Aarni Heiskanen is the Managing Partner of AE Partners, M.Arch, helping AEC firms innovate and re-energize he also blogs on AEC-Business.com. We recently picked his brain about how AEC professionals can invest more in business development and innovation. Here’s what he had to say:
Why do you think it is that some AEC professionals are not more invested in the business side of their industries?
My experience is that AEC professionals are mainly interested in doing and managing projects. Their education has prepared them to work in the business, not on the business. They accept the conventions of the industry as given, often ignoring innovative ideas. I would expect that contractor continuing education, for example, would inspire students to think about the business side of their profession.
Another problem in many companies is that owners and managers don’t think strategically. Few companies have a vision of their future. They work from bid to bid, project to project.
Why do you believe it’s so critical that AEC professionals focus more on business development?
The world around the AEC industry is changing at an accelerating speed. The change creates both challenges and opportunities for the AEC industry.
Customers expect the same level of service from AEC firms as they get elsewhere. For example, they would like to be treated as valued customers, not as a disturbance from the vendor’s point of view. Customers want quick and easy online services. They also want to be confident in getting the results they were promised, on time and on budget.
New technologies open up huge opportunities for information management, collaboration, and customer service. Digitalization of processes is a hot topic; robotics and Internet of Things (IoT) are emerging. I also expect that artificial intelligence will eventually enter the industry. Large projects have so many requirements, participants, and regulations that it becomes a huge task to manage everything manually.
Business model innovation is something that is almost entirely missing in the industry. Companies outside the industry are doing it already, so change is happening, whether we are involved or not.
What are some of the traditional strengths of the AEC industry?
I’ve always admired how well projects are done overall. By contrast I’ve noticed how often IT projects fail due to immature project management practices and lack of skills. Failures like that would be out of question in the AEC industry.
The ability to collaborate efficiently with ever-changing clients, partners, subcontractors and manufacturers is another strength worth mentioning.
How can these professionals start creating a strategy to grow their businesses into the future? What should they be considering right now?
They should start by asking one question: What is our purpose in business? It is a tough question, but thinking about purpose makes the next steps easier. A good strategy should answer all these questions:
- Who are our ideal customers, and what do we offer them?
- What do we need to fulfill our customer’s expectation? What skills and education we need. What contractor requirements do we need to satisfy?
- What do we want to be known for? What’s different about us that is of value to customers and other stakeholders?
- How will we make money? How do we want to grow?
Most companies in the industry share identical business models. Now would be the right time to evaluate whether to continue down that path or try an alternative.
How can these professionals foster a climate of innovation and change?
It starts with the management of the company. Management should encourage and support experimentation. Experimentation is a great way to explore and test new ideas, and it can even take place during projects. Collaborating with clients, partners and people from other industries can bring about new ideas and unexpected solutions. AEC hackathons are perfect places to get experience on rapid problem-solving and prototyping.
Another great way to foster innovation is to work with and support start-up companies. They don’t have the constraints of established companies and can bring about change in unexpected ways.
When it comes to construction industry innovators and game-changers, who sticks out in your mind as being ahead of the pack? What can we learn from them?
There are certainly many that I could mention. Skidmore, Owings & Merrill LLP (SOM) is one of the biggest in its class in the world. Innovation is an elemental part of their strategy, as it should be for a company of their stature.
From my home country, Finland, I’d also mention Fira. They are changing the way contractors operate. They see construction as a service and apply service design principles in their business development. Instead of thinking of construction as technical production, they want to understand their customer’s business and define what to build together. They also employ experts from other industries.
What are the most interesting or exciting construction industry innovations or trends you’re observing right now?
Digitalization of business processes, big and open data, and IoT have the potential to change how we do business and interact with customers, partners, and society at large. Integrated project delivery and lean construction are changing how we construct. 3D printing coupled with robotics can disrupt the industry in the long haul. Sustainable energy technologies are also developing rapidly.
I believe that we should also follow what’s happening in the consumer world. People are constantly connected and online, and gadgets monitor and report their health, for example. Connecting people with the built environment presents new business opportunities.
Who in the AEC industry should other professionals be following right now?
The way the construction industry in the U.K. is adopting BIM is impressive. Professor Arto Kiviniemi at the University of Liverpool is a great educator and advocate of smarter ways of construction.
In general, AEC industry professionals tend to stick to their own circles and within their own comfort zone. I’d advise them to mingle across professional barriers. Connect with thought leaders, innovators and researchers from other industries and even other countries. Another source of inspiration must be consumers. What they do today will affect the construction industry tomorrow.