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The construction industry has been attaining a lot of success. This year, the major contribution has been the shift towards digital technologies. New tools are helping contractors simplify their business processes by automating repetitive tasks.
A few years back, construction was the least technologically advanced sector. However, the pandemic has forced contractors to push their boundaries and work smartly in this highly competitive market.
To learn how digital tools are transforming the way contractors work, we interviewed industry expert Chad Pearson.
Who Did We Interview?
Chad Pearson is the Director of Business Development for a reputed organization and was one of the speakers for the Construction Financial Management Conference by Associated General Contractors of America (AGC) and Construction Financial Management Association (CFMA), this year.
Chad brings a unique perspective to the trades, mixing 15 years in construction technology with careers in law enforcement and 40 years in the combat arts. He helps subcontractors unite their teams with technology while coaching his teammates on handling pressure in VUCA environments.
I would say both yes and no to 2022 being a digital year.
Yes, as COVID created a digital boom that forced the industry into greater tech adoption due to remote work.
No, as the speed of change and remote work created new challenges that prevented contractors from realizing this digital boom's full value.
Construction is a VUCA industry (Volatile, Uncertain, Complex, and Ambiguous) where the highest performers are both physically close to each other, and the tools and products they use align with the team's skills and processes. The digital boom and remote work created a misalignment between products, people, and processes.
Adding to the above, I believe the industry needs to align products, people, and processes in ways that work for construction. The biggest challenge here is that technology's fast-paced culture conflicts with the construction culture, where speed kills.
Investors and leaders in ConTech often define growth in terms of profit, speed, and shareholder value. Still, in the chaotic construction world, growth depends on the performance, positivity, and physical and mental fitness of the labor force, which is constantly under pressure.
So even though technology can help ease the pressure on the industry, the pressure prevents the adoption of the technology that can save it. It's an ironic catch-22.
If technology companies are willing to expand their scope to include services designed to overcome this catch-22, the industry should be able to align products, people, and processes. The problem with this, however, is that it would slow their growth.
Speed kills in construction, but speed is core to Contech. This is a huge challenge to overcome.
As a realist, I think we'll first see a drop in production over the next year or so as the industry closes the gap between the pace of technology and the patience needed in construction.
We may also experience a production 'plateau' for another year or so as technology is a tool like anything else, so, only the teams who invest the time and attention into using the tools 'well' will begin seeing the gains.
It may take a few years for us to see a critical mass of the industry using technology well enough to see meaningful change in overall productivity.
I 'predict' that around 20% of contractors, who are 'already' prepared for the uncertainty of the next 5 years, will secure approximately 80% of the work.
I think this top 20% includes contractors who have already invested in the following;
1. Strong team cohesion and who has brought teams back to the office.
2. Have material and labor mitigation strategies already in place, such as warehouses, prefabrication shops, and strong internal safety & training programs.
3. Established technological infrastructure.
4. An established critical mass of digitized workflows.
I believe the other 80% of contractors will struggle to retain the remaining 20% of work as they are simultaneously trying to catch up to the level of quality and service provided by the more prepared contractors.
I believe this prediction will come true because the contractors who are prepared will be able to provide customers with the most certainty, during the uncertainty of the next five years.
The contractors who are not prepared will be more vulnerable to material escalations and delays, labor shortages, and a lack of financing, so they will be adding uncertainty to an already uncertain landscape, which customers will begin to shy away from.
Cohesive teams will prevail.
Chad comes from a diverse background and has served the Toronto Police Service for seven years. His education includes a B.A. from the University of Guelph, Crisis Resolution, Defensive Tactics and Use of Force, CBRN Response (Chemical, Biological, Radiological, and Nuclear), criminal investigation, and outlaw motorcycle gang liaison work.
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