When The Revolution Comes, Everything Will Be Beautiful

Our first guest post is an very interesting one, so without further ado I will let Dan introduce himself. Enjoy and please find time to comment!

Engine[er]

Guest post by Dan Engström. Adjunct Professor at Luleå University of Technology (www.ltu.se) and industrial researcher at NCC Engineering (www.ncc.se). Associate professor of architecture. Would have continued as a structural designer, but too many colleagues with actual talent realized the merits of indoor work without hard manual labour.

Change agents of the World, unite! We need to restructure our industry.

Looking around in our sector, it becomes clear to me that we are in trouble. We are not too far off the situation that the struggling – dying – traditional audiovisual industry is in. They are facing a paradigm shift in technology and client habits with existing business models. They are marketing products (discs) when clients increasingly are asking for services (streaming). The old business and organizational models in our industry are also put under such strain that we need to rethink the way we do business. I am not suggesting we throw everything out as if our mature industry were a greenfield to build a brave new world on. But I am arguing (as strenuously as I am able) that we need to develop and implement a new logic to our work. Sooner rather than later, we need to fundamentally change. Let’s call it our own version of Perestroika, the effort to restructuring of the stagnating Soviet Union. One major difference though. We need to succeed.

Let me motivate this rather startling call-to-arms with a look at my own hunting grounds – the Swedish housing industry. If the number of apartments built is the main indicator of the success of national and local politics in my country, the cost development of multi-storey housing has become the main indicator of the success of our construction industry. And maybe you’re already seeing where this is going.

Since the mid-80s, the number of apartments in one/two-family dwellings and in multi-storey buildings respectively has developed surprisingly similarly. This development seems to be changing. Now, roughly speaking, 7 out of 10 newly started apartments are located in multi-storey housing. According to Statistics Sweden, during the first nine months of 2011, construction of a total of 16,046 apartments were started in Sweden. This is down from the 18,570 apartments during the same time in 2010.

When it comes to the key metric, the cost development, how are we doing? It is not too far-fetched to use the Retailer Price Index (RPI) as an indicator of the purchasing power of our clients. Let’s map that against the Construction Price Index (CPI) of multi-storey housing over time. Let’s start in 1968, i.e. the early days of the major housing projects. A graph of these cost statistics is certainly not a pretty sight. Since the mid-90s, production costs have sky-rocketed compared to the purchasing power of our clients. 

 Part of the explanation is of course that the building codes require us to build with increasingly technical quality, so the graph in a way compares apples and pears. For example, during the time period in question, we have moved costs from the service-life (say heating) to the investment in production (better building envelopes). But having an explanation for the disparity does not help us. What matters is the gap between the the one graph, the one that indicates the funds available to clients, and the other one, the one that indicates what they can expect to pay for their apartment. Sometime soon, people will not be able to afford to buy apartments in the houses we build. Even the dip during the mid-90s had very little to do with our own development; it was due to a major recession when the government switched from subsidizing the housing market to making it their cash cow.

The striking graphical impact of the graph stands. We. Are. Failing. That is why we need Construction Perestroika. Sweden too has had our share of Latham Reports and Rethinking Construction reports. I now call for action, of the implementing of the findings in real business. The one main change that we need to make is simple to describe but very hard to pull off: changing from project-based logic to product-based logic. In my book, that’s our Perestroika in a nutshell. We need to stop giving clients wish-lists for every project and start preparing clients offers where that is possible. Develop systems-building. Learn from manufacturing, with concepts like Lean (focusing completely on client value), Mass customization (combining volume with client choice) and incremental improvement (articulating our methods and processes and letting hands-on workers decide how they should be improved). This involves keeping our value-chain together, built on interactive business trust, and making substantial investments in work between projects, which is something we normally just do not do.

We’ve developed building products in the small scale (like the sports hall we’ve developed at my company, see link below) but we have a whole sector to change; from the brief and contracts of clients to the design, production and supply-chain. It will be a very long haul to bring our existing structures to bear on these new ideas and new business. Imagine for example that we reengineer the revenue streams for professional services so that they reflect the value created for the clients. Clients seriously do not care how many hours we put in. Substituting metrics for real value for the time-sheet is logical, doable and necessary. But it affects our business to the core. Are we up to it? Arguably, the Perestroika of the Soviet Union brought out the hidden conflicts between the republics and made the union impossible to hold together. Like the audiovisual industry, clients will soon push on to Construction Perestroika – строительство перестройка for the flavour of it. When it takes off it will soon separate the early adopters that will survive and the hard-of-hearing ones that will not. If the old structures cannot adapt to new client requirements (read: “we’ve had it”) then new players will enter that can.

When The Revolution Comes, Everything Will Be Beautiful.

Dan Engström

Dan's [email]

Dan's [Blog]

Links and references:

·         Perestroika: http://en.wikipedia.org/wiki/Perestroika

·         The number of apartments built over time: http://www.scb.se/Pages/TableAndChart____19985.aspx

·         The number of apartments built 2010 and 2011: http://www.scb.se/Pages/PressRelease____323744.aspx

·         Links to Swedish Housing Statistics in English: http://www.ssd.scb.se/databaser/makro/MainTable.asp?yp=tansss&xu=C9233001&omradekod=BO&omradetext=Housing+and+construction%26%239001%3B=2&langdb=2

·         Trash the time-sheet: role models: http://www.verasage.com/ and motives: http://iloapp.mickla.se/blog/change?Home&post=7

·         Building product sports hall: http://iloapp.mickla.se/blog/change?Home&post=8  

·         Systems-building: http://iloapp.mickla.se/blog/change?Home&post=10

·         When The Revolution Comes, Everything Will Be Beautiful: a powerful album by the United Sons of Toil from Madison, Wisconsin, available for the price you are willing to pay at http://music.unitedsonsoftoil.com/.

Engineers are like Homeless Bums [Transitions in Construction]

"Homeless people, like the rest of society, have goals that, if not met, can lead to feelings of loss. Even though homeless people may have some supports, their disconnection from society and inability to achieve basic goals may lead to low self-esteem" Frederick A. Diblasio , John R. Belcher

For us Engineers, LinkedIn is fast becoming a virulent breeding ground for many cool existential engineering debates. It is also managing to provide us with a forum capable of bearing the seeds from a few perplexing engineering problems too.

Off the back of a LinkedIn discussion around the pay & wages of Engineers [here], has come some rather rare opportunities to take an engineering analogy or two for a test spin. Let me share with you a great attack, parry, and riposte if I may.

It was mentioned that a fellow Engineers suggestion to "stop moaning about pay and just get out there and make some money" was akin to telling a homeless person to get a job or asking a depressed person to cheer up. Facile and less than constructive. [Kat Lai, LinkedIn Discussion, Structural Engineer – Group]
I believe that we are more like homeless people than a person with depressive tendencies, but they are in some way linked.

One of my close family members was made homeless for a while. He was a great guy - but there is no easy way to help someone who does not wish for or indeed need the assistance. You see I had come to the conclusion years ago that those of us who find themselves becoming trapped in these ill-conceived circumstances, will follow one or several of these lines of action;

1. Shocked into taking action. This appears as an explosive reminder to avert a life disaster, and they use this realisation to do something about it. Most of these will find a way to resolve their problems, and self-heal along the way. Highly motivated, if in a retrospective capacity.

2. Making do. Critically this involves the down trodden to loose self-belief and eventually accept their circumstances. Upon further investigation you will find that they genuinely believe that this is all they deserve out of life. Any attempt to help them needs to first tackle the key reasons why they are content to languish, before galvanising them for their triumphant return to status.

3. Addiction. The person is addicted to a particular 'thing' or 'way of being' which works against their currently held status. It is inevitable that they will fail. Until the addiction has been broken, then they will continuously fall short of the necessary motivation to raise their status back to the norm.

4. The Tribe. Some people choose this way in life because the alternatives are way too complicated. In society, we build highly dynamic groups of friends, where status, empathy and acceptance form a social understanding which can be tiring to some. The thought of becoming a member of an uncomplicated tribe who never judges you, is an enticing idea. No internal judgement, status free, uncomplicated.

There are of course lots of reasons why someone might become homeless, and the majority of them offer opportunities of return to status. For example, loose a job - find another job. This is obviously not as easy as just writing it.

For this post, I would like us Engineers to think on the 4 points above and try to understand how we can turn our need for greater 'pay and status' into a plan for the future.

If we are 'making do' with our position, then we have to understand the hidden reasons for our inaction. If we are addicted to a 'way of being', focussing only on our own business and career, then we have to begin to wean ourselves off this selfish behaviour.

Finally, if we plan on making this philosophy the secret mantra of our 'tribe', as many generations of Engineers have do so before us - simply because it is a less complicated existence... then it's about time we admitted to it. Time to move on, I think.

This post raises some important parallels between Structural/Civil Engineers and the homeless and you can also find it on Dr Dan Engström's incredibly interesting construction futures blog-site, Transitions in Construction.


Drop by and offer up a comment, I'm sure that he would love to chat to you all.




Engine[er]