Engineering Construction Transformation Challenges & Change Hurdles - How to Build Sustainable Competitive Advantage - Part 1: Setting the Scene
Fadi Bayoud
Geomatics | Real Estate - Engineering - Construction | Strategy & Foresight | Operations & PMO | Transformative Leader (Governance-People-Processes-Technology) | Write & Speak on Strategy & Project Management & AI
This is the 1st part of an article entitle: Engineering Construction Transformation Challenges & Change Hurdles - How to Build Sustainable Competitive Advantage
Introduction - Setting The Scene
E&C professionals are living in uncertain times where classical problem-solving solutions are not working due to business, technological, and social disruptions, in addition to the global macroeconomic ambiguity and uncertainty. Although many modern technical solutions touch on pain points, unfortunately they are applied in silos and don’t work on the holistic alignment of the complex business processes of project-based E&C industry.
When you ask engineering and construction (E&C) professionals if they “like” to change the way their firm operates, most will eagerly say “Yes”. If you ask whether they “want” to change, the “Yes” answers are uttered with less excitement because of the difficulties that these professionals are aware of. If the question turns into whether they “can” change, the answers turn into a whispered “No”!
As in all industries, E&C is flooded with business/management and technical problems (see Table below). However, the interesting aspect is that most of these problems are common across all E&C companies, with very few exemptions. These problems can be categorised whether they fall within the control of the firm’s senior executives or not.
In business thinking and practice, skilled senior executives, the “Management” (capital ‘M’, the persons who lead and manage the firm) concentrates on what it can control, do, and change, and leaves space for contingencies and scenarios for the issues that it cannot control. Why easily said than done? Because managing firms in complex industries is a difficult undertaking, and the engineering and construction project-based industry is indeed one of the most complex.
To help simplifying things (without being simplistic), we can consider two ecosystems that deal with value creation in the E&C project-based firms; the first is the Project Ecosystem that creates value; and the second is the Corporate Ecosystem that supports the value creation of the Projects Ecosystem. Any attempts of finding solutions that do not holistically align these two ecosystems will fall short to lead the firm successfully through the industry’s uncertainties, complexities, and disruptions.
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Each of these two eco-systems requires a different set of management tools and expertise. In more technical terms, the value creation in the project ecosystem requires project management tools and expertise, and this is where – understandably – most of the firm’s effort is dedicated towards. Despite its importance, engineering construction project management is unfortunately not handled as it deserves, and this is very apparent through the many problems that we are facing daily in the industry.
On the other hand, this value-creation (thru project management) must be supported, nurtured, sustained, and disseminated by the corporate; this requires strategic management tools and expertise, and these are what most of the firm’s are lacking. Skilful Strategic Management is lacking to an alarming level in in E&C firms.
What makes things even harder for E&C professionals is that these two ecosystems and their management tools and expertise must be aligned and linked to create the holistic value that Management seeks to actualise the continuous transformation that the firm needs to build a sustainable competitive advantage.
For example, a firm cannot reap the benefits of having an excellent Operations Director or an excellent CxO team when its project and construction managers and engineers are of poor or mediocre calibre! Likewise, great project teams cannot transfer their success to a strategic competency if the CxO’s are not strategic enough to exploit this competency and turn it into a distinctiveness that creates sustainable competitive advantage.
In the following two articles a framework will be presented to help improve the management of these two ecosystems. This framework is not new but is discussed in a way that touches on the challenges and opportunities that are intrinsic to engineering and construction.
Next article (Part 2) will cover Project Management: https://www.dhirubhai.net/pulse/engineering-construction-transformation-challenges-change-fadi-bayoud-1f/
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