The Future of the Design and Construction Industry
Construction Industry Conversations
From Old to New: The
by Dave Jepsen, FAIA Principal JCJ Architecture
About the Author
David Jepson, FAIA – Principal JCJ Architecture
Dave Jepson has been in practice for over 50 years with JCJ Architecture including offices in Hartford, New York City, Boston, Phoenix and San Diego. Upon graduation from Rensselaer Polytechnic Institute, he was commissioned as a Naval Officer in the Civil Engineering Corps and served as Assistant Public Works Officer for Naval Air and Fleet Operations on Okinawa where he was awarded the National Defense Medal. Through the years he has played leadership roles in a number of community and non-profit organizations and was elected to the College of Fellows of the American Institute of Architects in 2000. Dave is currently active on the Board of Trustees at the Cheshire Academy, Cheshire, CT where he was past Chairman. He is also a Trustee at the New Britain Museum of American Art, the Wadsworth Atheneum, the Children’s Museum of West Hartford, and Chairman of the Rensselaer Polytechnic Institute’s School of Architecture Leadership Council. While serving the Construction Institute over the last 20 years, he has held many positions including terms as Chairman of the Board and Chairman of the Advisory Committee.
Chapter Eleven
From Old to New: The Modern Challenges of Changing Industry Models
by Dave Jepsen
“Consolidations in the design and construction industry will eventually lead to firms that are capable of producing massproduced, high quality complete building offerings marketed on a high-level retail scale.”
The built environment as we now see it, and as one may see it in the future, has been shaped throughout the years by continuous evolution and change. Our knowledge of our history is often understood through what remains of our surviving architecture. In early times, the design and construction of significant structures was the work of a master builder, highly skilled in artistry, construction and invention. Building practices were highly dependent upon the skilled craftsman, simple use of materials and a focused workforce. The master builder or architect was highly acclaimed and occupied a position of great importance and status in society and was identified with their work throughout history. When industrial societies began to take hold, building projects of all types, sizes and complexities began to appear. No longer was it possible to achieve the desired results through the work of a master builder supported by simple crafts alone. Demand for economy of scale, personal comfort, financial performance and timely delivery changed the nature of the industry. In response, specialists in planning, architecture, engineering and construction began to emerge and organize into separate entities who, together, provided the skill, expertise and resources to achieve ever challenging and complex building
needs. This specialization led to the formation of businesses with great diversity in size, type, method of operation and unique expertise across the spectrum of the built environment. Significant building programs were often identified and known by the leading architect, architectural firm, engineers and builders. These participants were clearly listed on site construction signage and formed the triad of the three most important players in project implementation. Construction techniques, business practices and material resources remained (for long periods of time) reasonably simple. Average utilization rates 1 and productivity were extremely high and the increasing levels of complexities, needs and challenges in the building industry still required relatively little management.
The need for new construction was greatly influenced by periods of economic growth and contractions, and design and construction practices were driven largely by the need for economic return and predictable outcomes. As the increasing need for fiscal performance, quality product and timely results became the norm, new relationships and methods for working became necessary in order to survive in an ever competitive and growing building industry. The introduction of complex new technologies, management skills and advanced tools for both design and construction provided a solid foundation to keep pace with increasing pressures to fully accommodate user demands, community concerns, political directions, governmental regulations, worker safety, health concerns and societal aspirations. In order to ensure success, building industry providers were forced to diversify. Numerous
1 The term “utilization rates” refers to the amount of time a professional spends on producing work as opposed to performing administrative tasks.
specialists from many disciplines such as development, finance, law, business, design, engineering, construction and operations began to emerge. Each participant brought to the table valuable levels of focused expertise in order to ensure high quality results.
In decades past, simplicities in design and in building methods allowed participants to maintain high rates of utilization. Current organizations, both large and small, find that declining utilization is a direct result of the greater overhead needed to accommodate expanding administration support structures. Design professionals, for instance, find themselves spending more time and resources with project management and less on design and actual document preparation. Demands of clients along with more complex regulatory requirements have become leading factors in expanded overhead, thus reducing financial resources directed to actual project implementation. This is also true in the construction industry, where trade participants who do the actual work have become a smaller percentage of the overall construction effort. On top of all of this is a proliferation of extracurricular activities, professional organizations, continuing education and the impact of social media and technological communication. These factors have further reduced utilization rates with the hope that lessons learned will increase productivity and serve as offsets, thus allowing acceptable levels of profit to continue. This situation makes it more difficult for small organizations to compete to be financially viable and to deliver the high-quality results demanded in the marketplace. While there will always be a place for small specialty services and expertise, meeting even moderate building needs with the best possible results will
require the resources of large, well-managed design, engineering and construction organizations.
On the design side, projects tend to suffer from lack of continuity and coordination of assigned personnel throughout the course of work. For example, the lead designer creates a wonderful, aesthetically pleasing vision and a plan to satisfy a particular building need. However, this individual moves onto other challenges and is often negligent in following up on oversight as the project progresses through numerous changes and modifications made by less qualified participants over the course of work. Cost control, management practices and just about every other project requirement is impacted with less than perfect results. Things do not flow smoothly and mistakes are common with many misunderstandings as to who is responsible. This situation is also reflected on the general construction and subtrade side as well as with many other specialized participants. Where design follow-through is weak, decisions end up being made by the builder based on lowest cost, ease of construction and time. Results are further compromised, owners end up confused and the total undertaking is a very unhappy experience. Along with unrelated participants and those with lack of experience, there are currently just too many moving parts, leading to a high probably for failure. When you add to this all of the other pressures of staying current along with increased overhead and declining utilization rates, the challenge becomes to stay economically viable and competitive just to survive as a functioning organization.
In the current environment, both building owners and the public continue to be more demanding and expect top results at less cost and in less time with complete predictability and continuous performance. Owners come in all types and sizes as do the projects they sponsor. For some, it is a one-time experience to be involved with a building project, while for others it is a lifelong endeavor. Owners expect the use of technology to be state of the art and at the center of building providers’ working efforts. They expect design excellence, the highest level of functionality and lasting performance. They want their projects to be the pride of the community and its neighbors. Owners typically do not like to have to make many decisions, however they expect to be consulted at the right moments and expect that the right directions and choices will result. Owners do, however, want to know what they are getting in especially great detail. Fiscal certainty and schedule are foremost. Approvals can be highly centralized or dispersed and shared.
Current building industry firms include an array of many different business models, with the most common still being the traditional owner, builder, architect and engineers practicing separately. Present building industry shortcomings are resulting in further pressures on building industry participants to develop new approaches in meeting marketplace needs and demands. In many cases these disciplines have taken on new forms and sizes from individual practitioners to large multidiscipline corporate giants including public ownership. Most all companies in the United States who are building industry participants are single focus and not multi-product conglomerates. However, in other countries (and especially
Asia) building industry facilitators represent just one aspect of a larger spectrum of products and services. In some cases, governmental, public and even private partnerships form the core building team.
It is expected that, instead of continued fragmentation, diversity and division there will be new forces acting to bring construction industry providers together and under central control. These trends will apply across the entire building spectrum including small building programs, residential structures and large highly sophisticated construction projects of all types. Successful players will coalesce and become multidisciplined organizations supported by financial strength and technological capacity. Building design and construction will be met by single enabling companies who will provide complete control over the scope, schedule and implementation of building programs. Boutique specialist organizations, relationship businesses and single focus groups will diminish in number. All participants, planners, designers, consultants and constructors will simply be under the control of a large organizing leader with great management and financial skills. It is already trending that project site sign identifications have replaced the traditional list of owner, architect and builder with other enabling organizations, developers, managers, financiers and political entities. Enabling companies will be in a position to serve all aspects of a building program to insure successful results on a continuing basis. Such attempts at consolidation have already taken place or have been attempted in the past with varying levels of success. Most of these efforts are based on single, sophisticated building types requiring highly specialized expertise or are product centered.
New owner and provider business models will need to emerge in order to sustain future built environment service needs. These models will be in most instances, highly centralized, allinclusive and organized around the concept of incorporation of high quality building components and assemblages. Delivery systems will be product supportive and oriented. Pricing at all levels will be predetermined based on purchasing formats allowing for predictable, precise accounting. Simple estimating will no longer be a viable approach. There will be the ability to precisely fix delivery methods and timing. These trends will evolve based on current and future technological innovation as an enabling platform. Design will be by invention and will be accomplished either by large design-build companies in a research mode or by highly specialized boutique firms of all types who will only serve markets for design innovation through computer technologies, building component and systems research.
The building industry will continue to involve an increasing number of new types of players, technological advancements and regulatory change. The environment is complex, fragmented and polarized with more choices than everconsumer products, investment vehicles and communication platforms continue to multiply. This dynamic is further reflected in the design and construction industry by the multiplicity of aesthetic appearances utilizing differing building materials, products, shapes and forms (often within the same project). Less is no longer more. More appears to be better. Contextualism and continuity are for the most part absent. New is favored over old. Civil works are accomplished at a scale never seen before, at an ever-increasing cost and with plenty of
controversy. Providers of design, engineering and construction services further reflect diversity in their make-up, ownership, organization, management styles, accomplishments and direction. The setting is that of fragmentation, uncertainty and potential lack of control. The future will continue to be marked by evolution and change where new ideas, alliances, laws and invention will be reality.
Consolidations in the design and construction industry will eventually lead to firms that are capable of producing massproduced, high quality complete building offerings marketed on a high-level retail scale. Such products will be created and sold by large established companies who will have the financial resources and management skills to package and market across the entire built environment spectrum. Inventive start-up companies will also become successful players providing for highly energized competition. This trend is already evident in the current availability of many high-quality component products and systems. The next phase will be to augment and package such elements along with the best possible leadership to provide readily available, high quality, predictable fiscally sound and complete building projects.
This will require changes in current licensing, regulations and building practices at all levels as well as adaptation by various providers and specialists in order to effectively take advantage of such integrated delivery methods. New enabling companies may form, existing companies may realign, and individuals may group together to effectively compete and meet the demands of an ever changing and evolving marketplace.
Future trends will, as a result, favor current design-build and turnkey approaches. Evolution of these delivery methods will lead to even greater integration and prepackaged construction results. Leadership will not necessarily come from the ranks of current providers but instead shift to large multi-product corporations or highly specialized enabling firms. Qualifications will require a high level of management skill, marketing, finance and political dexterity. Planning, design and construction, for large part, will be predetermined by use of standards and highly developed components skillfully packaged to compete in the marketplace. Current and projected technological advancements and innovation will be essential to make this possible. Building designs for all types of structures will be readily available in a wide variety of configurations and styles. The management of design offerings will be arranged to allow for modification to adjust to specific user needs and site characteristics.
Sophisticated programs will be developed and available that will even allow computerized site and building design without traditional architectural-engineering involvement just as driverless cars will be the future norm. Design effort will be inventive, led by enablers employed by large providers or small, highly focused firms. Actual projects will require carefully administered operational techniques and strategies.
Highly developed programming and management approaches will set the direction for design and implementation based on extensive use of standards, proven products and predetermined building components. These can be assembled in a variety of ways based on established templates and configurations.
Presentations will be virtual and in video format in order for the marketplace to be fully informed as to what they are getting. Every detail will be fully delineated and available for review. Opportunity for comment and modification will be easily accommodated. Actual construction will be implemented by the use of hand held devices that will fully document and coordinate the work of all trades during the assembly process. Once completed, every aspect of a building’s performance and operation will be readily available at the touch of a button. Information regarding ongoing maintenance will be easily available and automatically transmitted to those responsible for follow-up. Energy usage and preventative maintenance will be projected and automatically accounted for in budget projections. In the future there will be a high level of predictability, availability of data and simplicity of usage. Packaged building components will be highly efficient and aesthetically coordinated for optimum appeal.
Building in the future will be marketed more as complete offerings, not too different from automotive and other consumer products. Designers, engineers and contractors will simply be team players imbedded in the structure of large corporations or sophisticated enabling companies. Professional service organizations will need to adapt to ever-changing marketplaces to remain relevant as participants in shaping the built environment. So, for the most part, those shopping for facility needs including residential, commercial, institutional and all forms reflective of the built environment will simply go online or to the “building store”. Management will become the dominate force, and this along with overhead pressures will
consume the most hours and be the major determinate of future industry directions.
