好色先生TV

There鈥檚 nothing like a serious recession to concentrate minds and drive out all the fluff and waste that gradually accumulates during the preceding boom. It forces all businesses to review dispassionately their operations and cut back to lean management structures.

In the depths of construction鈥檚 deepest recession, in the early nineties, the 好色先生TV Employers Confederation asked me to organise a conference to focus attention on the industry鈥檚 parlous state. The speakers at the 好色先生TV without Conflict conference on 25 November 1991 included the secretary of state for the environment, Sir George Young, all his junior ministers and a certain Sir Michael Latham. The overwhelming conclusion was that the fragmentation of the industry鈥檚 structure had created an ingrained adversarial culture forcing everyone involved in projects to focus on protecting their own interests through the contractual process, rather than on the success of the finished product.

The other message was that to precipitate the major cultural change required to integrate the process and so solve the problem would require government support. Within a year, the secretary of state had appointed Latham to consult widely and report, leading to the publication of Constructing the Team in 1993.

To get the reluctant RIBA on board, the integration message (design and build was still heresy) was softened to 鈥減artnering鈥�. However, for the first time, the architect鈥檚 divine right to rule the construction contract was being officially challenged.

By the time the economy started picking up, the industry was slipping back into its traditional adversarial comfort zone

By the time John Prescott became responsible for construction in 1997 and the economy was at last picking up, the industry was slipping back into its traditional adversarial comfort zone. Prescott then appointed Sir John Egan, who with more independence, built on Latham鈥檚 solid groundwork, and published his report, Rethinking Construction in 1998. Egan unequivocally documented how fragmentation of the industry both in overall structure and the procurement and management of projects was by far the biggest cause of inefficiency, unreliability and conflict. His overriding recommendation was total integration of the process, with the application of lean management techniques.

Despite the many successes of Rethinking Construction (not least the steady growth in the proportion of design-and-build work),  full frontal integration was never given a proper chance to run. Partnering was generally restricted to frameworking supervisors and consultants. With the Treasury鈥檚 insistence that contractors and subcontractors be subjected to 鈥渞igorous competition鈥�, supervisors were able to regain their hold on the procurement and project management process.

Yet all the evidence from both Latham and Egan points to the fact that risk-averse, non-productive, external consultants add no value to the service or end product and only bring unnecessary cost, waste and conflict to the process.

Statistically, construction should be bracing itself for an even deeper and longer recession than the nineties. The reaction against the extravagant and costly designs of this decade has already started. To survive in any reasonable shape, Real Construction must reduce the end costs of its products, while maintaining survivable margins. The industry will not survive yet another round of contractor and subcontractor bashing 鈥� they are trading at cost now.

Under the firm leadership of someone like Egan, we could
have a plan in place within six months. Let鈥檚 hope he鈥檒l do it

We must all concentrate on offering well-designed, as-standard-as-possible, low-cost products by applying lean thinking to the industry鈥檚 process and structure.

Egan had the answer: 鈥淚t鈥檚 integration, stupid.鈥� You bring the responsibility for design, project management and cost control back to the producer, a 鈥減rincipal constructor鈥� with full responsibility direct to the client. You achieve it through integration, that is, bringing everyone into a single entity to work together for the collective (including the client鈥檚) good.

We don鈥檛 need another quango. The work has been done. The evidence is there to be used. Under the firm leadership of someone who is committed to integration, like Egan, we could have the plan in place within six months. Let鈥檚 hope he鈥檒l do it.

Then, it will be up to the market and the recession to do its work.