Day by day agile management approaches become more popular in many industries and in opposition some of the agile practitioners debate if Agile Management is dead or reincarnated. The situation is quite contradictory.

Meanwhile some construction professionals are trying to understand:

• What is Agile Management and how is it applied in the construction industry?
• What are the key elements defining Agile project management in construction?
• In what areas can Agile help the construction industry?
• What are the benefits Agile Management approaches bring and the challenges they resolve? and
• How does Agile Management work in practice in the construction industry? Etc.

Forget everything you have heard about Agile Management and stop questing if Agile Management approaches are suitable for the construction industry. This is an endless and useless debate.

Instead, let’s focus on the question: “how can we improve the way we build?”. It is clear that, we waste people’s money, motivation and time for poor quality and user experience. We harm the environment and waste the earth’s raw materials. We are all on the same page, that we need to improve the way we work, and there is always room for improvement. Moreover, the world is changing and like all industries and individuals our industry and people must find a way to adopt and survive.

In 2010s WEF (World Economic Forum) hired The Boston Consultants to prepare a comprehensive report about the challenges and remedies of the Construction industry, acknowledging the unproductive way of our industry started to threaten the living standards of the societies and the environment.

According to the report, the construction industry has 6 challenges for improvement, our clients are not satisfied with our performance under these 6 topics:

1. Delivery Performance: We need to deliver the projects in accordance with our time, cost and quality commitments.

2. Life-cycle Performance: We are responsible for the post-delivery performance of our buildings.

3. Sustainability Performance: Construction works and buildings are responsible for a great deal of green gas emission and climate crisis.

4.     Affordability: Because of the waste and unproductive way of construction, there is not enough resource to compensate the requirements of the people.

5. Disaster Resilience: Buildings and infrastructures must be resilient to earthquakes and severe weather conditions because of global warning.

6. Flexibility /Liveability and Well-being: We are responsible for well-being of people and societies. Our buildings should provide a peaceful environment for people and adopt to changing requirements of people.

Before we jump into the solution let’s think a bit more about the reasons of these challenges:

We have been realizing our work with the same model for centuries without questioning the consequences. We can list some of our basic impediments due to our business model as follows:

1. Disintegrated and Highly Fragmented Value Chain: From the idea phase to commissioning phase we have plenty of silos across the value chain. We divide work in sequence like: Pre-design works, pre-construction works, construction works, and post construction works, in fact there is a lot interaction between these phases. And in all phases, we have silos of work packs in interaction like infrastructure work packs, structural work packs, electro-mechanical works packs, architectural work packs etc. And all these work packs are realized by different sub-designers, suppliers, and sub-contractors. We end up with more than 50 contracts for an average size construction project which lasts 2 to 3 years. 50 Contract sides mean 50 topics for conflicts between parties and lack of collaboration. And value and priorities are distributed within 50 parties. This situation goes worse when multiplied by the number of departments engaged with the same project within each company participating. So, the priority of the client and the users fade away as the project elaborates.

2.Contractual Impediments: When we are preparing contracts, we assume that everything is crystal clear, and nothing will change. So, we are trying to make the supplier accountable for everything with turnkey lump-sum contracts. When to change something in design or construction phases is needed then big negotiations and blame games start.

3.Poor Know-how Development: To decrease costs the companies prefer new employee fishing when the project starts, and layoffs after the project completions. So, no know-how is transferred to the successor projects and no know-how is accumulated in the teams.

4.Poor Innovation: The edges of work packs have the maximum potential of innovation with optimization in collaboration. But as when each pack is undertaken by different subcontractor with severe contractual penalties, every team focuses to fulfill their responsibilities as described in their contract, there is no time to search for innovation.

5.Poor Teamwork: We buildup new teams with people who don’t know each other and haven’t developed trust yet. We assume that gathering proper CV’s is enough to buildup good performing teams.

6.Talent Gap: We have shortage of workforce in blue and white-collar employees and young generation doesn’t prefer our industry because of unsuitable working conditions, low-income rates, poor work and private life balance and unemployment risk after the completion of each project. Though there is a high rate of unemployment in the industry there is a talent gap at the same time, as the industry’s working model doesn’t allow to invest on people.

7.Poor Digitization: Digital companies don’t prefer to develop solutions for our industry because of the resistance, low profit rates and low capacity of digital transformation of companies. As mentioned in the paragraph about talent gap, young generation doesn’t prefer our industry and we are getting old as industry average. So, it is hard for us to develop capability to use digital technologies. Poor digitalization means lack of data to use for management and improvement.

As we are poor in digital technologies, we cannot automize the work, share the information, become transparent and build up trust. And we end up with unproductivity, high cost and poor time and quality performance.

This list goes on. I’m sure most of construction professionals are on the same page with these issues and have many other issues to add to this list.

If we return to the above-mentioned report of WEF, Shaping the Future of Construction, it is recommended to redesign our industry under 6 topics:

1.     Building a virtual world,

2.     Factories run the world,

3.     A green reboot,

4.     Attract new talent and build up required skills,

5.     Integrate and collaborate across the construction industry’s value chain, and

6.     Adopt advanced technologies at scale.

Here we are talking about a shift in all aspects. And when we are talking about transformation, it is more crucial to answer the question “how?” rather than the question “what”.

Then our question set must be:

1.     How can we build a virtual world?

2.     How can we increase prefabrication?

3.     How can we start a green reboot?

4.     How can we attract new talent and build up new skill?

5.     How can we integrate and collaborate across the construction industry’s value chain?

6.     How can we adopt advance technologies at scale?

We need to change because the conditions have changed and will continue to change. We are in a “VUCA WORLD”, that term formed with the capitals of Volatility, Instability, Complexity and Ambiguity.

Agility means being adaptive and thriving amid VUCA environments. And Agile management mindset is trying to find a way to survive and thrive in change.

Now we can discuss how agile mindset and management approaches can help us to achieve these goals.

Let’s improve the way we build and be agile.

In the next sessions we will discuss what is being agile and what it means for the construction companies and project organizations. Stay tuned for more.