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UKGBC – A Plan for Growth in a Resource-Constrained World

by Mel Starrs on May 30, 2012

in Strategies & Consultations

This morning I went to the launch of the ‘business plan’ I blogged about back in March. All the usual suspects gathered in Kings Place near Kings Cross for a two hour romp through the report in a Dragon’s Den style format. I tweeted some of the event (once the wifi was sorted out) as did others – the hashtag was #PlanForGrowth.

In addition to the report (we all got a paper copy), there are loads of supporting documents on the UKGBC website (I’m not sure if you need to be logged in to access them). And of course, you can download a copy of the report too.

So did the UKGBC manage to meet their original objective:

By developing PEST-based scenarios for future operating environments, and conducting SWOT analyses to determine a range of strategic options, the mega company will decide which divisions should be expanded, which ones will probably have to be wound up (and when), and which new ideas need to be incubated or accelerated, based on the pursuit of high value, low carbon products and services.

(This was the scope according to my previous blog). Oddly, no.

What we got, instead of a business plan for ‘UK Built Environment Plc’, was a collection of 5 ‘ideas’. I think Paul King may have over-egged their innovativeness in his introduction, as it turned out all five ideas can be found in the marketplace already, at small scale (this was picked up by various people on twitter). I won’t look at each one individually, they are listed below:

  1. Community Collaborators
  2. You Design & Build
  3. Liveable Places
  4. Great Home, No Hassle
  5. Use Space Well

But this is not a business plan. These are business models and products.

What I had hoped for was a strategic vision of where the sector would shrink (and it most definitely will) and expand. I wanted to see the PEST analysis set against a SWOT analysis – what are we as an industry good at, and where are our weaknesses. There was a great deal of work done on the PEST analysis (I’d recommend downloading the Excel spreadsheets and having a read), but how they moved from there to the 5 ideas seems an odd tangent.

In conversation afterwards (and in the key insights section of the report), many felt the process was more important than the outcomes, and I’d agree with this. The five ‘ideas’ seem an odd distraction from the main value of the exercise.

A key overarching theme was placing the consumer (or as Ed Gillespie said – people) at the heart of the business proposals. A sound tactic, but the effect of framing the business ideas in this way for me highlighted the risk that any entrepreneur who had the capital could come in and deliver the service – the competitive advantages of the construction industry delivering any of the ideas were not highlighted. In fact for at least two of the ideas, I know existing companies in other sectors who would be much better placed to deliver them than ‘UK Built Environment Plc’.

Chris Brown of Igloo gloomily stated that “the construction industry is dead”. I hope he’s not right. What are the strengths and weaknesses of the industry and how can we ‘sustain’ the industry going forward? For me, this report didn’t answer that question. I am holding onto the hope that the Green Construction Board Route Map will address some of my concerns.

I didn’t mean for this blogpost to turn out quite so negatively – and I’m not knocking any of the individual ideas. Plenty of people in the room and on twitter seemed enthused and invigorated by the report. What it has done for me is kick off some blogpost ideas on company governance in the construction industry (private equity vs. LLP vs. PLC) in relation to sustaining our industry – I do think we will need new business plans to survive (speakers today included Duncan from Verco, Sally from Gentoo and Chris from Igloo – all pioneering new approaches to running businesses). New paradigms of employee ownership and vehicles such as CiC (community interest companies) fascinate me and was more what I was expecting from today.

Those who know me in real life will know I’m prone to coming at things from a glass half empty angle. In any proposition I need to know:

  • who’s going to pay for this?
  • will they pay enough to make it worth our while doing it?

In other words “Show me the money”.

  • http://twitter.com/fairsnape martin brown

    Interesting comments Mel. 

    My thoughts on reading were that we are only now really starting to understand what rethinking construction entails. Its not only about what we do, but how we do it and way the we are structured. You are right that corporate governance and new structures are the future in sustaining our industry going forward. Old school thinking may be the biggest barrier to Plans for GrowthThe comment that construction is dead is interesting, and chimes with an expression I used many years ago in describing the “industry formerly known as construction” We are facing interesting and exciting change – with increasing emphasis on transparency, social business, social value and CSR. Construction is far from dead, just morphing.

  • Mail

    Just skimmed the document (I agree Mel, it’s hardly a business
    plan), but picked up a couple of interesting bits. I was impressed to see these
    up-front observations/admissions:

     

    ·       
    Business decisions are made on
    the basis of short/medium term profit, not the long term: capital costs are
    king

    ·       
    The industry makes money on
    variations, which creates legalistic and sometimes conflicting working
    relationships, and impedes partnership working

    ·       
    The industry believes that it
    knows what sorts of buildings consumers want to live/work in, and these tend to
    be traditional in style and production methods

    ·       
    There is stigma around renting
    in the housing sector, and buying is the ultimate goal

    ·       
    Energy consumers blame
    suppliers for high utility bills, not the building, or their usage

     

    Would have been even more impressed if
    a sixth – that profit from speculating on rising property values will have to
    come to an end, and jolly good thing too – had been included as well!

     

    From what I hear, the business with
    variations and general blame-shifting is very corrosive. I know this is an
    issue that Neil May gets passionate about, and I’d love to see it discussed
    more widely.

     

    A lot of the structural issues are surely
    about waste of all kinds, at its worst, huge unwanted buildings standing empty.
    I think of the peculiar wave of ‘regeneration’ that washes across city centres,
    each ‘exciting new retail development’ leaving the previous ‘exciting new
    retail development’ tatty, emptying and forlorn.

     

    I’m afraid I got a bit impatient with
    the fantasy visions – I can seldom summon up the energy to read many paragraphs
    written in the future conditional. And I’m sure a sociologist would have something
    to say about the ‘reification’ of ‘the local community’. I know I’m horribly
    cynical, but should anyone who hasn’t served on the committee of a community
    association, and endured all that that means in practice, be allowed to
    pronounce on these matters?

     

    Phil Beardmore wrote a good
    blog on this recently (http://blogs.birminghammail.net/lighterfootprints/2012/05/a-neighbourhood-gateway-approa-1.html).
    Locally based ‘community organisations’ which are actually expert NGOs are not
    necessarily what is implied in the slightly dewy-eyed UKGBC rhetoric, but these
    kind of bodies do have a great deal to offer – substitute these in to the line:
    “It is possible that with
    the Green Deal, Community Collaborators could provide support for communities
    to come together and procure retrofit (which has a number of funding streams)
    much more cheaply and, in time, potentially other forms of infrastructure using
    a similar business model?” and I think they’ve probably described one of the
    best chances for success in the Green Deal.

  • Paul King

    Thanks for the candour as ever Mel. It’s been a fascinating process to go through over the last 6 months or so, and the project certainly evolved as the industry participants voted with their feet and followed their instincts. The report is very upfront (p1) about the fact that it does not pretend to be a business plan for the whole sector, but I think what it does do is provide some fascinating and powerful insights into the way we need to challenge our current assumptions to meet the changing needs of people – customers – in the future.

    E.F. Schumacher famously wrote, “Perhaps we cannot raise the winds. But each of us can put up the sail, so that when the wind comes we can catch it.” I think we are starting to feel some of the ‘winds of change’. The funny thing about revolutionary ideas is that they may not appear so at first sight. The first digital camera looked like an interesting new take on an established product, not a revolution in the way that people communicate with images, which is what it precipitated. Kodak didn’t see that coming though it happened under their nose. Typically we see small-scale examples of change spring up, long before they take hold and transform the mainstream.

    As I tried to get across yesterday, I agree that the key insights and themes summarised in the report are probably more important that the 5 specific ideas that our project team prioritized to develop further. Having said that, a whole new model of home finance to replace ownership or renting, a radical rethink of how we could think beyond 4 walls and focus on the time we actually need to pay for in different work and living spaces, and a plan to empower communities to meet their local energy needs in a business-like way, to reference just 3, are all pretty attractive ideas in their own right I’d say.

    Please keep stimulating the debate. We’re keen to hear what people think, warts n’ all.

    Paul King