Business Strategy

Why the hell would you take advice from me?

Fair enough! But before you dismiss the idea outright, hear me out. 

Disclaimer

I cannot pretend to be an expert with decades of business acumen. I dont claim to know anything much about the legal, accounting, HR aspects of running a business. What I do know is Digital Transformation within the niche field of Computational BIM. To the extent that I understand economics, the way things are often done in AEC makes no logical sense. 

Introduction

Over the years I have seen how many different businesses operate, both working directly as an employee and observing from the outside as a consultant.  Unlike people who have stayed in one place for a long period and get accustomed to doing things a particular way, jumping around has enabled me to zoom out and a more wholistic perspective on how the AEC industry works. I have worked with companies at all tiers and scales, and seen which things are done well by the smartest people in our industry and which things are a total shitshow.

Broken financial models

AEC companies typcially make money by charging billable hours for an employees time. In theory, this should average out to about 3 times more than the employees salary, with the rest going to overheads and profits.  While this model may have worked ok in the 20th Century, if it still worked in the 21st then AEC companies would be highly profitable. But they aren't! Most only make about 1-3%, which is definitely not enough to build a buffer for the hard times. Sometimes companies even "buy work", by undercutting the competition on a bid then being unable to do the work for less than their costs. This is absurd! We believe Computational BIM holds the answer to this. 

The Utilisation Fallacy

The core systemic problem which holds back effective Digital Transformation in AEC is the devalueing of work which cannot be tied to a specific project and therefore considered billable. People are judged by "utilisation rates", rather than the actual output of their labour. AEC companies are trapped in a vicious cycle where Hard Work (like lunchbreaklessness and unpaid overtime) is rewarded while Smart Work (creating more efficient systems and processes) is unrewarded or even punished. This creates a chilling effect on innovation, because there is no incentive for people to be more efficient or upskill if it means they cannot bill for those hours! Meanwhile, the funding for technicians who specialise in R+D or strategic work is precarious, especially when the job markets favours generalists who are "ok" at a the non billable tasks rather than specialists with a deep enough knowledge to do them cost effectively.  

Computational Cultue

– How does a company build a culture where Computational Design can thrive? 

– Why do some companies manage to get this work while others fail?

– How do we charge a client for the value delivered rather than the time billed?

– How do we know what our processes are and how long they take?

– How do we upskill workers to use the best tools available?

Lets find out together...