The AEC Revolution and Navigating Cultural Change in Public Service
On February 12, 2021 by Oracle
For our latest “Trailblazers” profile, we spoke with Tim Mumford, project manager of Office of Projects Victoria. Mumford discusses the state of innovation in the industry, or the “AEC revolution” as he calls it, as well as how companies must encourage executive sponsorship to increase innovation and accountability in organizations.
Mumford speaks with Dr. Burcin Kaplanoglu, executive director, innovation officer at Oracle Construction and Engineering.
BK: What is your current role, and how has your career evolved since you started in the industry?
TM: I work as head of digital and innovation at Office of Projects Victoria. This is a state government role, so I work alongside the government within the public service and report to the Chief Engineer of Victoria. We have a purview over what engineers do in the states as well as the major infrastructure projects being led by the state.
Investing $100 billion (AUD) on infrastructure projects
The Chief Engineer and I were hired by the State to assist with technical decision-making. This is a new area for engineers and governments to work together. The chief engineer and I provided fundamental, technical, and pragmatic advice based on engineering and project management principles and a ‘bottoms up’ approach to infrastructure.
The Victorian state government is spending over $100 billion (AUD) on infrastructure projects for the foreseeable future. There’s a real interest to do things correctly because there’s a lot of skin in the game.
When I first joined, we conducted quite a few interviews like this one. The thing that routinely came up was the fact that the AEC industry is highly fragmented and, in general, a bit of a laggard in terms of innovation.
A recent McKinsey report highlighted that the construction industry is decades behind every other industry, including agriculture. That was quite a revelation.
A cultural change in public service
In the last two years, I’ve seen a cultural change—particularly in public service—about doing things more efficiently, finding new ways of working, and understanding what other industries, including manufacturing and industrial clients, do in terms of project management, contracting, and digital innovation.
The conversations are more intelligent than they were a year or two years ago. In the next two years, I predict there will be a big change in the way things work in the AEC community.
One of the challenges is that change on a day-to-day basis is hard to perceive. That said, when you see progress from a few years ago, we’ve come a long way. If you play that forward, in another two years, progress will be exponential.
The conversations become more intelligent and the expectations on individuals, systems, and processes become greater. I’m excited by where we are now—including where we should be in two years—and the shape and tangent of that direction.
BK: What does your view of the state of innovation in the industry generally?
TM: We have a long way to go, but progress is rapidly increasing. I look at technologies and systems like concrete extruders, brick laying machines, AI, iterative design, and manufacturing in prefab and think: “Wow! This is the beginning of Design for Manufacture and Assembly.” An AEC revolution is rapidly dawning on the industry.
High insolvency rates in construction
In Australia, construction companies’ insolvency rates are quite high. I don’t think we’re alone here. Insolvency is a global phenomenon that’s underpinned by the challenges in construction cash flow.
Many more conversations with insurers and investors must happen concerning risk, assurance, quality, and delivery. These parties need confidence that the industry knows what they’re doing, that this is the right project for them to do, and that they can make margins. These questions are forcing us all to have a good hard look at ourselves rather than pointing fingers at one another. It boils down to a perception of risk and who owns that risk.
BK: What are the biggest challenges you see for innovation?
TM: People; not technology. The technology is mature. It’s bringing people on for the journey. And the executive sponsorship is undoubtedly the biggest challenge to the journey
If there was a silver bullet, we would have done it by now. But empowering people and having an executive sponsor on the executive leadership team—or even the board—to be accountable is ever so important. They must take ownership of the change management exercise.
Organizational change management
On every board meeting, the change management exercise should be a standing agenda item. Someone should be answering what they’re doing, what’s the progress, how this will transform a company in the next two years, as well as the short and long-term goals. Executive promotion to ‘try and fail’ is also an important part.
The second part is empowering individuals who make decisions to seek opportunities for improvements. For example, one of our tier two constructors highlighted how they’d often get secure PDFs as part of the tender documentation projects. The PDFs were always labeled as “for information only”; it was never for reliance.
Unfortunately, that owner-led process costs tens of thousands of dollars for every single tenderer to convert that information into meaningful formats. It’s a wasteful and costly process.
In truth, if it’s just the way it’s always been done. then it’s time to change. The AEC change will be driven by these individual and meaningful conversations.
It’s empowering people to have those intelligent conversations because this is not about a competitive advantage. This is about uplifting the maturity of our industry in general. The cost of our choices is ultimately something that we should be acutely aware of and empowered to change. That’s the big opportunity.
Minimizing wasteful processes
These opportunities are sort of like a thousand paper cuts: If you’re filling out a payment slip to a sub-contractor and you type their business or tax number 40 times, that’s an awfully wasteful process.
A prime example of this is sub-contractors taking drawings and pricing them. Right now, many MEP contractors will visually count items of designer drawings: 20 valves here, 60 fire valves, etc.
The time devoted to this activity is ridiculous, but the risk of getting that count wrong is very high. This can—and does—erode project outcomes. I’m inspired by a small company here in Victoria (M2Count) that bridges this very issue. The program takes your drawings and gives you an accurate count based off engineering drawings and schematics.
If we all think about our workflows and what we do that’s repeatable and can be improved, the sum of those parts can make a greater difference than just rolling out one big system.
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Complex public infrastructure development programs are high-risk endeavours marked by cost overruns, delays, financing difficulties, and other challenges. Changing strategies at the top of the organization often aren’t communicated to individual projects, and risks found in one part of the project life cycle can be translated to other parts. With many projects underway at once, problems with one part of the program can quickly spread, wreaking havoc with the overall budget. Discover how implementing a program risk model can help improve project success.