a need for ‘future fit’ regulation of the industry that assists in its productive, profitable and inclusive transformation.

The objective is ‘future fit’, well trained and appropriately remunerated workers. Then, these professionals can produce efficient, safe, sustainable, liveable, and affordable buildings for us to work, play, and live in.

In an August 2018 article titled ‘Governments must regulate the construction industry ‘eyes up’ I stated:

“My favourite footballer is the great Johnathan Thurston or ‘JT’ as he is affectionately known as.

JT plays with his ‘eyes up’. This means that as a playmaker, while he is always looking to do something when he has the ball in his hands like make a break, put another player through a gap or score a try himself, at the same time he is also conscious of the need to direct the team around the field in such a manner so as to ensure that the game is played as much as possible, on his terms.”

Contractors who come from the future will flourish, managing their business with ‘eyes up’.

For contractors to be successful in the future it will be less about cost and more about values.

I believe there is significant change happening. Principals and clients will take concern to certain factors when looking to engage a Head Contractor.

30 years ago, politics in America produced the saying, it’s the economy stupid’. This has characterised countless elections since, including in Australia.

In the construction industry, I believe that an equivalent 30-year-old saying would be ‘it’s the cost stupid’.

However, in a political sense, factors that will impact a person’s decision on who to vote for are changing.
The result of last Saturdays election confirmed that a range of social and governance issues were major factors influencing many people’s considerations when it comes to who they vote for.

In other words, it will not just be ‘it’s the economy stupid’ that will influence many people’s votes. Don’t get me wrong, the economy will remain a very important factor in the election. However, there are a range of other important factors as well.

What has all this got to do with the construction industry?

From a principal or client’s perspective, value for money will always be a very important factor.

However, I have been banging on for several years about the need for contractors to reveal other values, principles and standards that they stand for.

“If Taylor Swift were still singing songs of the same type she wrote as a 15-year-old girl and not giving any insights on her emerging beliefs and values, I believe she would barely rate a mention as an influential artist.”

“However, to the extent relevant, I believe that industry parties must be prepared to open their businesses up for greater analysis of their values and beliefs in a transparent manner.”

“The important message I am trying to convey to industry parties is that in 2021, they must be prepared to disclose to the marketplace more insight than, for example, competitive pricing and good quality work”

Final thoughts.

I have recently immersed myself in the Queensland Government and Gold Coast Council procurement policies. They clearly state the factors given weight to when determining who to contract with in their procurement policies, namely:

  • buying local;
  • awareness and observance of identified social considerations (e.g., environmental sustainability);
  • health and wellbeing of people;
  • opportunities for innovation;
  • ethical supplier’s requirements;
  • whole-of-life costs; and
  • financial health.

This is by no means an exhaustive list. In other words, the Queensland Government and Gold Coast Council are indicating their expectations. They expect Contractors to have specific values, standards, and commitments if they want to do business with them NOW. I have to say there is copious information published by these organisations in this regard.

Knowing the Government and major Council’s procurement policies is highly worthwhile for Contractors to understand. This applies even if they do not intend to tender work for them.

After a lag, I am of the view the private sector will increasingly follow suit.

The challenge for contractors is to look into the future and make a call on impending procurement trends and developments.

As I have previously stated, Contractors need to get in front of these changes if they want to be successful.

I will have much more to say in terms of likely new industry procurement values and standards in subsequent articles.

Contractors who come from the future will flourish.  

Not intended as legal advice. Read full disclaimer.
Michael Chesterman May 20, 2022

The insight you need, right in your inbox.

Stay up to date with all the important updates - legal and otherwise - plus get exclusive invites to events designed to educate and empower our industry.